Growth Management for Technology Companies High Tech Management Program Module 5

DESCRIBING THE CURRENT CORPORATE PORTFOLIO OF PRODUCTS, MARKETS, OPERATIONS AND PROCESSES

LISTING PRODUCTS, SERVICES MARKETS AND OPERATIONS Product/Service A –Markets: Market A.1 Export through agent –Segment A.1.1 Export through distributors –Segment A.1.2 Market A.2 Manufacturing through outsourcer, selling through own selling personnel Market A.3 Licensing Product/Service B –Markets Market B.1 Basic Research, selling through agent –Segment B.1.1 –Segment B.1.2 Market B.2 –Segment B.2.1

LISTING PRODUCTS, SERVICES MARKETS AND OPERATIONS Product/Service A Product/Service B Product/Service C Product/Service D

Strategic Importance/Profitability Product Portfolio Map Profitability Positive Negative Strategic Importance HighLow

CREATE YOUR OWN PRODUCT PORTFOLIO MAPS

LIFE CYCLE MAPPING in Products with Chasm

LIFE CYCLE MAPPING in Products without Chasm

THE PROCESS OF EXCELLENCE Which are the core competences: the internal activities that your company performs with excellence and are critical for the company’s strategy and profitability? –Indicate the key PROCESSES behind the core competences (often the core competence is the process itself) –Use the value chain in next slide for guidance if needed

THE PROCESS OF EXCELLENCE (Guidance Value Chain) SUPPORTACTIVITIESSUPPORTACTIVITIES Infrastructure Human Capital Development Technology Competence Relationships/ Alliances PRIM. ACT Inbound Logistics Production Operations Outbound Logistics Marketing / Sales Service R&D/ Product Developm.

Core Competences –A) Processes: – – B) Processes – – C) Processes – THE PROCESS OF EXCELLENCE

BUSINESS UNIT X / COMPANY X GROWTH INTENSITY CHART Select one specific product, or use this tool for the company as a whole List on the vertical axis the main markets or segments RELEVANT for this product List on the horizontal axis the growth alternatives for your selected product, or use the ones provided Insert one circle (per product) in the right box of the grid with one colour, indicating the current state of growth of your product Indicate with a different color the desired state of growth for that product, linking with an arrow the expected movement Select in a strategy meeting the priority growth objectives for these products

BUSINESS UNIT X GROWTH INTENSITY CHART: CURRENT SITUATION __________ Non-existentLow GrowthMedium GrowthHigh GrowthBooming Growth Growth Intensity __________ List Products or Services

__________ Non-existentLow GrowthMedium GrowthHigh GrowthBooming Growth Growth Intensity __________ List Products/ Services BUSINESS UNIT X GROWTH INTENSITY CHART: CURRENT SITUATION

CREATING GROWTH THROUGH A PORTFOLIO OF PROJECTS

CURRENT PROJECT FUNCTION GRID __________ Basic Research __________ LIST BUSINESS UNITS Process Improvement Product Improv./Upgrade /Extensions New Process Creation New Product Development Maintenance/ Repairs/Fixes New/Existing Market Development

PROJECT FUNCTION GRID __________ Basic Research __________ LIST BUSINESS UNITS Process Improvement Product Improv./Upgrade /Extensions New Process Creation New Product Development Maintenance/ Repairs/Fixes New/Existing Market Development

Project Assessment Dimensions when creating the maps Rank Type of Chart Horizontal Axis Vertical Axis Risk vs. RewardReward: NPV, IRR, market value ByProbability of success (technical, commercial) Cost Vs. TimingTime to ImpactByCost to Implement Ease Vs. Attractiveness Technical feasibility By Market attractiveness (growth, potential, consumer appeal, general, attractiveness, life cycle) Strength Vs. Attractiveness Competitive strengthMarket Attractiveness NewnessTechnical newnessMarket Newness Strategic Vs. Benefit Strategic focus or fitBusiness intent, NPV, financial fit, attractiveness By

CREATE YOUR OWN PROJECT PORTFOLIO ASSESSMENT MAPS

Basic Research Project Ranking PROJECT Probability of Technical Success Probability of High Growth Platform Technical gap with competition Compatible with existing skill base Time to completion Availability of technical resources and skills Technical simplicity Financial resources required

New Process Creation Project Ranking PROJECT Financial Impact in the company Magnitude Duration of competitive advantage Synergy with other operations Compatible with existing skill base Time to completion Availability of technical resources and skills Process simplicity Financial resources required

New Product Development Project Ranking (I) PROJECT Strategic Impact in the company Possibility of proprietary position Platform for growth Durability of competitive advantage Technolog. simplicity Availability of technical resources and skills Synergy with other products Market need

New Product Development Project Ranking (II) PROJECT Ease of Competition in that market Predictability of commercial success Compliance with legal / social regulations Time to completion Financial Resources Required Financial Impact in the company

Market Development Project Ranking PROJECT Impact in the company Market SizeMarket growth potential High Margin potential Market simplicity Time to completion Synergy with other marketing operations Financial resources required

Maintenance Project Ranking PROJECT Importance of the serviced activity Probability of success Operational life of the asset serviced Time to completion Availability of technical resources and skills Technical simplicity Financial resources required

Product Improvement/Upgrade/Extension Project Ranking (I) PROJECT Strategic Impact in the company Possibility of proprietary position Platform for growth of additional extensions Durability of competitive advantage Technolog. simplicity Availability of technical resources and skills Synergy with other extensions Market need

PROJECT Ease of Competition in that market Predictability of commercial success Compliance with legal / social regulations Time to completion Financial Resources Required Product Improvement/Upgrade/Extension Project Ranking (I) Financial Impact on the company

Process Improvement Project Ranking PROJECT Financial Impact in the company Magnitude Duration of competitive advantage Synergy with other processes Compatible with existing skill base Time to completion Availability of technical resources and skills Improv. simplicity Financial resources required

TOTAL PROJECTS, RANKING SELECTION, CORE VS CONTEXT TEST __________ Basic Research __________ LIST BUSINESS UNITS Process Improvement Product Improv./Upgrade /Extensions New Process Creation New Product Development Maintenance/ Repairs/Fixes New/Existing Market Development

FINAL PROJECT SELECTION __________ Basic Research __________ LIST BUSINESS UNITS Process Improvement Product Improv./Upgrade /Extensions New Process Creation New Product Development Maintenance/ Repairs/Fixes New/Existing Market Development

INTERNAL PROCESS RESULTS EXPECTED Basic Research Results New Product Creation Product Improvements Benchmarking Product Portfolio Diversification Process Excellence New Process Creation Quality achievements

BUSINESS UNIT X GROWTH INTENSITY CHART: CURRENT SITUATION __________ Non-existentLow GrowthMedium GrowthHigh GrowthBooming Growth Growth Intensity __________ List Products or Services

BUSINESS UNIT / COMPANY X CURRENT VS FUTURE SITUATION __________ Non-existentLow GrowthMedium GrowthHigh GrowthBooming Growth Growth Intensity Current __________ List Products/ Services Desired

__________ Non-existentLow GrowthMedium GrowthHigh GrowthBooming Growth Growth Intensity __________ List Products/ Services BUSINESS UNIT X GROWTH INTENSITY CHART: CURRENT VS FUTURE SITUATION

MARKETING RESULTS EXPECTED Market Development Rates –Market Share increase in existing markets –New Market Development Rate –Repeating Customers Purchasing Rate Customer Satisfaction Rates Customer Base Diversification Customer Awareness Rates Brand related rates Customer Image Rates Other relevant marketing rates

FINANCIAL RESULTS EXPECTED Sales Growth Rates Profitability Increase Rates –Pricing Increases –Cost Reductions –Margin Increases –Benchmark with competition Return on Investment Rates Debt reduction rates Stock market price rates Other relevant financial rates

LOW REQUIREMENT BASIC REQUIREMENT KEY REQUIREMENT LOW CURRENT MODERATE CURRENT HIGH CURRENT SKILL LEVEL SKILL LEVEL SKILL LEVEL LEARNING AND GROWTH PERSPECTIVE: NEW SKILLS REQUIRED FOR PROJECT PORTFOLIO

LOW REQUIREMENT BASIC REQUIREMENT KEY REQUIREMENT LOW CURRENT MODERATE CURRENT HIGH CURRENT SKILL LEVEL SKILL LEVEL SKILL LEVEL LEARNING AND GROWTH PERSPECTIVE: NEW SKILLS REQUIRED FOR PROJECT PORTFOLIO

Leading Lagging Soft Hard Vision & Strategy Vision & Strategy CUSTOMER “To achieve our vision, how should we appear to our customers?” Objectives Measures Targets FINANCIAL “To succeed financially, how should we appear to our shareholders?” Objectives Measures Targets INTERNAL BUSINESS PROCESSES INTERNAL BUSINESS PROCESSES “To satisfy our shareholders and customers, what business processes must we excel at?” Objectives Measures Targets Initiatives INNOVATION AND LEARNING “To achieve our vision, how will we sustain our ability to change and improve?” Objectives Measures Targets Initiatives Creating a Growth Scorecard