“Ensuring that high-risk projects receive their fair share of the resources requires a different approach to portfolio management and different analytical tools” (Cooper 2013)
Bubble diagrams is a very popular technique used for balancing portfolio. A typical diagram shows
development prohects on a two dimensional X-Y plot. Each bubble represents a project and the size of he bubbles the resurces that this specific project absorbs. There comapnies that chaneg the color as well. The concept of evaluating the projects is the same with the BCG strategy mmodel or the GE and McKinsey one. These models used "market attractiveness versus business position" dimensions.
An example:
However, these dimensions are not appropriate for new product development. Some parameters that are frequently used are:
- alignment with business strategy (low, medium, high)
- inventive merit
- strategic importacne to the business
- durability of the competetive advantage
- reward based on financial expecations
- competitive impact of technologies
- probabilities of success
- R&D costs to completion
- time to completion
- capital and marketing investment required to exploit (Cooper et al. 2001)
Other useful descriptors that could be used in bubble diagrams are:
- market or market segments
- product categories or product lines
- project types
- technology or platform types
- market or market segments
- product categories or product lines
- project types
- technology or platform types
The most popular bubble diagrams are variants of the risk return diagram as we can see above. The two dimensions that are used are:
- project's reward for the company
- probability of success
The four quadrants are:
Bubble diagrams and other visual charts are helping senior management to get an idea of the project development fast and thus are used a lot at gate or review mmeetings.
