A huge probelm that many companies' new product portfolios face is that they are ubalanced, they feature a wrong mx of projects. Probles bcause of poor protfolio balance are:
- Too many small projets leads to the "death" of major breakthroughs, necessary for the the growth of the company
- Disproportionate amount of the resources in the various markets and business arenas
In the evaluative dimension of balance,
managers evaluate projects based on the extent to which they ensure that the
mix of NPD projects is proportional
across multiple concerns such as project completion date, technical
risk, return on investment and project innovativeness (i.e incremental vs.
radical). Ensuring that the new projects to be implemented align with available
resources also is a factor in balance. Balance, too, is a critical NPPM
dimension as it is the second most strongly
correlated practice with superior NPD performance (Cooper et.al, 2004).
The concept of finance is applied in PPM:
"Consider an investment fund where the fund manager seeks balance in terms of high risk versus blue chip stocks, domestic versus foreign investments and across industries in order to arrive at an optimally diversified investment portfolio." (Cooper et al pg 74)
"Consider an investment fund where the fund manager seeks balance in terms of high risk versus blue chip stocks, domestic versus foreign investments and across industries in order to arrive at an optimally diversified investment portfolio." (Cooper et al pg 74)
