Businesses with many products or services need an effective product portfolio management strategy. <\/p>\n\n\n\n
Where do you begin in assessing each individual product? And what makes up strategic portfolio management? <\/p>\n\n\n\n
Stick with us. We\u2019ll look at what this is and practical frameworks. Plus, we’ll share tips to guarantee strategic alignment with your business goals.<\/p>\n\n\n\n\n\n
Understanding product portfolio management <\/h2>\n\n\n\n
Product portfolios encompass all products and\/or services you offer. These could be for sale or via a subscription model such as SaaS<\/a>. <\/p>\n\n\n\n Product portfolio management (PPM) oversees that portfolio across all the markets you service. It brings together your sales and marketing teams. But it also connects other relevant departments such as the product team. <\/p>\n\n\n\n Collaboration is key here, particularly if you want to achieve short and long-term business goals. <\/p>\n\n\n\n Two factors guide product portfolio management:<\/p>\n\n\n\n One of the main aims is to allow teams to focus on their target market. They then meet market and customer needs quicker (speeding ahead of direct competitors). <\/p>\n\n\n\n It also allows them to offer more value than a business focusing on individual products.<\/p>\n\n\n\n You\u2019re not looking at individual parts. Instead, you\u2019re looking at how the entire portfolio performs. Then you can start digging into how it affects customer satisfaction.<\/p>\n\n\n\n So how does this work in practice? <\/p>\n\n\n\n Let\u2019s say your business sells inbound call center solutions<\/a>. <\/p>\n\n\n\n Your main market is the call center sector. But you also sell to other verticals, such as finance, healthcare, and government. <\/p>\n\n\n\n Your product mix covers different features. These might include an IVR system, call barging, and voicemail-to-email transcription. Your portfolio includes all these different solutions.<\/p>\n\n\n\n Enterprises make up the majority of your target market. And they buy through your website or straight from your sales team.<\/p>\n\n\n\n But you want to start learning how to sell on Amazon without inventory<\/a>. You explore methods such as Fulfillment By Amazon (FBA) to extend reach without the overhead of stock. This could be useful for selling basic products to individuals rather than businesses.<\/p>\n\n\n\n You might also start exploring new distribution models for physical products. That could include a dropshipping<\/a> approach that minimizes inventory and logistics risks.<\/p>\n\n\n\n Teams then meet to plan your business strategy for the coming financial year. Your product portfolio management plan might look something like this:<\/p>\n\n\n\n Implementing PPM benefits product portfolio managers in several ways:<\/p>\n\n\n\n Every management strategy offers different benefits. It doesn\u2019t matter whether it\u2019s product management or enterprise architecture management<\/a>. You have to understand what framework is best for your situation. <\/p>\n\n\n\n Here are three of the main frameworks for product portfolio management. Consider which best suits your business needs and goals. <\/p>\n\n\n\n The Ansoff matrix looks at the options and risks in making business decisions. It\u2019s most commonly used for product and market expansion.<\/p>\n\n\n\n Any type or size of business can use this model. It doesn’t matter if you\u2019re making your first sale or becoming something of a market behemoth. For product managers, the Ansoff Matrix is a useful tool for evaluating how to grow a product and which strategies align with business goals. <\/p>\n\n\n\n It helps determine whether to improve an existing product<\/a>, expand to a new market, or take on a more ambitious pivot. By mapping out potential risks and rewards, product managers can make informed decisions on where to focus development efforts\u2014whether that means deepening market penetration, launching a new feature, or entering an entirely different industry. This model provides a structured way to assess growth opportunities and prioritize product<\/a> initiatives effectively.<\/p>\n\n\n\n The Ansoff matrix consists of two axes. The vertical one refers to existing versus new markets. The horizontal one refers to existing versus new products.<\/p>\n\n\n\n This matrix creates four boxes that relate to differing strategies:<\/p>\n\n\n\n So, what does this look like in practice? Let\u2019s take the example of a secondhand marketplace app.<\/p>\n\n\n\n The company has analyzed customer feedback<\/a>. They\u2019ve analyzed market trends. They know they have a strong presence and reputation in the market. But customers and trends show a desire for more secondhand pet supplies.<\/p>\n\n\n\n As a result, they create a product development strategy<\/a>. This matrix is best suited for existing markets and new products. Then, the team starts developing a pet marketplace app to add to their portfolio.and new products. Then, the team starts developing a pet marketplace app to add to their portfolio. <\/p>\n\n\n\n This framework is more complex. It\u2019s best suited to businesses with many product offerings. Large corporations prioritizing growth will also find it valuable.<\/p>\n\n\n\n If you need help figuring out what and where to prioritize, this matrix is for you. Use it to analyze your products so you know which ones are worth investing in. This is an important part of PPM that will help you grow.<\/p>\n\n\n\n The first dimension (or axis) focuses on market or industry attractiveness. In other words, how profitable a particular market or industry is. <\/p>\n\n\n\n This appraises whether your business can enter and\/or compete in that sector. It also considers what market opportunities there are.<\/p>\n\n\n\n There are four main factors that decide attractiveness: <\/p>\n\n\n\n The second dimension focuses on the company’s competitive strength. This looks at any advantages your business has and how it is performing. That includes market share and product differentiation.<\/p>\n\n\n\n Your product manager<\/a> looks at all factors together. Then they plot where a product sits within the matrix. This allows them to check how well positioned your company or product is. <\/p>\n\n\n\n If a product is in the red zone, it\u2019s not worth investing in. It\u2019s not going to be profitable or could even fail. Investing in such a product is a big risk. <\/p>\n\n\n\n The yellow\/orange zone is more of a gray area. The choice is up to your decision makers. Selectivity units come with more risk. So they often require a more conservative approach.<\/p>\n\n\n\n Green is where the magic happens. These products show promise. They\u2019re performing well and are in an attractive market. That means they\u2019re primed for growth. You have the green light to start allocating resources and capital. Give them an even bigger boost!<\/p>\n\n\n\n Are you a large business with a diverse product portfolio? Then this framework may be ideal for your product manager. <\/p>\n\n\n\n Much like you carry out an application inventory<\/a>, this looks at your entire portfolio. It looks at your market share and market growth rate. <\/p>\n\n\n\n The idea is to test<\/a> your portfolio’s performance. This allows you to find areas where you should assign resources. It\u2019s particularly useful when it comes to long-term planning. Categorizing products in your portfolio gives you the power to create strategies for them.<\/p>\n\n\n\n To use a BCG matrix, you\u2019ll need access to performance data. That includes sales volume, ROI, growth, and share of the market. <\/p>\n\n\n\n If you use a Square or Magento POS system<\/a>, use this to locate product data. You can also find data in your ERP software.<\/p>\n\n\n\n Use these metrics to place your products into one of the four quadrants:<\/p>\n\n\n\n So, what tools will help make your PPM strategy more effective? Here are five worth considering:<\/p>\n\n\n\n Choose the tools that make sense for your portfolio and goals. Make sure they integrate with existing ones in your tech stack. <\/p>\n\n\n\n The size of your portfolio is almost irrelevant. You still need to follow a few best practices to get the best from your strategy. <\/p>\n\n\n\n Audit your existing products as part of your product portfolio strategy. <\/p>\n\n\n\n Analyze the performance of each one. Look at historical data to find trends such as seasonal fluctuations. This can help you make those hard decisions when it comes to dropping a product from your portfolio. <\/p>\n\n\n\n Sales figures are a great starting point. But look at the other factors involved in a product’s success<\/a>, too. That includes resource allocation, total costs, customer feedback<\/a>, and staff involvement.<\/p>\n\n\n\n Determine objectives, such as selling X units in a given period. It’s worth setting a sales figure you want to achieve. But don’t forget about profit margins and other factors. These also determine whether a product contributes to your portfolio.<\/p>\n\n\n\n As you work through and score products, don’t look at finances in silo. Yes, factors such as development cost versus predicted and actual returns are important. But you also need to think about a product aligning with your business\u2019s goals and values. <\/p>\n\n\n\n If a product is borderline and you decide to keep it, that’s fine. But revisit it by conducting another product analysis later. <\/p>\n\n\n\n You might choose to adjust the pricing<\/a> or market it another way. Shifting your product strategy could turn a pet into a star. But even stars need to align with the company vision.<\/p>\n\n\n\n When it comes to new products, you won’t have historical data at your fingertips. But chances are you’ve done some predictive forecasting. It’s worth doing this to gauge the likely success of a product as part of a go-to-market strategy. <\/p>\n\n\n\n If you haven’t already, run a strategic analysis. This checks product risk and whether they’ll cover development and production costs. Look at each new (or planned) product and find a balance between opportunity and risk. What demands will an individual product place on your resources?<\/p>\n\n\n\n With anything new, focus on higher-value products. That is, unless you flag them as high-risk. High-value products that sell well drive your revenue. <\/p>\n\n\n\n Once you introduce a new product, give it plenty of support. Test it over the first year to make sure the results meet your predicted expectations. <\/p>\n\n\n\n If your company sells more than a handful of products, you need a product portfolio strategy. Whether you\u2019re an omni-channel retailer or a SaaS provider is irrelevant. <\/p>\n\n\n\n Your strategy shapes everything: How you market your products. What new product lines you roll out. Where you put your resources.<\/p>\n\n\n\n It also ensures your products are in line with customer preferences and expectations<\/a>.<\/p>\n\n\n\n\n
Managing a product portfolio – an example<\/h3>\n\n\n\n
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Benefits of product portfolio management <\/h2>\n\n\n\n
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![\"try-autopilot](\"https:\/\/no-cache.hubspot.com\/cta\/default\/5705808\/interactive-165946149675.png\")
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1. Ansoff matrix<\/h3>\n\n\n\n
![\"ansoff](\"https:\/\/canny.io\/blog\/wp-content\/uploads\/2025\/01\/ansoff-matrix.png\")
That said, it’s best suited to businesses considering new products and growth opportunities. So if you\u2019re launching a product or entering a different market, use this model. It\u2019ll help you figure out the most appropriate growth strategy while gauging the risk level.<\/p>\n\n\n\n\n
2. GE\/McKinsey portfolio analysis matrix<\/h3>\n\n\n\n
![\"The](\"https:\/\/canny.io\/blog\/wp-content\/uploads\/2025\/01\/ge-mckinsey-matrix.png\")
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3. BCG growth-share matrix<\/h3>\n\n\n\n
![\"BCG](\"https:\/\/canny.io\/blog\/wp-content\/uploads\/2025\/01\/bcg-matrix.png\")
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5 product portfolio management tools <\/h2>\n\n\n\n
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![\"Palma\"](\"https:\/\/canny.io\/blog\/wp-content\/uploads\/2025\/02\/CleanShot-2025-02-04-at-18.00.48@2x.png\")
<\/figure>\n\n\n\n![\"Form](\"https:\/\/no-cache.hubspot.com\/cta\/default\/5705808\/interactive-127905612377.png\")
\n <\/picture>\n<\/div>\n\n\n\nProduct portfolio best practices<\/h2>\n\n\n\n
Existing products <\/h3>\n\n\n\n
New products <\/h3>\n\n\n\n
The takeaway <\/h2>\n\n\n\n