Title: Participatory development of a strategic product portfolio in a telecommunication company

Authors: Mats Lindstedt, Juuso Liesio, Ahti Salo

Addresses: SitCom Ltd., Raseborgsvagen 9, FIN-10600 Ekenas, Finland. ' Helsinki University of Technology, Systems Analysis Laboratory, P.O. Box 1100, FIN-02015 TKK, Finland. ' Helsinki University of Technology, Systems Analysis Laboratory, P.O. Box 1100, FIN-02015 TKK, Finland

Abstract: The development of a product portfolio is a strategic decision which is often complicated by the large number of competing products, product interactions and high uncertainties about how successful the products will be in the marketplace. These decisions are commonly supported either by financially oriented approaches (e.g., net present value) or more qualitative approaches (e.g., scoring models) which, however, tend to suffer from shortcomings in capturing uncertainties and portfolio effects. Motivated by these, we report a real-life case study where a recently developed preference programming method – called Robust Portfolio Modelling (RPM) – was used to support the management group of a telecommunication company in the development of a strategic product portfolio in view of a 2–3 years time horizon. The positive experiences from this case study suggest that RPM may be useful even in other related settings where the presence of multiple objectives, uncertainties about product outcomes and possible variations in budgetary constraints must be accounted for.

Keywords: decision analysis; multi-criteria decision making; MCDM; portfolio management; portfolio optimisation; preference programming; telecommunications industry; strategic product portfolio; uncertainty; budgetary constraints.

DOI: 10.1504/IJTM.2008.018106

International Journal of Technology Management, 2008 Vol.42 No.3, pp.250 - 266

Available online: 01 May 2008 *

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