PPM (Product Portfolio Management) BCG Matrix


N's spirit Basic MBA > PPM (Product Portfolio Management)

PPM (Product Portfolio Management)

PPM is abbreviation of Products Portfolio Management, which is a framework to consider business portfolio proposed by BCG.

PPM has the matrix having four areas divided by market growth rate and market share as follows.




PPM is proposed based on scale economics so it is difficult to use in industries which scale economics cannot be applied to. In addition, in PPM, vertical line is considered based on PLC, Product Life Cycle, and horizontal line is considered based on experience curve.


Stars

The company can expect to earn big profit from Stars but cannot expect to earn cash flow because Stars needs huge investment cost to catch up market growth. The company will have to maintain the market share of Stars, continue to invest in it and finally have it move Cash Cows. If a business is Question Marks, the company will have to consider having it move Star first.


Cash Cows

The company can expect to earn huge cash flow from Cash Cows but it should save investment cost for Cash Cows because it cannot expect to expand Cash Cows business. While the company has Cash Cows, it needs to move another business to Star by investment.


Question Marks

The company should make a decision on moving Question Marks to Stars by investment or exiting it to avoid moving it to Dogs.


Dogs

The company needs to shut down or sell Dogs. However, it sometimes cannot do because of;

- Past huge investment
- Opposition of customers, suppliers, dealers and employees including labor union
- Huge quitting cost
- Keeping reputation and pride of management


An example of PPM

The following graph is an example of PPM. The size of circle shows revenue of each business.

PPM (Product Portfolio Management) BCG Matrix


The following two graphs shows how first business and late business move on PPM.

PPM (Product Portfolio Management) BCG Matrix

PPM (Product Portfolio Management) BCG Matrix


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Strategy
What is the corporate strategy?
Ansoff Matrix
PPM (Product Portfolio Management)
GE's Business Screen
Value Portfolio
Pattern of Global Strategies
Porterfs Corporate Strategy
Strategy by Positioning in an Industry
Blue Ocean Strategy
Five Forces Analysis
Advantage Matrix
Strategic Positioning Analysis
Value Chain
Deconstruction
Service Profit Chain
Resource Based View
Seven S
VSPRO Model
PEST Analysis
PLC (Product Life Cycle)
Technology Life Cycle
MOT (Management of Technology)
Economic Analysis of Business
Experience Effect
3C Analysis
SWOT Analysis
PDCA Cycle
Seven Domains
Delta Model
Process of Environmental Analysis
PMS (Product Market Strategy)
Framework of Competitor Analysis
Examples of KSF


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N's spirit Basic MBA > PPM (Product Portfolio Management)

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