NEW PRODUCTS PORTFOLIO SELECTION: A TEACHING CASE

Abstract

Competitive forces, technological changes and more segmented demands and dynamics in the globalized markets have imposed revolutions to businesses environment so that the modern organizations face the new product development management nowadays as a essential competence in these markets. The organizations no longer invest in R&D (Research and Development) as an obligation or as a percentage of their revenue, but as a strategic element to gain or to keep at the market. It is with the new products portfolio selection and management that the organization has the opportunity to build or correct technological or market strategies. Portfolio management is a decision process that seeks to select a group of projects of new products that, within a certain scenery, would constitute the best choice for the organization, considering its business strategies or balance towards multiple criteria. This paper aims at giving a didactic presentation allowing to illustrate the aid that quantitative tools can give to the decision making in the selection of portfolio of new products when the organization presents multiple strategies such as technological and market ones. The case can be used as support to the learning in disciplines of New Products Development Management Strategy in Administration courses. Didactic applications of Cluster Analysis together with Linear Programming (using the Solver/MS-Excel routine) were implemented to obtain the portfolio of maximum profit but it also considers the balance strategy among the technological segments of the organization.  It was initially considered a group of 16 projects of new products, each one with its technological and market potentialities. The work presents the theoretical foundations as well as the necessary instructions to obtain the projects portfolio by using the SPSS and MS-Excel softwares.