This post explores two ways to help with your product prioritization. A couple of weeks ago I posted about the usefulness of a generic strategy. This works well when thinking about the broader positioning of your organisation. However, a business developer can be responsible for a number of products, service lines or industries, and it can be difficult to determine which to prioritize.
Product Prioritization With The GE/McKinsey Matrix
A quick assessment is made using the GE/McKinsey Matrix . This method plots the company offerings or industries on two simple axes:
- Industry or market attractiveness – commercial potential of the market or industry, i.e. potential to make money.
- Business unit strength – ability and skill level of current staff to develop that industry or market with the offering being assessed.
Product Prioritization Strategies
The original form of this analysis is conducted with a high level of detail. However, for ease of use I simply divide each axis into high, medium, or low. Each offering will plot within a general strategy. These strategies are described as:
- Grow – strong business development effort and investment. Aggressively Hunt for opportunities.
- Hold – medium business development effort and investment. Farming opportunities from existing customers
- Harvest – limited business development effort. Act on opportunities as they arise. Do not pursue.
Combining the GE/McKinsey Matrix with the Porters Generic Strategy provides a fast assessment of where the product offering sits and its broad commercial strategy. Therefore, doing this for each of your products or service lines gives a clear direction for your business development effort.
Using the Product Life Cycle
Another tool that aids with prioritizing products within a portfolio is the Product Life Cycle. Plot the product and service offerings on the graph below. Annual sale volume and time product has been in circulation form the two axes. Each stage of the Cycle has its own broad strategy.
- Introduction – New product. Hunt for new customers and establish brand trust.
- Growth – Established product. Pursue new customers and ensure quality service to retain existing customers.
- Maturity – Well established product. Farm existing customers. Accordingly, customer retention is a priority.
- Decline – Product replaced with different offering. Business development effort is low. In addition, customer retention effort is low.
Understanding where the offering fits on this curve will assist in defining priorities for the business development effort across a portfolio of products or services.
Call to Action
If you look after a portfolio of products or industries print out a copy of the two tools. Plot your portfolio. Does it help you determine where to focus your effort? I’m keen to hear how you go. Put your findings in the comments below or get in touch through the usual channels.