Portfolio Management for New Products [Hardcover]

I was disappointed to find very few judgements. I don't just want to know what people do, I want to know whether what they do is any good. The authors shy away from such judgements.

There is too little theory in the book. A lot is known about the principles of portfolio management (both from operational research and from practical experience in financial markets). Does this work well for R&D portfolios? Is any of this relevant for new product development? The authors neglect to tell us.

Reading their case studies it often seemed to me that it should be easier to do better than that, but we don't see many of those suggestions.

There is a gap to be filled between the theory and the practice of portfolio management. This book is good on practice, but fails to achieve the necessary synthesis with theory.

Things actually get worse. What you will find in this book are random generated case studies on various portfolio models the authors encountered in the few firms willing to meet them - no theoretical framework is given on portfolio management, criteria to be included and best practices in various industries.

As a major disappointment I found the fact that not a single case/best practise study came from the pharmaceutical industry and the software industry, those industries where portfolio management/selection are at the very heart of the strategic management process. It would have been a huge (and logical) opportunity to cover in this book how Merck or Pfizer steer their new product development processes. But don`t look for clues to this questions in this book. The case studies you will find in this book are about a small Canadian bank, a small US chemical company, and about Hoechst US. The last case study offered at least some ideas useful for improving the portfolio management process (that is the main reason for the second star).

Somewhat disturbing are platidudes widely used throughout the book (e.g. " ....Remember: understanding the problem is the first step to a solution! .... (p. 184)). If esclamation marks after platitudes make you nervous, then you will probably throw this book away before reaching page 100.

The only bright side of this book are the first 20 pages, where the authors discribe present shortfalls of the portfolio management process currently used in some firms (i.e. in the firms they interview, and these firms are underperformers). It helps to get an idea of what effective portfolio management should do - and these points are very agreeable indeed (e.g. value creation, balance, strategic fit). That these questions are inadequeately and only empirically adressed in this book, is a source of frustration for its readers. I would give only a very very weak recommendation for this book.

(Who is this stupid Austrian consultant?!!!!!)

If you are already conducting portfolio reviews, this is a good book as a reference to see how to improve the process. If you are not using portfolio reviews in your company, here is a good reference to learn how to do it.

There is no earth-shattering new information in this book. I would have liked to have seen information on portfolio management based on the type of product such as high tech, consumer, etc. If you're just learning about portfolio management this is a good starting place, if you are already knowledgeable about the area, search out other books.