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What is Product Portfolio Management?

Christine Hudson
Christine Hudson

Product portfolio management is the act of gathering, organizing and analyzing the data of a company’s products and investments. Much like in a personal investment portfolio, product portfolio management gives a company an organized view of its product lines, individual products and all investments which relate to the product lifecycle. This data could be shared in its entirety or split between different departments and even given to shareholders and investors. Anyone who is interested can get a general overview of performance, or dig down to specific product metrics depending on why he or she is interested in the data.

Companies may use product portfolio management not only to keep an organized view of all of their products and lines, but also to see which products outperform within certain metrics. With more than one product tested in the same markets, companies can assess weak points and strengths. Companies can also weed out products which consistently under-perform to increase their profits.

Product portfolio management gives a company an organized view of its product lines.
Product portfolio management gives a company an organized view of its product lines.

Even companies which deal in only one product may use product portfolio management to track success and profits. When changes are made to the product or marketing strategies, they can be added into the product management system. This allows a business to learn what methods work best to improve overall profits.

Product portfolio management may also be used to track a company’s investments and product development. This is necessary for calculating profits and losses over a product's life and helping the company decide whether or not to continue investing in a certain product or to terminate it. Data may even be shown on the products and services a company offers on behalf of business partners.

Management can be done in several ways, but the two most commonly used methods are with software and third-party vendors. If a company wishes to keep its product portfolio management in-house, it will generally use a software which is designed specifically for the task. Third-party vendors are often used for portfolio management to save the company money on staffing. Either way, regular updating is required to keep the portfolio data accurate.

New project data can be integrated with product portfolios so they are instantly updated when new products are being developed. The company may need to update data on older products manually, but this is usually done as changes occur to avoid omissions and errors in the reports later on. Product portfolio management is an active process and is considered essential in almost any company with several products under its name.

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    • Product portfolio management gives a company an organized view of its product lines.
      By: Anna
      Product portfolio management gives a company an organized view of its product lines.