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131030 Ims6 Essay

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SL27 Major steps in portfolio management
rate projects:
LT = revo
ST = incr  how much staff allocated to this? If 80%  revo will come Functional food (eg.) Actimel = much more expensive than regular food (eg. milk) = added value through innov SL28 Issues: demands typically exceed resources…

Workload of an R&D department
Too many projects running: over capacity
If nothing else adds to this, they are busy for 2,5 years
Is this realistic?
No, there will me new things coming up as competitors come up with new stuff, consumers ask for something … Overload of capacity = bad idea
+ if too busy, you do quite a lot ST but the LT project will have to wait eg. Google: 1-day-rule: 1 day a week employees can od as they like = create slack(excess capacity) which gives you freedom to explore other things does it work?

SL29 Funnels: an example
too many opportunitie
choose on basis of 3 criteria
ROI and NPV should always be on the table: it has to make money But mere financial criteria is not sufficient:
What can be the additional value for current customers? = strengthening your competitive advantage To what extent are we technically capable of moving in that direction? How risky is it? Eg. for functional foods you need a doctor: what is the impact on the digestion of people? New direction can require new knowledge, competencies…

R in the NPV formula is driven by risk
The more new skills etc you need, the more technically risky the project Everything else you can customize as you wish as a company
SL??? The Risk vs. Return matrix
Project mgr eliminates all projects in bottom left: do not make sense from an economical perspective...

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