Why is having a diverse product portfolio essential for product development?

1 What is a product portfolio?

A product portfolio is a collection of products that a company offers to its target market. It can include different types of products, such as core products, complementary products, extensions, variations, or innovations. A product portfolio can also be organized by categories, segments, stages, or themes. A product portfolio reflects the strategic vision, goals, and capabilities of a company, as well as the needs, preferences, and behaviors of its customers.

2 Why is diversity important?

Having a diverse product portfolio is important for several reasons. First, it helps you reach a wider and more diverse customer base, by offering products that appeal to different segments, niches, or personas. Second, it helps you reduce the risk of depending on a single product or market, by diversifying your sources of revenue, growth, and feedback. Third, it helps you foster innovation and creativity, by exploring new opportunities, ideas, or solutions. Fourth, it helps you adapt to changing customer needs, market trends, or competitive threats, by being flexible and responsive.

5 What are the challenges of diversity?

Having a diverse product portfolio can bring a range of challenges to your product development process and outcomes. These can include increased complexity and uncertainty in managing, coordinating, and prioritizing your product portfolio, as well as decreased focus and efficiency due to the different resources, skills, and processes required. Moreover, you may face higher costs and risks with different investments, experiments, or launches. Trade-offs, conflicts, redundancies, losses, negative feedback, and damage to reputation and credibility are all potential risks associated with a diverse product portfolio.

6 How to overcome the challenges?

To effectively manage a diverse product portfolio, you need to balance diversity with focus, efficiency, and quality. Align your product portfolio with your vision and strategy, making sure that it is consistent with your purpose, value proposition, and differentiation. Segment and categorize your product portfolio using criteria such as customer segments, product types, product stages, or product themes. Utilize tools such as product portfolio matrices, roadmaps, or charts to visualize and communicate your product portfolio. Evaluate and optimize your product portfolio using data, research, and feedback. Use methods such as portfolio reviews, audits or analyses to assess and improve your product portfolio. Prioritize and allocate your product portfolio by considering value, feasibility, and desirability. Utilize frameworks such as the Kano model, the RICE score, or the MoSCoW method to prioritize and allocate resources such as time, money, or people.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?