A Winning Strategy For Your Product Portfolio

When’s the last time your company looked at its product and brand portfolio holistically to increase margins? If the answer is “What?”, then it could be time for a significant reset. Beckway’s Product Portfolio Optimization process offers deep insights and immediate, impactful actions that counteract the slow erosion of EBITDA that often results from the best day-to-day efforts of individuals in sales, product management, pricing, marketing, and other areas.

Effective portfolio optimization is critical in maximizing margins and value. It targets a well-defined series of value-creation levers that routinely improve overall profit margin by 5-10 percentage points:

o?? Increasing revenues by targeting more profitable customers for both existing and new business

o?? Increasing margin realization by increasing prices where appropriate and cutting unprofitable products

o?? Decreasing product management cost by reducing complexity

o?? Decreasing procurement cost by simplifying product set

o?? Decreasing marketing spend by reducing offerings

While the goals of portfolio optimization are clearly desirable, most companies get bogged down in the complexity of execution. Our straightforward ‘critical path’ approach involves both the commercial and operational sides of the company to maximize impact and create an ongoing improvement process.

The key steps of our approach to keep in mind when optimizing your product portfolio are:

1. Execute Beckway’s Profit Matrix process to align the organization on ‘true cost’ to include discounts, customer support, product, logistics, distribution and selling costs: product and customer profitability at SKU and account levels
2. Identify SKUs and product families for rationalization or pricing improvement
3. Get customer input, then align organization on priorities and execution plan
4. Pilot and launch product optimization
5. Flow through product effects with Product Management, Procurement, and Marketing efficiencies
6. Initiative comprehensive tracking and continuous improvement program

Learn how Beckway can help support your business and realize significant margin improvements sooner. For more information, contact Beckway Partner, Jon Mollenhauer, at [email protected].