How do I know that my portfolio is due for a review?
It is the end of February, on an occasional day like today the sun shines like it is early spring. You look through the windows and see finger traces, dust flying around the living room, the top shelves of your book shelf seem to have a light white layer on them. It's clearly time for spring cleaning.
Just as your apartment, your business portfolio also needs a careful look once in a while. Most of us know that we need to review all of our brands, products or services on a regular basis, however often due to the daily grind these activities are left for „next month“ or for the yearly planning process.
In the same way as the signs that your apartment is giving you signs it is due for a thorough clean, your business portfolio will give you those same signs. Below is a list of watch-outs that you need to keep your finger on and recognise them soon enough in order to create a positive impact on your business as fast as possible. Some of the items below aren't only due to a brand portfolio issue, however a brand portfolio review is a very good diagnostic exercise to do.
Consumer / customer appreciation of our brands, products or services is stagnating or declining
The brand or product to market fit might not be as tight as it used to be
New trends and players in the market are taking away substantial volume and share
Stagnating or decreasing market share
In spite of increased investment there are no significant moves in the market in terms of share development
Increasing cost of business per unit sold
The activities to grow or maintain your commercially oriented operations are increasing without adding extra value
Gaps in our portfolio vs the market, overcrowded segments or unattainable geographies
There are clear areas that you aren't addressing with your portfolio (this may be a strategic choice, but also you need be sure you are able to generate sufficient revenue mass from the segments you are playing)
There seem to be too many brands in our portfolio playing in the same segment of the market – likely you could be creating more impact with just one player and glean higher profit margins as there is no need to multiply cost
There are geographical areas of the market where you aren't able to enter
Slow rotation / returns from the market
Following a tail analysis products that are slow movers and are taking space, resources and personnel attention for very little result in the market (a sentence commonly used in the beverages industry is: „Fridges aren't made of rubber!“)
Costs of returns from the market or write-offs are a significant part of the total product cost
If you encounter any of the above it might be time to take out that portfolio duster, have a good review and clean out, regroup your resources and invest where it matters.