Product Portfolio Strategy Research Articles

A Financial Valuation and Strategic Forecast on Nike, Inc.

The objective of this article is to evaluate Nike Inc.'s overall performance in the past three years and make predictions about its future prospects. Initially, this paper will analyze the three most significant accounting policies outlined in Nike's annual report for 2023. This analysis will assist us in determining the company's effectiveness in managing its assets, utilizing them, generating profits, and identifying long-term development trends. Furthermore, this paper will conduct a comparative assessment of various financial ratios with competitors within the Nike industry to gauge the company's performance in the previous year. This evaluation will provide valuable insights into Nike's financial position, operational achievements, and market standing. Finally, based on the comprehensive evaluation of Nike's overall performance in 2023, it will offer forecasts regarding its market value and future performance over the next two years. As a globally renowned sports goods brand known for its remarkable success thus far, Nike has strategically implemented a product portfolio strategy that has propelled it forward in terms of market advancements. The conclusion drawn from this article aims to enhance other sports goods brands' understanding of effective marketing strategies employed by Nike while fostering growth across the entire industry.

The impact of product portfolio specialty and activeness on firm survival: evidence from the nascent drone industry

We examine the impact of product portfolio strategy on the likelihood of firm survival within the nascent unmanned aerial vehicles (UAV) or the drone industry. Using novel and representative global data on firms that operate within the domain of air platforms in the drone industry, our study captures a period of ferment in the industry as it went through significant change and began to acquire some level of stability. The results show that both portfolio specialty and activeness have a positive impact on firm survival. Specialist firms with narrow product usage or higher portfolio specialty are in an advantageous position compared to generalists with wide product usage or low portfolio specialty. They also have a higher likelihood of survival, overall. Similarly, a firm with a more active set of drones within its product portfolio also survives better. The results are consistent even after accounting for firm‐level controls and are robust to other model specifications. Our findings have important implications for firm strategy, positioning, and interaction with technology in nascent industries, especially relating to the development and deployment of new technologies and products.

Competitive Resilience and Innovation: Fonterra's Strategic Approach to Thriving in the Dynamic Chinese Dairy Market

In the Chinese market, Fonterra faces fierce competition with competitors such as Mengniu, especially with the increasing demand for functional, personalized, and healthy products. In response to the challenge of product line similarity, Fonterra should adopt a diversified product portfolio strategy and continue to launch new products, including special functional ingredients, personalized flavors, and innovative products that meet health needs. By reducing reliance on a single product, the company can reduce the impact of market volatility and increase its differentiation against competitors. This strategy will appeal to a wider consumer base, enhance customer loyalty, and effectively mitigate the threat of substitutes. By constantly monitoring market dynamics and competitors' actions, as well as making regular adjustments to its product portfolio, Fonterra will be more flexible in adapting to changes in the marketplace, enhancing its competitiveness and meeting evolving consumer needs, laying a solid foundation for the Company's sustainable growth.

Commercial and Technical Productization for Design Reuse in Engineer-to-Order Business

In the engineer-to-order (ETO) business, companies provide customer value by customizing the products according to the customers’ needs in a project-like manner. As a result, the number of individual product designs tends to proliferate, causing challenges in company operations, and product portfolio and product lifecycle management. In addition, if the company's product offering is not well productized, using the ETO model may further lead to poor understanding of the offering, deficient reuse of previous designs, and challenges in sales and making offers. A qualitative multiple case study was conducted to analyze the productization challenges of four ETO companies. On the basis of the challenges and the previous literature, a generic model for commercial and technical productization in ETO business was constructed and further tested in the companies. The model utilizes the logic of commercial and technical product structures. The product structure logic is linked to four different scales of product development processes to address different types of customer requests based on the complexity of the modification that the request necessitates. The model may support clarifying the product offerings of ETO companies to improve their design reuse, sales, and making offers. Further, the ETO order-related decision-making can be linked to product portfolio management targets and company strategy.

Financial Analysis and Forecast of Nike, Inc.

This article aims to analyze the overall performance of Nike Inc. over the past three years and make predictions about its future. Firstly, the paper will discuss the three most significant accounting policies in Nike's 2022 annual report. This will help determine the company's asset management and utilization, profitability, and long-term development trends. Furthermore, the article will evaluate the company's performance in the previous year by comparing various financial ratios with its competitors in the Nike industry. This assessment will enable an evaluation of the company's financial position, and operational achievements, and showcase Nike's position within the industry. Lastly, based on Nike's overall performance in 2022, the paper will provide forecasts for the next two years regarding Nike's market value and performance. As a leading brand in the world of sports goods, Nike has proven through practice to be one of the most successful companies to date. It has adopted a strategically significant product portfolio strategy, resulting in significant market advancements. The conclusion of this article will contribute to other sports goods brands learning from Nike's relevant marketing strategies, thereby driving the overall development of the industry.

A Decision Support System Based on the Integration of a Theory of Constraints and Strategic Management Tools for the Selection of Product Mixes

The selection of products to be offered on the market is a critical decision-making process encountered in all industry sectors. It is not just a matter of maximizing profit or optimizing the utilization of corporate resources but also specifically concerns determining a product portfolio that is most suitably aligned to corporate strengths and that appeals to the most attractive and emerging markets. Hence, corporate competencies such as strategic management and production capabilities must be taken into account concurrently. Starting from this point of view, a twofold decision support system (DSS) has been developed. On the one hand, a theory of constraints (TOC)-based analytic hierarchy process (AHP) approach, including a taboo search algorithm, has been developed in order to derive the right product mix for maximizing the total profit amount by considering the bottleneck problem. On the other hand, a GE/McKinsey screen matrix is added to this consolidated approach to support decision-makers in the formulation of product portfolio strategies. The DSS provides a platform to compare outputs coming from the preceding two processes, which allows for the refinement of the solution. The proposed DSS is executed with a problem dataset from the industry to test its accuracy and reliability.

Research on P2P product portfolio strategy based on term structure under risk reserve system

This paper studies the portfolio strategy of P2P products based on the term structure under the risk reserve system. It constructs a Lagrange revenue function for each type of product to indicate the relationship between the optimal loan interest rate and the Lagrange revenue, and further proposes the optimal portfolio strategy model based on the term structure under the risk reserve system. A simulation analysis is carried out and the results show that. (i) Under the risk reserve system, the revenue is increasing with the loan interest rate. (ii) The optimal term will change due to the adjustment of supervision, and then the optimal portfolio will be transformed. (iii) The optimal revenue is increasing with the amount of risk reserve, and excess risk reserves will lead to an increase in the penalty cost, which makes it less likely for the platform to obtain profits from the excess. (iv) If the loan interest rate remains fixed, the cost minimization model is equivalent to the revenue maximization model, and the revenue is the largest when the total cost is minimal. (v) When the loan interest rate reaches a certain threshold, the marginal default cost will be greater than the marginal benefit, which will reduce the revenue. (vi) The differentiation of default risk with different terms will result in the change of the optimal revenue, which will cause the alteration of the optimal portfolio.

Green Product Portfolio and Environmental Lobbying

Nowadays, a growing number of firms utilize corporate lobbying in favor of more environmental-friendly policies and regulations, deviating from the traditional lobbying mainly used to minimize regulatory burdens. In this study, we investigate what motivates firms to engage in such an unusual type of corporate lobbying—environmental lobbying. Focusing on the product portfolio strategy of the firms, we suggest that firms increasing their production of “green products” are more likely to engage in environmental lobbying. When environmental lobbying raises environmental hurdles in the market, firms with intensive focus on green products can easily bear adjustment costs with little effort, making other “less green” firms relatively disadvantaged under the newly regulated market conditions. Moreover, those firms can also address demand-side issues more easily by lobbying the government to provide greater incentives for purchasing green products or to request subsidies that can be used to improve their cost structure. Our analyses based on the U.S. light vehicle market indicate that, indeed, the more electric vehicles automakers produce in their product portfolios, the greater environmental lobbying they make. We also find that such a positive relationship between green product intensity and environmental lobbying becomes more salient when a firm has greater market share.

Impact of Portfolio Specialization and Activeness on Firm Survival: Evidence from Drone Industry

This study examines the impact of a product portfolio strategy on firm survival in the global unmanned aerial vehicles (UAV) or drone industry, which serves as an emerging innovation ecosystem. Utilizing a sample of firms from across the world in the UAV industry, we find that firms operating with a product portfolio that is specialized as well as active face a lower hazard of exit compared to firms that operate with a portfolio that is either less specialized or less active. Our findings have important implications for firm strategy, positioning, and interaction with new technologies within an emerging innovation ecosystem.

Reconsideration of new product development planning based on the relationship between product complexity and product lifetime: the case of the Korean mobile phone market

ABSTRACT This study aims to investigate the impact of product complexity on product lifetime. As product lifetime increases, firms have a longer time to develop new products and gain a higher return on investment. This study posits that product complexity has an effect on product lifetime and then investigates a product portfolio strategy for product complexity by using Korean mobile phone data released from 2004 to 2013. The impact of product complexity on product lifetime is investigated by pooled ordinary least squares regression. Then, we derive a product portfolio strategy that increases product complexity using panel data analysis. The results show that an increase in product complexity lengthens product lifetime and that a firm needs to design its product portfolio by concentrating its resources and capabilities on releasing products of the latest product type. The findings of this study can help a firm establish an optimal product portfolio that increases the return on investment.

Whatever you want, whatever you like: How incumbents respond to changes in market information regimes

AbstractResearch SummaryHow do incumbents respond to a market information regime change? We employ literatures on product portfolio strategies and capability adaptation to analyze the information regime change induced by the advent of streaming in the U.S. music industry. Our findings highlight that an information change impacts the strategy of organizations. We observe that the inclusion of streaming reveals increasing demand for novelty and variety. Finally, we identify breadth of experience as a driver of the type of innovation adopted. Incumbents with broader experience proliferate across‐niches. Incumbents with focused experience increase the novelty of their offerings. Overall, incumbents with higher breadth of experience perform better. We discuss the implications of these results in literatures of environmental changes, capability adaptation, product proliferation, and democratization induced by new technologies.Managerial SummaryIn several industries, rankings influence firms' decisions. Recently, many of these rankings have experienced changes to account for new demand behavior induced by digitization. We study the introduction of streaming into the Hot 100 Billboard music chart in the U.S. We find that the inclusion of streaming reveals more demand for novelty and variety. Also, we show that firms respond differently to this information change and their response depends on their experience breadth, that is the capability to address different market segments at the same time. Music labels with broader experience are capable of addressing the new demand, while those with limited experience bet on novelty as a way to defend their niche. Overall, the music labels with higher breadth of experience are the ones that perform better.

Understanding of consumers' perception toward select FMCG products

The Indian FMCG sector is growing at a healthy rate, but this sector is also experiencing several challenges like the balance of product portfolio, quality perception, attractive pricing, and innovative promotional strategies. Since FMCG companies are experiencing various challenges, it is inevitable for the marketers to understand changing consumers' perception to serve better than their competitors. The purpose of this study is to examine the consumers' perception of select FMCG products. It is also another attempt to uncover the antecedents of consumers' perception. The study incorporated academic literature, concepts of perception. To test the hypothesis statistical tools like factor analysis has been used. A survey was conducted by selecting a sample of 1150 consumers. The study found that the variables like brand loyalty, opinion on labelling, and purchase decision are not independent of gender, education, occupation, and income of the consumer.

Change of customer behaviour during the covid-19 pandemic: New Zealand supermarket retail industry

This investigation aims to analyse problems and growth opportunities caused by various changes in customer behaviour during COVID-19 for the New Zealand supermarket retail industry and the solutions provided to improve customer satisfaction and experience, especially in a panic buying situation. The background of changes in customer behaviour during the pandemic period was analysed and identified key challenges and opportunities faced by the industry. The information and data from this investigation was collected from already published resources. Different solutions and strategies to deal with these key problems were determined based on pricing and product portfolio strategy, the agility and resilience of the supply chain, remote expert service and security system technology, and the development of healthy and sustainable products. Recommendations are included in establishing long-term collaborative relationships with local suppliers, cultivating the digital adaptability of employees, making available organic food to customers, and developing good sustainable practices for the supermarket retail industry.

Wealth creation through corporate diversification – the bondholders’ perspective

The influence of corporate diversification on firm value is an important field in strategy research. Studies in strategic management and finance research have analyzed value creation through product and geographic diversification from a shareholder’s perspective. This study completes this picture by analyzing the bondholders’ perspective. It is suggested that product diversification creates value for bondholders, while geographic diversification destroys bondholder value. The hypotheses are tested on a sample of S&P 1,200 firms in 2001–2011 using a fixed-effects panel model. Drawing on prior research, bondholder value creation is measured using the Merton model. The empirical results support the hypothesis that bondholders gain value through product diversification but lose value through geographic diversification. Considering prior research results, these results show that product diversification is preferable for bondholders, while geographic diversification is preferable from a shareholder’s perspective. The opposite effects of both diversification strategies on shareholders, respectively, bondholders offer an important new perspective on corporate diversification. The results show that firms with a high level of corporate debt should struggle to justify a strategy involving geographic dispersion of activities and support a more diversified product portfolio strategy. This study also offers several avenues for investigating the bondholder’s perspective on corporate diversification in more detail.

The interactive effects of product and brand portfolio strategies on brand performance: Longitudinal evidence from the U.S. automotive industry

Product and brand portfolio extensions are effective marketing strategies to meet customer needs and to create a competitive advantage in the marketplace. Nevertheless, product and brand portfolios can get out of control easily leading to a loss of market focus and market share. This study examines how product portfolio and branding decisions affect brand performance (unit sales and market share). Prior research in marketing has investigated the effects of product portfolio and branding strategies on firm performance in isolation. However, these decisions are rarely isolated events. Usually, for multi-product and multi-brand companies, product portfolio decisions are determined in conjunction with branding decisions. Using a dynamic panel generalized method of moments estimation on a comprehensive dataset from the U.S. automotive industry between 2007 and 2013, this study examines the extent to which product and brand portfolio characteristics interact to affect brand performance. Findings reveal that while brand portfolio scope augments the positive effects of portfolio depth and innovativeness on brand performance, it attenuates the positive effects of product portfolio breadth on brand performance. Also, brand positioning in auto industry enhances brand performance only when considered jointly with product portfolio breadth, depth, and innovativeness. Finally, the present study discovers critical managerial trade-offs between product and brand portfolio decisions, as product and brand portfolio decisions are intertwined and a careful examination of the existing product and brand portfolio characteristics seem to be warranted to maximize brand performance.

Growth strategy from the suppliers' viewpoint: a case study of Denso and Hitachi Automotive Systems

This paper aims to examine and compare the growth strategies of two Japanese mega suppliers involved in research and design of automatic braking systems, and to assess their impact on inter-firm relations and transactions. The case study approach of this paper is based on in-depth interviews and archive analysis, and draws a comparison between Denso's wide customer scope strategy and Hitachi Automotive Systems' wide product portfolio strategy. In order to analyse the relevance of these two approaches, we use the growth strategy cup framework, which consists of three parameters: customers, products, and core competences. Our findings show that Denso was successful in terms of economies of customer scope, while Hitachi Automotive Systems was more dynamic in new combination-oriented innovation. In addition, our paper discusses why Hitachi Automotive Systems managed to develop an automatic braking system faster than the Toyota Group.

Growth strategy from the suppliers' viewpoint: a case study of Denso and Hitachi Automotive Systems

This paper aims to examine and compare the growth strategies of two Japanese mega suppliers involved in research and design of automatic braking systems, and to assess their impact on inter-firm relations and transactions. The case study approach of this paper is based on in-depth interviews and archive analysis, and draws a comparison between Denso's wide customer scope strategy and Hitachi Automotive Systems' wide product portfolio strategy. In order to analyse the relevance of these two approaches, we use the growth strategy cup framework, which consists of three parameters: customers, products, and core competences. Our findings show that Denso was successful in terms of economies of customer scope, while Hitachi Automotive Systems was more dynamic in new combination-oriented innovation. In addition, our paper discusses why Hitachi Automotive Systems managed to develop an automatic braking system faster than the Toyota Group.

Complementarities and Coordination: Implications for Governance Mode and Performance of Multiproduct Firms

We explore the fit between a firm’s product portfolio strategy and its governance mode with respect to complementary activities that underlie its product offering. We view firm’s governance choice through the lens of orchestrating complementary activities that entail multiple interrelated and often simultaneously occurring transactions. Our key premise is that a broader product portfolio, while offering benefits through the bundle of complementary activities, raises the coordination costs for firms, making integration of complementary activities a preferred mode of governance. We find strong support for our arguments in the context of the U.S. healthcare industry. Hospitals with a narrow service portfolio are more likely to have contracts with physicians as external service providers, and hospitals with a broad service portfolio are more likely to employ their own physicians. Moreover, hospitals that deviate from this fit-based relationship suffer a significant penalty in terms of their financial performance as measured by return on assets (ROA) and return on sales (ROS). Our findings allow us to shed new light on the linkage between strategy and governance mode and enable us to illustrate that performance differences across multiproduct firms may be better understood by considering the fit between their strategy and their governance mode instead of simply focusing either on their strategy or on their governance mode per se.

How to make an artificial satellite out of a nuclear reactor. An exploration of research-technology emergence and management at INVAP*

ABSTRACT This paper analyses research-technology (RT) emergence and management at INVAP. INVAP is an Argentinean state-owned enterprise based in Bariloche, Patagonia. Most INVAP decision-makers find it challenging to develop technology to meet client-specific needs. RTs exploit interstitial boundary-crossing knowledge. Organisational technology-rooted R&D learning can be characterised as a joint, transverse, inter-departmental and inter-disciplinary process. RT-related technologies have the potential to be dis-embedded from a specific development-project and/or technological area and re-embedded in another project or area. This paper traces the historical dynamics of six RTs at INVAP. Its perspective marginalises the conventional R&D emphasis on the generation of new products and the improvement of production processes, and highlights the importance of monitoring RT emergence. It argues that technology-based product portfolio strategies can profit substantially from good RT management and planning.

Dairy product production and lactose demand in New Zealand and Ireland under different simulated milk product-processing portfolios

Abstract Maximising dairy industry profitability involves maximising product returns for a specific set of costs or minimising costs for a certain level of output. A strategy currently utilised by the New Zealand dairy industry to optimise the value of exports is to incorporate imported lactose along with local milk to maximise the production of whole milk powder (WMP) while complying with the Codex Alimentarius (Codex) standards, in addition to increasing the exported product for every litre of milk. This study investigated the impact of different product portfolio strategies on lactose requirements for the Irish and New Zealand dairy industries for current and predicted 2020 milk output projections. A mass balance processing sector model that accounts for all inputs, outputs and losses involved in dairy processing was used to simulate the processing of milk into WMP, skim milk powder (SMP), cheese, butter and fluid milk of different proportions. All scenarios investigated projected an increase in production and revenue from 2012 to 2020. Higher cheese production reduced industry lactose demand through whey processing, while scenarios reliant on an increase in the proportion of WMP were associated with increased lactose deficits.