Within a product portfolio, one finds an assortment of items that cover a variety of consumer needs and segments. There are probably some high and low performers. Perhaps there have been some changes to the market since the current portfolio strategy was defined. It’s even likely that pricing in the category has changed—perhaps driven by changes in cost of goods.
Faced with constantly changing markets, it’s necessary for a franchise to continuously re-evaluate its portfolio strategy in order to defend financial goals and positioning. Portfolio adjustments can have short-term and long-term consequences, so it’s important to consider the full range of options and potential costs and benefits to each. Here are some common strategic pitfalls that brand managers can run into when trying to optimize a portfolio.