Development of a Methodology to Design Product Portfolios in Accordance to Corporate Goals Using an Evolutionary Algorithm

Abstract

Due to diminishing product life cycles and a need to satisfy heterogeneous customer requirements, companies across all industries introduce a multitude of product variants into their portfolio. These portfolio expansions often happen unsystematically while hindering the alignment with corporate goals. However, to grow sustainably and remain competitive, it is essential for a company's product portfolio to coincide stringently with corporate goals. While current research focusses on portfolio design based on financial indicators, none of the methodologies is successful in measuring portfolio alignment along with corporate goals and deriving recommendations for actions for product managers based on key figures. This paper promotes a methodology to overcome these limitations. The method is then validated using an evolutionary algorithm.