Risk return approach to product portfolio strategy

Richard N Cardozo, Jerry Wind

Research output: Contribution to journalArticle

18 Scopus citations

Abstract

This article describes how a risk-return portfolio analysis, as originally developed in economics and finance, can be applied to product-line decisions. This approach uses direct estimates of return, and explicitly considers risk, or variation in return; most of the product portfolio models in use today forecast return by correlation, and lack explicit treatment of risk. The approach provides guidance for new product development activities as well as for allocating resources among a corporation's existing product lines. The article explains how organizations can apply this approach to their own product portfolio decisions, and includes a detailed example of how one company used this model.

Original languageEnglish (US)
Pages (from-to)77-85
Number of pages9
JournalLong Range Planning
Volume18
Issue number2
DOIs
StatePublished - Apr 1985

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