Portfolio management of R&D projects: implications for innovation management

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Date: July 2001
From: Technovation(Vol. 21, Issue 7)
Publisher: Elsevier Science Publishers
Document Type: Brief article
Length: 193 words

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Abstract :

Globalization of markets and new business practices are prompting high-tech firms to reconsider their competitive strategy. The increasing complexity of technologies in addition to shorter product life cycles are also forcing firms to rely on R&D as a source of strategy. More importantly, firms are inclined to evaluate their technologies from a portfolio's perspective in which a set or a sub-set of R&D projects is evaluated together, in relation to each other. Portfolio techniques can help strategic managers in evaluating whether a portfolio of products is adequate from the perspective of long-term corporate growth and profitability. Obviously, when R&D projects are evaluated relative to one another, technical capability management of such projects must be carded out concurrently. In this paper, R&D Project Portfolio Matrix is used as a tool for analyzing a portfolio of R&D projects by linking competitive advantages of a firm to benefits these projects may provide to customers. Examples of batteries for electric vehicles (EV) and hybrid electric vehicles (HEV) are provided to illustrate how such a matrix is used, and some of the implications for innovation management of such projects. Keywords: Portfolio management; R&D; Innovation; Competitive advantage; Automotive industry

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Gale Document Number: GALE|A75997332