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Rethinking the Product Portfolio: A Generalized Investment Model

Author

Listed:
  • Timothy M. Devinney

    (Owen Graduate School of Management, Vanderbilt University, Nashville, Tennessee 37203)

  • David W. Stewart

    (Graduate School of Business Administration, University of Southern California, Los Angeles, California 90087)

Abstract

A generalized financial/product portfolio theory is developed, based on the underlying economic factors determining product profitability and risk, for applications involving the firm's product investment decisions. The model developed provides a means for differentiating market related risk and return from firm specific risk and return for each product. Two hypothetical illustrations of the model are described and the managerial implications are discussed.

Suggested Citation

  • Timothy M. Devinney & David W. Stewart, 1988. "Rethinking the Product Portfolio: A Generalized Investment Model," Management Science, INFORMS, vol. 34(9), pages 1080-1095, September.
    • Handle: RePEc:inm:ormnsc:v:34:y:1988:i:9:p:1080-1095
    DOI: 10.1287/mnsc.34.9.1080
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    Citations

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    Cited by:

    1. Jin P. Gerlach & Ronald T. Cenfetelli, 2022. "Overcoming the Single-IS Paradigm in Individual-Level IS Research," Information Systems Research, INFORMS, vol. 33(2), pages 476-488, June.
    2. Bertrand, Jean-Louis & Brusset, Xavier & Fortin, Maxime, 2015. "Assessing and hedging the cost of unseasonal weather: Case of the apparel sector," European Journal of Operational Research, Elsevier, vol. 244(1), pages 261-276.
    3. Bulai Vlad-Cosmin & Horobeț Alexandra, 2018. "A portfolio optimization model for a large number of hydrocarbon exploration projects," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 12(1), pages 171-181, May.
    4. Brown, James R., 2010. "Managing the retail format portfolio: An application of modern portfolio theory," Journal of Retailing and Consumer Services, Elsevier, vol. 17(1), pages 19-28.
    5. Frank Youhua Chen & Candace Arai Yano, 2010. "Improving Supply Chain Performance and Managing Risk Under Weather-Related Demand Uncertainty," Management Science, INFORMS, vol. 56(8), pages 1380-1397, August.
    6. Hans H. Bauer & Marc Fischer, 2001. "Ein Ansatz zur simultanen Messung von Kannibalisierungs-, substitutiven Konkurrenz- und Neukäufereffekten am Beispiel von line extensions," Schmalenbach Journal of Business Research, Springer, vol. 53(5), pages 455-477, August.
    7. Kito, Tomomi & New, Steve & Reed-Tsochas, Felix, 2018. "Disentangling the complexity of supply relationship formations: Firm product diversification and product ubiquity in the Japanese car industry," International Journal of Production Economics, Elsevier, vol. 206(C), pages 159-168.
    8. Rooderkerk, Robert P. & van Heerde, Harald J., 2016. "Robust optimization of the 0–1 knapsack problem: Balancing risk and return in assortment optimization," European Journal of Operational Research, Elsevier, vol. 250(3), pages 842-854.
    9. Nippa, Michael, 2011. "Zur Notwendigkeit des Corporate Portfolio Management: Eine Würdigung der wissenschaftlichen Forschung der letzten vier Jahrzehnte," Freiberg Working Papers 2011/02, TU Bergakademie Freiberg, Faculty of Economics and Business Administration.
    10. Zhu, Qingyun & Dhavale, Dileep G. & Sarkis, Joseph & Wang, Xuan, 2023. "Formalizing organizational product deletion through strategic cross-functional evaluation: A Bayesian analysis approach," International Journal of Production Economics, Elsevier, vol. 262(C).

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