Decision-Making in Portfolio Management; A qualitative case study on how Polarbröd can utilize their product portfolio and improve prioritization between projects with regard to risk and value

Abstract

Due to the fast changing market environment of today, with increasing globalisation, technological development, and steadily changing customer demand, research show that it is of significant importance to detect how companies use their resources in order to develop new products to ensure their future survival and prosperity. This qualitative case study provides insights on how portfolio management can enhance the decision-making and prioritization between development projects and the process of assessing components of risk and value potential of new products. The study aims to focus on a specific case within the Swedish bread industry and the purpose is to explore how the decision-making process regarding new product development within one of the major actors, Polarbröd, has developed over time and how it can be improved further. This gives insights on the company’s product development and usage of portfolio management, and aims to highlight the complexity of the field and its connected issues of communication and understanding. The study concludes that Polarbröd would benefit from complementing their current portfolio management with a formal checklist for their risk and value assessment, in which the company would get a different, more holistic assessment. This would also make it possible for Polarbröd to conduct more accurate decisions by redefining their present definitions of risk and value. The study identifies value as the parameter that requests most attention in the checklist, since the current assessment at Polarbröd is inadequate. The risk assessment could beneficially be visualized through applying a model that illustrates the relation between different risk categories and portfolio categories, all to improve understanding and communication between the involved parties in the decision-making process.