This paper aims to examine whether the management of a broad product portfolio has become complex in today’s “fast-moving markets” and caused new products’ failure.
In the present day, the company’s innovation performance is strongly affected by a chosen strategy of resource allocation. As a matter of fact, in today’s markets, there is a greater probability of new products’ failure than success (Klingebiel and Rammer, 2014). Nevertheless, due to competitive pressure, companies are forced to invest in innovations and broaden their product portfolios, even if their commercial viability is unknown.
Thus, making decisions concerning resource allocation, modern real-world firms face both uncertainties in relation to the product’s current value and uncertainty about its value in the future (Leiblein, Chen and Posen, 2017). It goes without saying that the majority of companies aim to improve safety and focus on risk minimization (Biedron, 2020). However, the business environment will never be safe and predictable as multiple disruptions, such as industrial mishaps, market failures, disease outbreaks, and cyber-attacks, may occur on a daily basis (Reeves and Deimler, 2011).
Therefore, in the present day, competitive advantages refer to creative thinking, client-oriented performance, and the ability to collect and process information with the use of modern digital technologies (Kang and Montoya, 2014). In this case, companies should scrutinize their portfolios in order to eliminate unprofitable investments that may lead to an increased probability for the organization to fail new products (Anand, 2008). In addition, the escalation of a broad portfolio’s costs may be eliminated by limited resource commitments and the exclusion of deteriorating projects (Klingebiel and Rammer, 2014). A diversification and breadth of a portfolio may be justified only by customers’ demand (Brzęczek, 2018). Thus, successful companies are currently developing customers’ understanding to meet their needs in advance.
In general, when a company tries to compete with other firms with a substantial number of similar products, it may fail as new products will be both excessive in the market and low-quality due to a lack of proper investment spread on multiple projects. For instance, Microsoft’s Zune launched to compete with Apple’s iPod failed due to the absence of any new ideas and the existence of the same digital services (Sabarinath, 2019). In general, Microsoft has a broad portfolio, however, the introduction of multiple new products has already impacted the company in a highly negative way.
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