Ranking/evaluating the portfolio and making portfolio decisionIt has been asserted that projects should be terminated when they do not provide economic value represents the failing of the purely quantitative (NPV, ROI) model of selection. While Carr (2009) presents a good argument for the quantitative approach, there are instances where projects can be financially/economically inefficient but present business value in terms of exploring new markets, new technologies or developing reputations. For example as Filipov and Mooi’s (2011) case study of Phillips Research shows, the value of projects to competitive positioning can be used in place of ROI measures for innovative NPD organizations.
Discuss, giving your own insight or example adding value to the discussion
Carr, N.G., (2009) “Unreal Options”. Harvard Business Review. 80(12( pg. 22
Fillipov, S., and Mooi, H.G., (2011) “Innovation Portfolio Management: The Case of Phillips Research”. IEEE Conference on Industrial Engineering and Engineering Management. pp. 834-838. IEEEXplore
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