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It has become a common belief that more choices are better than fewer choices. Yet, Accenture and AMR Research have found that not to be the case with many consumer packaged goods companies and retailers. While truly innovative new products usually find a receptive audience, many product introductions merely add complexity—to operations, sales portfolios, supply chains and retailing—while not contributing to profitability. As discussed in the article Innovation in Consumer Products, reaching the right balance of efficient production, product differentiation and profitability is part art and part science—with a growing emphasis on the science.
According to the AMR Research 2008 study, Innovation in Consumer Products, only one in two product ideas actually move from development to launch, and only two-thirds generate the revenues anticipated once they hit the market. Clearly, not enough is known or done upfront to identify "winners." The corollary also seems to be true—development of new products or ideas that most likely will not perform is not stopped soon enough to preserve resources that would be better deployed elsewhere.
Consumer packaged goods companies can succeed at innovation and enjoy significant returns on their investment if they commit to:
Accenture’s holistic portfolio optimization solution offers a unique approach to helping consumer packaged goods companies and retailers increase profitability by keeping the right products in their portfolio and the right processes, methodologies and strategies as part of their product life cycle management efforts. The solution identifies product attributes that are valued by consumers, and uses them as a basis for refining the mix and size of product lines to improve sales.
By combining the consumers’ view on product attributes, in-depth analytics on portfolio optimization; retailer insight; supply chain and industry cost-to-serve data; and product life cycle management, Accenture provides an end-to-end solution for product and process complexity management. This holistic approach allows consumer packaged goods companies to make sure they offer the right products or services, for the right reasons, to support profitable and sustainable growth.
Contact us to learn more about portfolio optimization for consumer goods and services companies.
Contact Renee Sang to schedule a portfolio optimization workshop at the Accenture Customer Innovation Network. We invite you and your colleagues to explore how optimizing your end-to-end product portfolio can help improve your innovation process and increase top line profitability. The Accenture Customer Innovation Network has locations in Chicago, Milan, Dusseldorf and Shanghai, and provides consumer goods and services companies with customized workshops and access to demonstrations and research.
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