PPO: portfolio and price optimization

Profitable growth by uncovering value drivers and loss-makers

When was the last time you cleaned out your basement?

It is deeply human to put off unpleasant activities.
In business we have to resist this impulse!

It is management's job to recognize portfolio analysis as an integral part of the strategy cascade.

To do this, it is important to regularly and systematically examine your own portfolio and consistently derive measures...

Identify profit drivers and loss makers, derive measures and strategically reposition them.

With the PPO concept from Bavaria Consulting, you get the support you need to ensure that analysis does not become knowledge and derived measures do not become a non-starter!

What is the goal of PPO?

PPO is a consulting approach by Bavaria Consulting, with which we advise our clients on the professional analysis, interpretation and planning of measures and implementation of projects relating to the optimization of portfolio and pricing.

We rely on practical tools and decades of expertise and full implementation orientation in the FMCG market.

What does portfolio mean?
Portfolio is the service program with which a market participant runs his business:

All relevant product/customer relationships are shown in the project.

What does price mean?
In this context, the word price stands for the net price that a market participant achieves for a product. On the other hand, the gross or retail price and the profit margin/gross or net benefit of our client's customers are also taken into account.

Portfolio strategy: The role of the number of items affects all areas of the company

Possible approach: Optimization through factory specialization and limiting the number of items

Create transparency with classic analysis methods

Grade! For this and all subsequent evaluations, controlling brings together the commercial data in the agreed periodicity into a product/customer matrix. The commercial result of each product, product group, segment or unit should be able to be filtered out for the overall business, customer groups or individual customers.

From analysis to strategy: more clarity thanks to the new cluster model

The Bavaria Consulting tool "Market-compliant article clustering" describes a new type of strategy tool that our clients can use to cluster their portfolio according to criteria relevant to competition. The aim is to derive long-term, market-compliant measures for the product range and profitability.

Actively managing prices – how does that work?

Price changes have an effect. Always. Therefore, they must be targeted and the impact must be made predictable.

Knowing about the price elasticity of the product group makes price changes more predictable.

The goal is to achieve positive profit effects with price increases or decreases!

The degree of change in quantity depends on the price elasticity of the commodity group, the product or the brand.

The price elasticity of a product depends on the market environment:

Experience shows that a 1% price increase in a price-elastic environment can result in a 7% improvement in profit!

The portfolio optimization - optional project stages

Our experience is your success!

The partners of Bavaria Consulting have more than 20 years of project experience in the field of price and portfolio optimization.

Our expertise is cross-industry - food, beverage and pharmaceuticals.

In the Sales Excellence Magazin / Springer Verlag you will find our current press article "Portfolio analysis - cleaning up in lockdown".

Ihr Ansprechpartner:
Oliver Bank

Head of Marketing Experte für Portfolio- und Preis-Optimierung
Phone+49 89 18908070
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