Research On Optimum Product Portfolio For Engineering Machinery Manufacturing Enterprise Based On Four Dimensional Analysis Method

With fierce market competition and increasing sales cost, sales profit for engineeringmachinery manufacturing enterprises drops gradually and the level of products’ salesefficiency will influence their sales revenue and profit directly. Therefore, companies need toreposition and analyze their product portfolio because optimum product portfolio plays a keyrole in keeping their sustaining competitive advantages. This thesis makes a deep analysis oncurrent optimum product portfolio analysis methods based on a wide range of market researchof relevant projects using the method of combining theory with practice.There are two main optimum product portfolio analysis methods at present. Bostonmatrix analysis model is built by two indexes of market share and sales growth rate andproducts are divided into four categories of question marks, stars, cash cow and dogs. Threedimensional analysis chart method, constructing the model by increasing profitability as thethird index on the basis of Boston matrix, divides products into eight categories. Thencorresponding marketing strategy is provided according to the characteristic of products ineach space position. However, the two analysis methods both have shortages of singleevaluation index, too rigid separation point and so on.Through adding sales efficiency as the fourth evaluation index, the paper puts forward afour dimensional analysis method, whose evaluation index system includes market share,sales growth rate, profitability and sales efficiency, on the basis of Boston matrix and threedimensional analysis chart method. Meanwhile, the new method makes effectiveimprovements for shortages of two existing popular methods. Then the paper makes a deepanalysis and study of sales efficiency, analysis ways of which encompass sales analysis, salescost analysis and return on assets analysis. In view of the specific meaning of sales efficiencyin the new method, the paper identifies products’ sales efficiency mainly by sales cost analysisand the other two are only used in special circumstances to ensure getting reliable andcomprehensive information.When analyzing companies’ product portfolio by four-dimensional analysis method,enterprises can adopt corresponding marketing strategy according to characteristics and features of each product item on the above four indexes. Meanwhile, enterprises will developnew product items to meet market demands at the right time and eliminate recession productitems in order to adjust their product portfolio timely and realize optimum product portfoliopersistently. This method not only improves the rationality and validity of optimum productportfolio analysis, but also promotes companies’ limited resources to be distributedscientifically, reasonably and effectively. Meanwhile, it can enhance companies’ ability ofquick response to market changes and promote to realize their management goals.