On the Appropriateness of Flexibility Approach to the Product Portfolio Selection: A Case Study

Product portfolio selection is one of the key drivers for the medium and long term success of most firms. In this paper we conduct an empirical investigation on a flexibility approach to select projects and allocate budget in a product portfolio. The model is concerned with the resolution of uncertainty over the product development life cycle and deals with technical, market and cost factors all together. Previous results indicate the effectiveness of this approach in evaluating projects individually. However, until the present, no study has been carried out to check the appropriateness of this model to compare and select projects. Our conclusions are in line with the applicability of the referred model to tackle the problem of selecting projects and allocating budget in a portfolio of new products and/or technologies