Aerospace and Electronic Systems Magazine March 2017 - 55

Farina et al.
Both matrix models are to be applied to all lines of product
(LoPs). When necessary, a deeper granularity shall be applied. In
the McKinsey matrix, LoPs/products are evaluated on the two axes
against market segment attractiveness and the relevant company's
competitive positioning. They are plotted on nine cells which indicate whether the company should invest in a product, harvest/
divest it or conduct further research on it, build selectively, protect
its positioning, or refocus.
Such analysis requires specific information related to product
lines: market external analysis, market value, addressable opportunities, and product strategy with qualitative and quantitative market objectives.
The BCG complements the McKinsey analysis with a specific
evaluation of LoPs/products against cash absorption (Investment
%) versus cash generation (Margin% − Investment% − Selling,
General, and Administrative Expenses %).3
Eventually, spider graphs are to be applied to Question Marks
and Rising Stars products (to Pets only if necessary). In this activity, the items of each product line are compared with respect to
competitors' and market/customer needs. Product indicators can be
tailored for the specific business segment under analysis. Typical
indicators are:
C

Market share,

C

Technological advantage,

C

Geographical footprint,

C

Performances and usability,

C

Price competitiveness, and

C

After sales support.

C
C

C

C

C

Original scope of work and objectives,
Progress and achievements, including milestone and order
in-take,
Financials-budget, authorized costs, current spend, and
forecast spend,
Variances to product business plan and order intake plan (for
product development projects only), and
Variances to product and/or technology roadmaps.

The D-CTO is responsible for collecting all this information
for each BU and preparing a divisional report. The D-CTO is responsible for monitoring that work has progressed in accordance
with the approved investment plans and that the product business
plans that underpin them are still sound. Key performance indicators (KPIs) can be used to measure the success of an on-going
project. Example KPIs are shown in Table 1.
The C-CTO has the tasks of (i) collecting all the information
from the D-CTOs and (ii) reporting periodically to top management on the progress of the R&D activities. In other words, the
C-CTO approves or stops the progress of the activities and can ask
for proper corrective actions.

MANAGE THE IPR

This modelling provides the basis for the final phase of the
appraisal, where the models' outputs need to be elaborated on and
particular focus is drawn onto those LoPs/products that the model
suggests need critical and specific action.
This results in the preparation of the Portfolio Optimization
Plan, where strategic recommendations (including recommendations on supply chain, make or buy, marketing and sales capacity,
etc.) and actions are identified for implementing the most profitable investment/product choice and a sustainable product line mix
that improve company's performance.

Intellectual property, such as know-how, trade secrets, embedded
capabilities, processes, technologies or other R&D results are vital
assets for a company. Identifying IP and and establishing the most
appropriate protection for the IP within the various scopes of a
company's business are challenging issues for the business.
IP need to be protected (becoming IPRs) taking into account their
business strategic importance and their market technological value.
First, it is necessary to understand whether an IP can be used
as a technological commodity in the business. In turn, there is the
need to establish how to protect the intangible asset and successfully exploit its potential as a commercial value.

Table 1.

MANAGE COMPANY R&D INVESTMENTS
This topic is widely discussed in [3]. The process for the preparation of the company R&D investment plan typically takes several
months. It usually starts in the second quarter of the year and completes by the year end. The CTO of each BU of the company prepares his or her investment requests and sends them to the D-CTO
for harmonization with other BUs and with the divisional strategy.
The C-CTO collects these requests from D-CTOs, checks alignment with the technology and strategy plans, and also the order
intake plan. It may ask for clarifications, and at the end, assigns a
priority level to each request. The priority assigned by the C-CTO
3

will drive the final selection process. Company funded R&D activities shall be monitored throughout the year. There are a number
of factors that need to be assessed. These include:

KPI Indicators
KPI Name
Budget adherence

Actual costs versus
budgeted costs

Milestone achievement

Percentage of
milestones achieved on
time

Order intake
achievement

Order intake value
achieved versus order
intake value forecast

Percentage on revenues.

MARCH 2017

Description

IEEE A&E SYSTEMS MAGAZINE

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