By monitoring KPIs, managers can identify which assets are performing well and which are not, facilitating informed decisions about where to allocate resources to maximize returns and drive growth. KPIs also help in assessing risks and opportunities within the portfolio, allowing for strategic adjustments in response to market changes or internal shifts. Ultimately, the use of KPIs enhances transparency and accountability, as stakeholders can evaluate progress against defined objectives, ensuring that the portfolio's evolution is in step with the company's long-term vision and objectives.
KPI |
Definition
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Business Insights [?]
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Measurement Approach
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Standard Formula
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After-Sales Service Efficiency More Details |
The efficiency of after-sales service, impacting customer satisfaction and repeat business.
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Allows businesses to evaluate the effectiveness and speed of their after-sales support, and identify opportunities for improvement.
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Considers metrics such as the number of service calls resolved on the first visit, time taken to resolve issues, and customer satisfaction with the service.
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Number of Service Issues Resolved on First Visit / Total Number of Service Calls
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- An increasing after-sales service efficiency may indicate improved processes or customer service initiatives.
- A decreasing efficiency could signal issues with resource allocation or customer satisfaction.
- Are there specific areas of after-sales service that receive more complaints or require more resources?
- How does our after-sales service efficiency compare with industry benchmarks or customer feedback?
- Invest in training and development for after-sales service staff to improve their skills and knowledge.
- Implement customer feedback mechanisms to identify areas for improvement in after-sales service processes.
- Utilize technology solutions such as CRM systems to streamline after-sales service interactions and improve efficiency.
Visualization Suggestions [?]
- Line charts showing the trend of after-sales service efficiency over time.
- Pareto charts to identify the most common issues affecting after-sales service efficiency.
- Low after-sales service efficiency can lead to customer dissatisfaction and reduced repeat business.
- High efficiency without a focus on quality may result in quick but unsatisfactory resolutions to customer issues.
- Customer relationship management (CRM) software to track after-sales service interactions and customer feedback.
- Workflow management tools to streamline after-sales service processes and allocate resources effectively.
- Integrate after-sales service efficiency with customer satisfaction metrics to understand the impact on overall customer experience.
- Link with inventory management systems to ensure timely resolution of after-sales service issues related to product availability.
- Improving after-sales service efficiency can lead to higher customer satisfaction and loyalty, positively impacting long-term business performance.
- However, a focus solely on efficiency may neglect the quality of after-sales interactions, potentially harming customer relationships.
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Brand Equity More Details |
Value derived from consumer perception of the brand, which can impact the portfolio's overall market share and profitability.
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Enables understanding of the brand's strength in the market and its impact on company's revenue and profitability.
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Measures consumer perception and financial value of a brand through metrics such as brand recognition, loyalty, and perceived quality.
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No standard formula; assessed through various market research techniques and financial analysis.
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- Increasing brand equity may indicate successful marketing campaigns or product innovation that resonates with consumers.
- Decreasing brand equity could signal negative publicity, product quality issues, or increased competition.
- Are there specific demographics or regions where brand equity is particularly strong or weak?
- How does our brand equity compare with competitors in the same market?
- Invest in targeted marketing and advertising to strengthen brand perception.
- Focus on delivering consistent and high-quality customer experiences to build brand loyalty.
- Regularly monitor and respond to consumer feedback and sentiment to address any negative perceptions.
Visualization Suggestions [?]
- Line charts showing brand equity trends over time.
- Comparison bar charts to visualize brand equity relative to competitors.
- Declining brand equity can lead to loss of market share and decreased profitability.
- Negative consumer perception can impact long-term brand value and require significant resources to repair.
- Brand tracking and sentiment analysis tools like Brandwatch or NetBase to monitor consumer perception.
- Customer relationship management (CRM) systems to track customer interactions and feedback related to the brand.
- Integrate brand equity data with sales and marketing systems to understand the impact on revenue and customer acquisition.
- Link brand equity metrics with product development and innovation processes to align with consumer preferences.
- Improving brand equity can lead to increased customer loyalty and willingness to pay premium prices.
- Conversely, declining brand equity may require increased marketing spend and efforts to regain consumer trust.
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Capacity Utilization Rate More Details |
The extent to which the company is using its production capacity, which can affect the ability to scale the portfolio.
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Reflects the efficiency and scalability of production processes, highlighting underused resources or bottlenecks.
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Examines the proportion of potential output that is actually realized, typically using metrics like actual output over a period and maximum possible output.
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(Actual Output / Maximum Possible Output) * 100
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- Increasing capacity utilization rate may indicate a need for expansion or investment in additional production facilities.
- Decreasing rate could signal overcapacity or underutilization of existing resources.
- What are the primary factors limiting our capacity utilization?
- Are there specific products or processes that are causing bottlenecks in production?
- Implement lean manufacturing principles to optimize production processes and reduce waste.
- Invest in predictive maintenance to minimize downtime and maximize equipment utilization.
- Regularly review and adjust production schedules to align with demand fluctuations.
Visualization Suggestions [?]
- Line charts showing capacity utilization rates over time to identify seasonal or long-term trends.
- Stacked bar charts comparing utilization rates across different production facilities or product lines.
- Low capacity utilization can lead to higher production costs and reduced profitability.
- High utilization without proper maintenance can result in increased equipment failures and downtime.
- Enterprise Resource Planning (ERP) systems to track production schedules and resource allocation.
- Manufacturing Execution Systems (MES) for real-time monitoring of production processes and equipment utilization.
- Integrate capacity utilization data with supply chain management systems to ensure timely availability of raw materials and components.
- Link with financial systems to understand the cost implications of capacity utilization levels.
- Increasing capacity utilization can lead to economies of scale and lower production costs.
- However, it may also put strain on existing resources and impact product quality if not managed effectively.
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CORE BENEFITS
- 52 KPIs under Portfolio Management
- 15,468 total KPIs (and growing)
- 328 total KPI groups
- 75 industry-specific KPI groups
- 12 attributes per KPI
- Full access (no viewing limits or restrictions)
FlevyPro and Stream subscribers also receive access to the KPI Library. You can login to Flevy here.
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Cash Flow Return on Investment (CFROI) More Details |
The return on investment based on the cash flow generated, used to assess the value of different portfolio investments.
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Offers insights into the value a company generates from its investment in assets, useful for comparing profitability across investments and time periods.
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Considers the cash returns generated by a company relative to its invested capital.
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Cash Flow from Operations / Total Invested Capital
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- Increasing CFROI may indicate improved cash flow management or successful investment strategies.
- Decreasing CFROI could signal declining profitability or inefficient use of capital.
- What factors are contributing to changes in cash flow and investment returns?
- How does our CFROI compare to industry benchmarks or historical performance?
- Implement cost-saving measures to improve cash flow, such as renegotiating supplier contracts or reducing operating expenses.
- Diversify investment portfolio to spread risk and potentially increase overall CFROI.
- Regularly review and adjust investment strategies to align with changing market conditions and business goals.
Visualization Suggestions [?]
- Line charts showing CFROI trends over time.
- Comparison bar graphs to illustrate CFROI for different investment categories.
- Low CFROI may indicate poor investment decisions or underperforming assets.
- High CFROI could be a result of short-term gains that are not sustainable in the long run.
- Financial analysis software like Bloomberg Terminal or FactSet for in-depth cash flow and investment analysis.
- Portfolio management platforms to track and evaluate the performance of different investments.
- Integrate CFROI analysis with financial planning and budgeting systems to align investment decisions with overall corporate strategy.
- Link CFROI with performance management systems to incentivize and reward investment strategies that contribute to improved cash flow returns.
- Improving CFROI may lead to increased shareholder value and better financial health for the organization.
- However, aggressive pursuit of high CFROI could lead to excessive risk-taking and potential financial instability.
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Competitive Position Index More Details |
A ranking of the company's products by market position relative to competitors, indicating competitive strength.
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Provides a comprehensive view of a company's competitive stance within its industry, essential for strategic planning.
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Considers a company's market share, growth rate, and profitability relative to its competitors.
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No standard formula; typically involves a weighted analysis of various market and financial metrics.
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- Increasing competitive position index may indicate successful product launches or market expansion strategies.
- A decreasing index could signal increased competition or declining market share.
- Which specific products or segments are driving changes in the competitive position index?
- How does our index compare with key competitors, and what factors contribute to the differences?
- Invest in product innovation and differentiation to maintain or improve competitive position.
- Conduct regular competitive analysis to identify areas for improvement and potential threats.
- Explore strategic partnerships or acquisitions to strengthen market position.
Visualization Suggestions [?]
- Line charts showing the trend of the competitive position index over time.
- Spider charts comparing the company's index with competitors across different product categories.
- A declining competitive position index may lead to loss of market share and revenue.
- An artificially inflated index due to short-term tactics may not be sustainable and could damage long-term competitiveness.
- Market intelligence platforms like Nielsen or Euromonitor for competitive benchmarking and analysis.
- Customer relationship management (CRM) systems to track customer feedback and preferences that impact competitive position.
- Integrate competitive position data with product development and marketing systems to align strategies with market needs.
- Link with sales and revenue management systems to understand the impact of competitive position on financial performance.
- Improving the competitive position index can lead to increased market share and revenue growth.
- However, aggressive strategies to boost the index may impact profitability and require careful cost-benefit analysis.
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Contribution Margin by Product More Details |
The contribution margin for each product, which is the sales price minus variable costs, used to gauge individual product profitability.
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Reveals which products are most and least profitable, guiding pricing strategies and resource allocation.
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Evaluates the profit margin for each product by subtracting variable costs from the product's selling price.
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(Selling Price per Unit - Variable Cost per Unit) * Units Sold
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- Increasing contribution margins may indicate successful pricing strategies or cost control measures.
- Decreasing margins could signal rising variable costs or pricing pressures in the market.
- Are there specific products with consistently low contribution margins?
- How do our contribution margins compare with industry averages or benchmarks?
- Regularly review and adjust pricing strategies based on product profitability.
- Identify and address cost drivers for products with low contribution margins.
- Explore opportunities to reduce variable costs through process improvements or supplier negotiations.
Visualization Suggestions [?]
- Line charts showing contribution margins over time for each product.
- Pareto charts to identify products with the highest and lowest contribution margins.
- Declining contribution margins may lead to overall profit erosion despite increasing sales.
- High contribution margins for certain products may indicate potential overpricing and loss of market share.
- Cost accounting software to accurately allocate costs and calculate contribution margins.
- Business intelligence tools for in-depth analysis of product profitability and cost structures.
- Integrate contribution margin analysis with sales and marketing systems to align pricing with profitability.
- Link with procurement and supply chain systems to optimize purchasing and production costs.
- Improving contribution margins can lead to increased overall profitability and financial stability.
- However, aggressive cost-cutting measures may impact product quality and customer satisfaction.
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In selecting the most appropriate Portfolio Management KPIs from our KPI Library for your organizational situation, keep in mind the following guiding principles:
It is also important to remember that the only constant is change—strategies evolve, markets experience disruptions, and organizational environments also change over time. Thus, in an ever-evolving business landscape, what was relevant yesterday may not be today, and this principle applies directly to KPIs. We should follow these guiding principles to ensure our KPIs are maintained properly:
By systematically reviewing and adjusting our Portfolio Management KPIs, we can ensure that your organization's decision-making is always supported by the most relevant and actionable data, keeping the organization agile and aligned with its evolving strategic objectives.