A Dynamic Portfolio for Bargery Fabrics
Bargery Fabrics
William Bargery, known to everyone as “Old Bill,” has decided to retire as President of Bargery Fabrics, but he is reluctant to hand over the reins to his son, Mark, because they are in conflict about the future direction of the company.
Bargery Fabrics is a well-established manufacturer of innovative fabrics. They specialize in adding antimicrobial agents to fabrics, which slows the growth of bacteria, mold, and fungi, and eliminates odors. They compete in the medical and health care markets, selling to hospitals, nursing homes, and the public.
William Bargery believes that his company’s success in the demanding health care market is attributable to their technical prowess and their rapid response to customer requests. Mark Bargery, who is reluctant to challenge his father, believes that their technical achievements, while impressive, are insufficient. Mark recently conducted a review of the entire company and the outward signs are positive: Bargery Fabrics is growing and profitable. However, many of their products are maturing and experiencing increased competition. Mark also discovered that Bargery Fabrics has neither a strategy for future product investment nor processes to select which of their proposed products are most likely to succeed
commercially.
Therefore, Mark Bargery proposed a new strategy: Bargery Fabrics should invest in a revitalized, innovative product portfolio oriented towards the medical and health care markets, where they have a competitive advantage. They should also develop a portfolio management system that determines their products’ critical success factors, allocates research funds wisely, produces a roadmap for development, and ensures their products implement the new business strategy.
To convince his father,Mark needs a detailed plan that defends his strategy.
Motivation for the Bargery Fabrics Case
Which of their new products should a company invest in?
Many companies struggle with this question and, if the research is to be believed, most are not very good at it. On the other hand, new products often account for over 50% of a company’s growth and 40% of their profits. Therefore, a company’s future may depend prominently on the success of its new products.
Unfortunately, many companies are bad at it.
Fortunately, current research suggests that, with suitable education and training, the answer is surprisingly straightforward: Dynamic PortfolioManagement, which is both effective and easy-to-understand.
Research has established that modern portfolios are dynamic. Products in the portfolio must adapt to changes, such as evolving customer demands and different rates of technical progress. The external business environment is also dynamic, which requires that the portfolio implements the company’s strategy, responds to market changes, and adapts to technological and social forces.
Companies regard portfolio management as a competitive weapon and are, therefore, understandably reluctant to publish their data and to share their strategy. As a result, there are few workable cases in portfolio management.
Audience, Skills, and Learning Outcomes
There are two target audiences for the case: learners in a traditional company setting and students in graduate management courses. The approach in companies, which takes a day to complete, is to alternate brief seminars with workshops in which the assignments are completed. In management classes, students are prepared in lectures and the case can then be completed in a single three-hour session.
The Bargery Fabrics Case is designed to help students master the critical success factors underlying a successful portfolio; the evaluation of products with realistic characteristics; the key portfolio evaluation tools, such as the product selection matrix and the roadmap; the allocation of the budget; the assessment of the dynamic aspects of the portfolio; and the development and presentation of a coherent new product strategy.
The case includes worked assignments with multiple solutions, discussion questions, lessons from real companies, a teaching note with learning outcomes and teaching plans, and an annotated summary of the relevant research.