Offer portfolio: decide with contribution, role and overlap.
Answer:
An offer portfolio cannot be judged by revenue per reference or by an isolated growth-share matrix. An offer may be weakly profitable yet protect entry level, enable acquisition or bridge to a superior offer. Conversely, an apparently profitable reference may cannibalise a more contributive one and consume disproportionate complexity. The decision separates avoidable contribution, proven strategic role, usage overlap, complexity cost and migration path.
Method and decision:
Reconstruct net price, volume, variable margin, service, returns, promotion and specific cost, separating avoidable cost from accounting allocations. Compare segments, jobs, features, occasions and willingness to pay; measure overlap through behaviour, choice experiments or substitution history. Simulate total loss, migration to each internal offer, competitor capture, attrition and transition cost, valuing each flow by future contribution. Invest, maintain, simplify, merge, migrate or retire with a calendar, destination offer, customer guardrails and post-migration measurement date. Maintain, invest, migrate or withdraw an offer on portfolio contribution after avoidable costs and transfers, with explicit proof of its role.
Worked example:
The Essential offer earns €500k revenue, €170k variable margin and carries €190k allocated costs, of which only €80k are avoidable. On withdrawal, 55% of customers migrate to Standard, producing €120k contribution; 15% move to Premium, producing €48k; 20% leave and 10% abandon purchase. Current avoidable contribution is 170 − 80 = €90k. Migration contribution is 120 + 48 = €168k, but includes €90k that Essential would have produced, so net migration gain is €78k. Transition cost and discounts are €30k. Withdrawal value is 78 − 30 − 90 = −€42k. A service simplification saving €54k is worth +€12k versus withdrawal. The accounting €20k deficit mainly reflected shared cost. Do not withdraw: simplify Essential, raise its price and measure migration before deletion.
Limits:
Stated migration differs from constrained choices. Shared costs may only become avoidable later. Competitor reaction can change customer destinations.