Innovation Portfolio Matrix

The Innovation Portfolio Matrix is a 2x2 matrix used to assess the risk and potential reward of various projects or initiatives. It allows businesses to prioritize their investments and allocate resources accordingly.

At a very high level, the Innovation Portfolio Matrix is used in the context of business, marketing, finance.

Innovation Portfolio Matrix quadrant descriptions, including examples
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What is the Innovation Portfolio Matrix?

A visual explanation is shown in the image above. The Innovation Portfolio Matrix can be described as a matrix with the following quadrants:

  1. High Risk/High Reward: Projects with a high potential for success, but also a high potential for failure (e.g. launching a new product)
  2. Low Risk/High Reward: Projects with a low risk of failure, but also a high potential for success (e.g. expanding an existing product line)
  3. High Risk/Low Reward: Projects with a high potential for failure, but also a low potential for success (e.g. launching a new product in a niche market)
  4. Low Risk/Low Reward: Projects with a low risk of failure, but also a low potential for success (e.g. expanding an existing product line in a niche market)

What is the purpose of the Innovation Portfolio Matrix?

The Innovation Portfolio Matrix is a 2x2 matrix used to assess the risk and potential reward of various projects or initiatives. It allows businesses to prioritize their investments and allocate resources accordingly. The matrix is divided into four quadrants, each representing a different level of risk and reward.

The top left quadrant is labeled “High Risk/High Reward” and is used to identify projects that have a high potential for success, but also a high potential for failure. These projects are often innovative and may require a significant investment of resources. Examples of projects that could fit into this quadrant include launching a new product, entering a new market, or developing a new technology.

The top right quadrant is labeled “Low Risk/High Reward” and is used to identify projects that have a low risk of failure, but also a high potential for success. These projects are often less innovative, but may still require a significant investment of resources. Examples of projects that could fit into this quadrant include expanding an existing product line, entering an existing market, or improving an existing technology.

The bottom left quadrant is labeled “High Risk/Low Reward” and is used to identify projects that have a high potential for failure, but also a low potential for success. These projects are often innovative, but may require a minimal investment of resources. Examples of projects that could fit into this quadrant include launching a new product in a niche market, entering an untested market, or developing a new technology with uncertain potential.

The bottom right quadrant is labeled “Low Risk/Low Reward” and is used to identify projects that have a low risk of failure, but also a low potential for success. These projects are often less innovative, and may require a minimal investment of resources. Examples of projects that could fit into this quadrant include expanding an existing product line in a niche market, entering an existing market with limited potential, or improving an existing technology with limited potential.


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What templates are related to Innovation Portfolio Matrix?

The following templates can also be categorized as business, marketing, finance and are therefore related to Innovation Portfolio Matrix: Effort Impact Matrix, Gap Analysis Matrix, Growth Share Matrix, Kraljic Matrix, Outsourcing Matrix, Quadrant Analysis, Risk Analysis Matrix, Risk Value Matrix. You can browse them using the menu above.

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