Case Detail

Case Summary

Danaka Corporation: Healthcare Solutions Portfolio Management

Case Number: 5-108-006, Year Published: 2008

HBS Number: KEL363

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Authors: Robert A Cooper

Key Concepts

Revenue Growth, Enterprise Portfolio Management, Business Units, R&D Management, Strategy Alignment, Innovation Management, Portfolio Management, Research and Development Management


A major barrier for growth of large multi-business-unit firms is the inability to resource the critical initiatives to win—both in terms of dollars and people. The underpinning of the challenge involves the conflict between resourcing current cash-generating legacy businesses vs. new initiatives which may not, in the short term, produce positive financial results. Most companies do not have a formal portfolio process to deal with this fundamental issue. The Healthcare Solutions business unit of Danaka is a fictional business based on real business experiences. The principle challenge is the need for this business to free up $300 million of current, budgeted R&D projects to fund new, unfunded initiatives to meet its five-year growth objectives. Tools and processes are introduced via interactive spreadsheets that show how to make the tough portfolio decisions on a project-by-project basis.

When business leaders set financial goals, they must understand how they are expending their resources. More often than not, significant changes must occur that could be wrenching to the organization. The key learning objectives of the case are: (1) realizing the importance of doing the portfolio analysis, (2) discussing the processes and issues involved in making the changes, and (3) understanding how to put the decision process in place.

Number of Pages: 18

Extended Case Information

Teaching Areas: Management, Strategy

Geographic: Global

Industry: Chemicals, Healthcare, Agriculture

Organization Name: Danaka Corporation

Organization Department: Senior Leadership

Organization Size: Medium

Decision Maker Position: Global Business Unit Leader

Year of Case: 2006