{"id":427,"date":"2019-03-01T15:24:59","date_gmt":"2019-03-01T21:24:59","guid":{"rendered":"https:\/\/lindagorchels.com\/blogs\/?p=427"},"modified":"2019-05-15T21:30:39","modified_gmt":"2019-05-16T02:30:39","slug":"product-platforms-definitions-and-pros-and-cons","status":"publish","type":"post","link":"https:\/\/lindagorchels.com\/blogs\/product-platforms-definitions-and-pros-and-cons\/","title":{"rendered":"Product Platforms: Definitions and Pros and Cons"},"content":{"rendered":"\n

There are two very different types of platforms: digital platforms in technology, and physical platforms in other fields. <\/p>\n\n\n\n

Digital Platforms<\/h3>\n\n\n\n

A digital\nplatform is an ecosystem designed to enable different groups to co-create value\nthrough \u201cplug-and-play\u201d capabilities. The technology infrastructure of the\nplatform touches customers and developers beyond the firm\u2019s boundaries.\nLinkedIn, FaceBook, Google and Amazon\u2014in fact most technology businesses\u2014have\nplatform-based business models.<\/p>\n\n\n\n

Physical Platforms<\/h3>\n\n\n\n

Physical platforms in other industries refer to product family or product portfolio platforms intended to reduce manufacturing and development costs for new products. In this case a platform is a common architecture, collection of assets, component designs, subsystems, or other elements shared by several products.<\/p>\n\n\n\n

Example Automotive Platform Strategies<\/h3>\n\n\n\n

The automotive\nindustry is well-known for its use of shared platforms across various car\nmodels. By using the same chassis for different vehicles or using modular\nsub-systems or common components, companies can improve time-to-market and cost\nefficiency. And the use of the approach has escalated. Volkswagen, prior to the\ndiesel hit on its reputation and profitability, had designed a mega platform\nstrategy which was considered by many in the industry to be a game-changer. As\ndescribed in a Carscoops<\/a> article:<\/p>\n\n\n\n

Both analysts and the auto industry believe that the MQB could prove to be as revolutionary as Henry Ford\u2019s production line or Toyota’s \u201cjust-in-time\u201d system. VW has been working on it since 2007, [its investment reaching] nearly US$70 billion. Considering that Morgan Stanley estimates it will result in annual gross savings of US$19 billion by 2019, that\u2019s money well spent.<\/em><\/p>

Since the MQB is designed for models with a transversely-mounted engine, VW also has two other aces up its sleeve: the MLB platform, for models with longitudinally-mounted engines, and the MSB, for premium rear- and all-wheel drive models from Porsche, Lamborghini, Bentley and, probably, Audi too.<\/em><\/p>

So that makes a total of three modular platforms, each designed from the outset to use a huge set of common components and be able to accommodate gasoline, diesel and even hybrid powertrains.<\/em><\/p><\/blockquote>\n\n\n\n

Over the past decade, other car companies worked toward similar cost-cutting measures. Just Auto<\/a> suggests that General Motors will be following a plan \u201cto use ten core architectures, many of which will have shared modules, for all future vehicles.\u201d<\/p>\n\n\n\n

It\u2019s worth\nnoting that the internet of things is affecting even the car companies.\nConnectivity is central to many of their growth strategies and they will be\nusing global technology platforms in addition to vehicle platforms.<\/p>\n\n\n\n

Both types of platform strategies are important, but the focus here is on product platforms.<\/p>\n\n\n\n

Pros of product platforms<\/em><\/strong><\/h4>\n\n\n\n

There are many\nbenefits to using a product platform strategy: reduce overall costs, force a\nlong-term perspective, and build on customer loyalty. <\/p>\n\n\n\n

  • Reduce overall costs<\/strong>. Use of common components and subsystems can reduce overall, long-term costs and leverage available resources to be more efficient and effective. Given that the components and subsystems have already been debugged and tested, the resulting products should have higher quality. Since platform development occurs less frequently than product development, major platform decisions do not need to be made as often. This has the potential to foster lean product development.<\/li><\/ul>\n\n\n\n
    • Force a long-term perspective<\/strong>. Since product platforms are intended to \u201cfit\u201d many future products, the approach is designed to accommodate future product expansion. This forces a long-term perspective and has the potential to open up diversified revenue streams.<\/li><\/ul>\n\n\n\n
      • Build on customer loyalty<\/strong>. As customers develop preferences for certain platforms, they may become more loyal. This can be especially true in situations where the customer would need to change behavior to use a different platform.<\/li><\/ul>\n\n\n\n

        Cons of Product Platforms<\/h4>\n\n\n\n

        On the other\nhand there are potential drawbacks: high upfront costs, risk of platform\nobsolescence, risk of platform recall affecting numerous products, and\npotential duplication of effort.<\/p>\n\n\n\n

        • High upfront costs.<\/strong> The upfront costs of platform design and development can be significant. As indicated in the Carscoops article, Morgan Stanley estimated that the upfront costs of the VW mega platform strategy was in the range of $70 billion. Significant savings have to be forecast to justify the investment.<\/li><\/ul>\n\n\n\n
          • Risk of platform obsolescence<\/strong>. The difference between platform planning beforehand and launching derivatives from an existing platform is one of timing. With a platform strategy, the architecture for the foundation of several future products is decided in advance. The potential risk is that the underlying assumptions were flawed and the foundational approach won\u2019t work as planned. And product platforms are not necessarily evergreen. If they become obsolete and are not periodically rejuvenated, the derivative products also risk obsolescence. Therefore product platforms need occasional updating.<\/li><\/ul>\n\n\n\n
            • Platform recalls<\/strong>. There are also quality considerations. If there is a product recall necessitated by a problem in the platform, a greater number of products will need to be recalled than would be the case without the platform strategy.<\/li><\/ul>\n\n\n\n
              • Duplication of effort<\/strong>. Some platforms provide the common architecture for offerings of different product managers. Unless there is strong communication between product managers, there may be duplication of efforts and reduced cost savings.<\/li><\/ul>\n\n\n\n

                So as with all\nstrategies, product managers have to weigh the positives and the negatives to\nmake the best decision for their product line.<\/p>\n\n\n\n

                \"Product<\/figure>
                \n

                Excerpted from Product Strategy & Roadmaps by Linda Gorchels<\/p>\n<\/div><\/div>\n","protected":false},"excerpt":{"rendered":"

                There are two very different types of platforms: digital platforms in technology, and physical platforms in other fields. Digital Platforms A digital platform is an ecosystem designed to enable different groups to co-create value through \u201cplug-and-play\u201d capabilities. The technology infrastructure… <\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[10],"tags":[19,18],"class_list":["post-427","post","type-post","status-publish","format-standard","hentry","category-product-management","tag-product-platforms","tag-product-strategy"],"yoast_head":"\nProduct Platforms: Definitions and Pros and Cons - Linda Gorchels blogs<\/title>\n<meta name=\"description\" content=\"Product platform strategy is of growing importance to product managers. 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