The product platform strategy is well known for its several positive effects. However, these effects differ under different market situations. Several product platform projects related decisions can influence these effects. This research work will show how these effects are influenced by decisions under different market situations, findings will help academics in enriching product platform theories and, it will help managers to take proper decisions to enhance the possibility of product platform project success

Uddin, Abul Hasnat Md Zakir

HSSS - Hochschulschriftenserver der SLUB

Product platforms: influencing factors and effects

Qucosa

Technische Universität Dresden: Qucosa

Beitrag 19Product platforms: influencing factors andeffectsAbul Hasnat Md Zakir UddinJunior Professorship in Innovation Management and Entrepreneurshipzakir.uddin@tu-dresden.deAbstract: The product platform strategy is well known for its several positive effects.However, these effects differ under different market situations. Several product platformprojects related decisions can influence these effects. This research work will show howthese effects are influenced by decisions under different market situations, findings willhelp academics in enriching product platform theories and, it will help managers to takeproper decisions to enhance the possibility of product platform project success.IntroductionIn several industries, companies are facing increasing pressure in terms of shorterproduct life cycles, cost competition and diversified demands in the market. In re-sponse, they are considering strategies like product platforms. In the literature, suc-cessful product platform stories are presented for companies like Black & Deckerpower tools and Hewlett-Packard Deskjet printers [ML97], and Intel Microproces-sors [CG02]. Product platforms have a longer usage time span than single derivativeproducts. During this time, the market situation also changes and companies needto adjust to this change. So, product platforms need to adjust to this evolving situa-tion, and platform development project decisions can help them in this context. Onthe other hand, companies decide to invest in product platforms due to the differenteffects like developing several variants faster and cheaper etc. [RU98]. However, atdifferent market situations these effects also change. So analysing platform effects indifferent market situation, and finding impacts of platform project related decisionson them can help improving platform project management and their success.Research problem and research questionDifferent aspects of product platforms like optimization for product platforms, multi-ple market segments etc. are covered in several works. Effects of product platformsare mentioned by several authors sporadically. But how these effects differs in diffe-rent market situations and how product platform project decisions influence them isWERKSTATT EUROPÄISCHEN DENKENS – 20 JAHRE IHI ZITTAU 145not considered. So there is a clear gap in literature about the relationship betweenproduct platform decision, platform effects and market situations. A survey based re-search can help to explain this relationship and can significantly contribute to productplatform theories as well as help managers to take decisions in different market si-tuations. So, the main research question is: What is the relationship between marketsituation and product platform effects, and how can decisions help achieving desiredeffects in different market situations. The main question can be broken down intofollowing sub questions: What are the effects of product platforms expected by in-dustries? How are the effects interdependent on each other? What are the potentialmarket factors that have an impact on the product platform definition (i.e. externalfactors)? How do expected effects of product platform projects depend on specificmarket situations? How is the influence of different decisions on specific effects incertain market situations? What are the possible negative effects in product platformprojects? How can these effects be minimized with managerial decisions?Literature reviewProduct platforms are defined in various ways, ranging from collections of the com-mon elements implemented across a range of products [Mc95] and a commonstructure from which a stream of derivative products can be efficiently developedand produced [ML97] to an even broader definition as a collection of assets (i.e.components, processes, knowledge, people and relationships) that are shared bya set of products [RU98]. In this research product platforms are considered as thecollection of modules or parts that are common to a number of products, and thiscommonality is developed intentionally to attain certain effects.The effects of platform-based products are determined by the specific platform de-finition of a company, which takes various aspects into consideration, like externalfactors, decisions, etc. [HHV03; HY11]. The ultimate target of product platform ef-fects is to increase profits and market share and, these effects are also interdepen-dent [HU12]. The potential effects can be summarized under two headings: costadvantage and competitive advantages. Major cost reduction effects of product plat-forms include reducing production costs, reducing development costs, and reducingsales, marketing and service costs [Me97; RU98; Sa98; BEC09]. Effects of productplatforms like covering multiple market segments, covering global market, reducingproduct time to market, reducing customer lead time, increasing quality and decre-asing product investment costs help to increase competitive [Me97; RU98; Sa98;BEC09; MR00; Ch12]. However, there are also potential negative effects (risks) like146(architectural) innovation risk, platform obsolescence risk, investment risk and risksof too less distinctiveness of products ([ML97; HHV03; HH05]. Proactive measurecan help mitigating risks in product platform development [HU13].The effects of developing platform-based product families are dependent on thesituation [HHV03]. Several organizational factors have influence on product platformproject outcomes: managerial and architectural decision involvement of senior mana-gement, multifunctional platform team, cooperation among different units and know-ledge sharing [ML97; RU98; MR00; HHV03]. Ye et al. have identified in general fivecategories of factors which have impacts on the commonality and variety trade-off:(i) market, (ii) government/industry regulations and/or standards, (iii) product charac-teristics, (iv) life-cycle processes, and (v) organizational capabilities [Ye09]. On theotherhand, Martin and Ishii listed external factors which have an influence on theproduct platform performance like customer requirements, reduced prices and, re-gulations and standards [MI02]. Customer needs or preferences, price reduction orcompetitive price and regulations are other external factors that have influence onplatform development decisions [HHV03; Sa98; ML97].As we mentioned earlier, the decision is one of the key factors in projects whichhave impact on throughout the product platform life. So, taking an appropriate de-cision in a specific situations is crucial. Decisions like possible product variants orcomponents sharing are mentioned by [KU01]. The decisions in product platformprojects can be summarized under target market definition, product family definiti-on, product generations planning, market entry strategy, commonality strategy etc.[HY11].Product platforms can also be considered as resources. Using resource based viewand competency, Harland, Uddin & Laudien extend the idea of resource manage-ment and show how the product platform can be considered as an advanced re-source which can be bundled with other resources to build capability and to gaincompetitive advantage [HUL13].State of the ResearchThrough literature research the research gap was identified and later on researchcriteria (effects, factors and decisions) was explored. A content analysis approachwas considered during exploration of the criteria. Three papers were prepared andpresented in three international conferences focusing on effects, risks and resourcebased view of product platforms. Feedbacks from the conferences are taken intoconsideration and articles for journals are now in progress. Already a theoreticalWERKSTATT EUROPÄISCHEN DENKENS – 20 JAHRE IHI ZITTAU 147framework for the effects is developed showing how the effects are dependent oneach other and how they can bring competitive advantage.The developed framework of effects helped to reduce the number of effects from 27to a manageable number of 7 effects. Now a hypothesis based model is developedshowing the relationship between effects, decisions and market situations. Deve-lopment of the constructs as well as the questionnaire is in progress now. Next, asurvey is planned to collect data from industries. Industry types are also selectedbased on findings of the literature research: Transportation equipment manufacturer,Machinery manufacturer and computer and electronic product manufacturer [HU12].The survey is planned at project level and the participants will be R&D Manager,Product manager, Research engineer or nominated person involved in platform de-velopment project. Gathered data will be analysed with suitable statistical methods.Literaturverzeichnis[BEC09] Ben-Arieh, D; Easton, T; Choubey, A M. Solving the multiple platforms configurationproblem. International Journal of Production Research, 47(7):1969-1988, 2009.[CG02] Cusumano, M A; Gawer, A. The Elements of Platform Leadership. MIT Sloan Ma-nagement Review, 43(3):51-58, 2002.[Ch12] Chai, K; Wang, Q; Song, M; Halman, J I M; Brombacher, A C. Understanding Com-petencies in Platform-Based Product Development: Antecedents and Outcomes.Journal of Product Innovation Management, 29(3):452-472, 2012.[HHV03] Halman, J I M; Hofer, A P; Vuuren, W. Platform-Driven Development of ProductFamilies: Linking Theory with Practice. Jounal of Prod Innovation Management,20(2):149-162, 2003.[HU12] Harland, P E; Uddin, A H M Z. Product Platform Effects: A Literature-based ContentAnalysis. In Katzy, B; Holzmann, T; Sailer, K. (Eds.) Proceedings of the 18th Interna-tional Conference on Engineering, Technology and Innovation, Munich, 2012.[HU13] Harland, P E; Uddin, A H M Z. Risk Management in Product Platform DevelopmentProjects. In 20th International Product Development Management Conference, Pa-ris, 2013.[HUL13] Harland, P E; Uddin, A H M Z. Laudien; S M. Understanding the Nature of ProductPlatforms: A Resource-based Perspective. In 2013 IEEE International TechnologyManagement Conference & 19th ICE Conference, Hague, 2013.[HY11] Harland, P E; Yörür, H. Platform Variants Funnel: A Flexible Decision FrameworkAllowing Technical Uncertainty and Step-by-Step Customer Integration. In Seppä-nen, M; Mäkinen, S; Ortt, R J; Hosni, Y (Eds.): Proceedings of the 5th EuropeanConference on Management of Technology, p. 166-187, Tempere, 2011.[KU01] Krishnan, V; Ulrich, K. Product Development Decisions: A Review of the Literature.148Management Science, 47(1):1-21, 2001.[Mc95] McGrath, M. Product Strategy for High-Technology Companies. Irwin, New York,1995.[Me97] Meyer, M H. Revitalize your product lines through continuous platform renewal,Research-Technology Management, 40(2):17-28, 1997.[MI02] Martin, M V; Ishii, K. Design for variety: developing standardized and modulari-zed product platform architectures. Research in Engineering Design, 13(4):213-235,2002.[ML97] Meyer, M; Lehnerd, A. The Power of Product platforms. Building Value and CostLeadership. The Free Press, New York, 1997.[MR00] Muffatto, M; Roveda, M. Developing product platforms: analysis of the develop-ment process. Industrial Engineering, 20(11):617-630, 2000.[RU98] Robertson, D; Ulrich, K. Planning for product platforms. Sloan Management Re-view, 39(4):19-31, 1998.[Sa98] Sawhney, M S. Leveraged High-Variety Strategies: From Portfolio Thinking to Plat-form Thinking. Journal of the Academy of Marketing Science, 26(1):54-61, 1998.[Ye09] Ye, X; Thevenot, H J; Alizon, F; Gershenson, J K; Khadke, K; Simpson, T W; Shooter,S B. Using product family evaluation graphs in product family design. InternationalJournal of Production Research, 47(13):3559-3585, 2009.A.H.M. Zakir Uddin, M.Sc. is a research assistant and PhD can-didate at the International Institute Zittau (IHI Zittau) of the Techni-sche Universität Dresden. He holds a master’s degree in technolo-gy and innovation management from the Brandenburg Universityof Technology (BTU Cottbus, Germany). His research focusses onthe evaluation of product platforms with respect to their effectsand possible influencing factors.Dieser Beitrag ist erschienen in: Thorsten Claus und Niels Seidel (Hrsg.), Werkstatt europäi-schen Denkens – 20 Jahre Internationales Hochschulinstitut Zittau, TUDpress, Dresden, 2014.Online verfügbar: http://nbn-resolving.de/urn:nbn:de:bsz:14-qucosa-152408.WERKSTATT EUROPÄISCHEN DENKENS – 20 JAHRE IHI ZITTAU 149

http://tud.qucosa.de/api/qucosa%3A28292/attachment/ATT-0/

Product platforms: influencing factors and effects

Abstract

Similar works

Full text

Available Versions

HSSS - Hochschulschriftenserver der SLUB

Qucosa

Technische Universität Dresden: Qucosa