strategy+business is published by PwC Strategy& LLC.
or, sign in with:
strategy and business
Published: February 26, 2008


Launch and Learn

The platform concept, although widely practiced in such industries as automotive and commercial aircraft, is less prevalent in food, software, and financial services. Yet the benefits of defining platforms and strategies in these “softer” product industries can prove just as valuable and lead to product extensions and efficiencies as well.

For example, Masterfoods, the McLean, Va., maker of candy, pet foods, and other products, applies platform logic to its products with a linkage to its manufacturing technologies. The company has used its proprietary technology for applying hard-shell coating to soft inner substances beyond the chocolate used in traditional M&Ms, including crisped rice, peanut butter, and the chewy center of Skittles. Product managers find that the platform is the most powerful organizational tool for ensuring order and efficiency in the product lines. All companies should think creatively about their definitions of product platforms and consider both physical and virtual platform models for product architecture.

Modules. A modular design philosophy, in which different products share common parts and specifications, complements the platform architecture by simplifying the process of creating variations of the common platform. Designers can bundle a set of product functions and features into a module with common interfaces that allow plug-and-play substitution. Often modules are used across many different product platforms. A block upgrade involves adding several new features to keep the product fresh and interesting while avoiding the cost and effort of a major redesign. Without block upgrades, development teams sometimes delay product creation projects in an attempt to get every possible feature into the current version under development. But with a planned block upgrade process, ideas that surface well into the current development cycle can be slated for inclusion in the first block upgrade after product launch. The use of modular designs can make the ongoing process of block upgrades even more seamless and efficient.

Modular designs, appealing as they may be, have a downside. They can force trade-offs and potentially generate a suboptimal design because of designers’ need to create and maintain clear interfaces with existing modules. For example, today most office copiers have modular designs, with different sorter and paper tray options depending on the customer’s needs. A more integral design (where components work well together but aren’t interchangeable with components of other devices) would lower the cost of the unit in isolation, but raise the cost across the full product line.

Despite the advantages gained from reduced complexity, excessively modular product architectures can eventually turn the end product into a commodity. When modules become completely interchangeable within an industry, the end-product assembler loses its market power and the suppliers of competitively advantaged components begin to accrue the majority of industry profits. This phenomenon can be seen quite clearly in the personal computer industry, where none of the major manufacturers except Dell make any significant profits, while “component” suppliers such as Microsoft and Intel reap large returns. Charles Fine of MIT argues that industries with excessively modular designs will ultimately revert to using integral designs for this reason.

Differentiators. The most successful adopters of modular design identify and continually innovate a set of differentiators, even as they standardize modules and employ platform architecture to reduce cost in areas of little importance to the consumer. Whirlpool uses the colorful term “the green line” to highlight the distinction between differentiators and less-critical product attributes. Features that consumers perceive and value reside in front of this imaginary green line. Those that customers do not perceive or value lie behind it. In a refrigerator, for example, the cooling system, insulation, and control system lie behind the green line. The aesthetic design, including interior shelves, drawers, and control features, remain in front of it. Whirlpool encourages its product teams to focus on controlling costs behind the green line and to marshall their creative efforts on new features in front of the line that might create competitive differentiation.

Follow Us 
Facebook Twitter LinkedIn Google Plus YouTube RSS strategy+business Digital and Mobile products App Store


Sign up to receive s+b newsletters and get a FREE Strategy eBook

You will initially receive up to two newsletters/week. You can unsubscribe from any newsletter by using the link found in each newsletter.