Remark on “Appropriateness and Impact of Platform-Based Product Development”

When platform-based manufacturing exhibits overdesign costs then platform adoption will lead to a decrease in product line differentiation. In contrast, Krishnan and Gupta (2001) argued that in the presence of overdesign costs and platform economies, platform production always leads to a more differentiated product family. While Krishnan and Gupta analyzed one particular parameterized cost function and define overdesign costs and platform economies narrowly in terms of their parameters, I propose a general definition of overdesign costs and show that platform adoption reduces product differentiation for all cost functions satisfying this definition, regardless of whether or not they exhibit platform economies.

• 저널Management Science · 49(9) · 1264–1267
• 토픽Business Strategy and Innovation · Strategy and Management
• DOI10.1287/mnsc.49.9.1264.16572
• 저자J. D. Dana