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Remark on ÜAppropriateness and Impact of Platform-Based Product DevelopmentÝ

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Author Info

  • James D. Dana

    ()
    (Department of Management and Strategy, Kellogg School of Management, Northwestern University, Evanston, Illinois 60208-2028)

Abstract

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.

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File URL: http://dx.doi.org/10.1287/mnsc.49.9.1264.16572
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Bibliographic Info

Article provided by INFORMS in its journal Management Science.

Volume (Year): 49 (2003)
Issue (Month): 9 (September)
Pages: 1264-1267

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Handle: RePEc:inm:ormnsc:v:49:y:2003:i:9:p:1264-1267

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Keywords: Product Differentiation; Product Development; Platform Production; Product Line;

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