Remark on ÜAppropriateness and Impact of Platform-Based Product DevelopmentÝ
AbstractWhen 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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Bibliographic InfoArticle provided by INFORMS in its journal Management Science.
Volume (Year): 49 (2003)
Issue (Month): 9 (September)
Product Differentiation; Product Development; Platform Production; Product Line;
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