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Remark on ÜAppropriateness and Impact of Platform-Based Product DevelopmentÝ

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  • 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.

Suggested Citation

  • James D. Dana, 2003. "Remark on ÜAppropriateness and Impact of Platform-Based Product DevelopmentÝ," Management Science, INFORMS, vol. 49(9), pages 1264-1267, September.
    • Handle: RePEc:inm:ormnsc:v:49:y:2003:i:9:p:1264-1267
    DOI: 10.1287/mnsc.49.9.1264.16572
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    1. V. Krishnan & Saurabh Gupta, 2001. "Appropriateness and Impact of Platform-Based Product Development," Management Science, INFORMS, vol. 47(1), pages 52-68, January.
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    Cited by:

    1. Sanjiv Erat & Stylianos Kavadias & Cheryl Gaimon, 2013. "The Pitfalls of Subsystem Integration: When Less Is More," Management Science, INFORMS, vol. 59(3), pages 659-676, February.
    2. Tufano, Alessandro & Zuidwijk, Rob & Van Dalen, Jan, 2023. "The development of data-driven logistic platforms for barge transportation network under incomplete data," Omega, Elsevier, vol. 114(C).

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