Product Platform Strategy

Companies develop products using raw materials and labor in order to sell these items to consumers for a profit. Business owners and managers will often develop product strategies to help them achieve these goals and objectives. Product platform strategies present new opportunities for companies to advance their company's consumer products.

Defined

Business Dictionary defines product platform as the "common design, formula, or a versatile product, based on which a family (line) of products is built over time." The auto industry is a classic example of product platform. They typically build vehicles using similar parts or structural materials to reduce costs.

Example

Industries outside of the automotive industry also use product platform strategies. For example, companies that make hair dryers often make a wide variety of products using similar materials but with different features. Products may promote different features such as ceramic, tourmaline, cord-keeper units, wattage or heat settings, yet use the same basic parts: heating unit, fan, switches and plastic casing.

Purpose

The goal or product platform strategies are to achieve an economy of scale. This results in the most products---or widest variety---being produced at the lowest possible cost. Companies producing products using similar inputs can achieve this by not reinventing the wheel with every product they release.

References

• Business Dictionary: Product Platform
• Working Wider: The Attractive Platform Strategy of Facebook, Amazon and Apple