In 1987, Fuji introduced the QuickSnap 35mm single-use camera in the U.S. market. Kodak, which did not have a comparable product of its own, was caught unprepared in a market that was destined to grow by more than 50 percent per year for the next eight years, from 3 million units in 1988 to 43 million in 1994. By the time Kodak introduced its first model almost a year later, Fuji had already developed a second model, the QuickSnap Flash. Yet Kodak won market share back from Fuji; by 1994, Kodak had captured more than 70 percent of the U.S. market.
The success of Kodak’s response resulted in part from its strategy of developing many distinctively different models from a common platform. Between April 1989 and July 1990, Kodak redesigned its base model and introduced three additional models, all having common components and common production process steps.1 Because Kodak designed its four products to share components and process steps, it was able to develop its products faster and more cheaply. The different models appealed to different customer segments and gave Kodak twice as many products as Fuji, allowing it to capture precious retail space and garner substantial market share.
The platform approach to product development is an important success factor in many markets. By sharing components and production processes across a platform of products, companies can develop differentiated products efficiently, increase the flexibility and responsiveness of their manufacturing processes, and take market share away from competitors that develop only one product at a time. For example, in the auto industry, firms taking a platform approach enjoyed market share gains of 5.1 percent per year, while firms pursuing a single-model approach lost 2.2 percent market share per year.2
The platform approach is also a way to achieve successful mass customization — the manufacture of products in high volumes that are tailored to meet the needs of individual customers.3 It allows highly differentiated products to be delivered to the market without consuming excessive resources.
In this article, we define what we mean by a platform, describing the benefits and challenges of platform planning. We articulate three ideas underlying the platform approach to product development and present a method for planning a new platform of products. Finally, we provide recommendations for managing the platform-planning process.
Fundamentals of Platform Planning
Platform planning poses both opportunities and difficulties for companies.