Product Platform - Definition & Meaning
What is Product Platform?
A product platform is a set of common elements like underlying technical components, parts or technology that are shared across a range of the company’s products. Also, new derivative products can be developed and launched by the company based on a common product platform.
Advantages of a product platform:
a. Increased speed in developing new products
b. Manufacturing can be flexibly adjusted to create new products
c. Reduced development costs
d. Ability to upgrade products easily
e. Reduce testing on new products as common components are used
Example:
Volkswagen used a common product platform in the 1999, which was shared across 19 car models developed under four brands: Audi, Skoda, Seat and Volkswagen. The platform consisted of the car floor system, the drive system and the gear system. Using this product platform approach, Volkswagen saved about $1.5 billion per year in product development and capital expenditure.
Another example is Hyundai, which uses its PB platform across three models namely the elite i20 hatchback, the Verna sedan and the new compact SUV Creta.
Disadvantages of a product platform:
a. Might lead to products, which are very similar to each other.
b. Commonality may tarnish brand image.
c. Product platform are highly costly to develop than a single product since a lot of research needs to be put into it.
Hence, this concludes the definition of Product Platform along with its overview.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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