Understanding Competencies in Platform‐Based Product Development: Antecedents and Outcomes

Abstract

While previous studies have shed light on the benefits and antecedents of platform‐based product development, there is still much to be learned on the subject, particularly through an empirical approach. Based on the literature, this study proposes the concept of product platform competency and identifies four antecedents related to the development process, knowledge sharing, and the organization of development. The study hypothesizes that such competency directly affects the performance of platform‐based product development. To test these hypotheses, a large‐scale survey was conducted in the United States with 242 firms. The study found empirical evidence to support the existence of the concept of product platform competency, which comprises the reusability of subsystems, the compatibility of subsystem interfaces, and the extensibility of platform‐based products. The results show that a formalized development process, knowledge sharing across platform‐based products, continuity of platform‐based product development teams, and the existence of a champion in platform‐based product development will significantly enhance product platform competency. More interestingly, the results show that factors which have a significant effect on platform development cost are statistically different from those that have a significant effect on platform development time. For example, while formalized product development process and continuity of development team play a very significant role in shortening development time, they are less crucial in reducing development costs. In contrast, the presence of a product champion is a significant factor in achieving cost efficiency, but it has relatively lower impact on development time. Knowledge sharing was found to affect both development time and cost. In sum, this study makes three main contributions to the existing literature. The first contribution is the empirical‐tested concept of product platform competence based on key elements suggested by Robertson and Ulrich. The second contribution is the development of constructs specifically for platform development based on previous studies. Relating to this is the third contribution: the development and validation of measurement items related to key drivers to platform development, the three aspects of platform development competence, and the performance measurements. These measurement items can be used by practitioners as guidelines to identify areas for improvement as well as the level of capability in platform development.