Product Family Design: Strategic Principles to Choose Between Product-Driven and Platform-Driven Processes
The development process is a key aspect of ultimate product success. The front-end of the development activity is the foundation for building new products by first gathering customers’ needs, identifying the company’s goals, and assessing the competitive landscape. By doing so, this crucial activity directly impacts eventual development cost, which includes engineering resources, manufacturing, etc. In this paper, we study a specific design approach, namely, product family design, which allows companies to increase revenue by developing an entire family of products targeting different market segments while reducing lead-time and manufacturing costs. However, there is a significant amount of risk given the costs of developing complex shared architectures, and there are many examples from industry where product families have failed. Thus, the development stage is critical, and a well-structured development strategy can bring success while a poor one can cause significant problems during product launch, as recent case studies illustrate. In this platform-based study, we assess two drivers of this product family design: (1) a platform-driven strategy and (2) a product-driven strategy. Three facets are examined: the product, the company, and the competition. The goal is to recommend a planning framework to aid companies in selecting the right process considering their product, strategy, and environment.