Does Product Platforming Pay Off?

Product platforminga specific approach to new product development utilizing common technology components or subsystems deployed across multiple products or product lineshas been argued to bring numerous valuable organizational outcomes (e.g., effectiveness of R&D process, superior postlaunch product commercial performance, and ultimately sustained competitive advantage). Yet, large-scale longitudinal empirical examinations of the mechanisms linking product platforming to firm performance are scarce. Drawing on the concepts of architectural leverage and product life cycle flexibility, the article presents the development and empirical test of a set of hypotheses regarding the commercial outcomes of platforming at the product level using a unique dataset comprising all products developed and sold by a large, global LED lighting manufacturer in 2010-2015. The results suggest that platformed products demonstrate significantly higher sales and gross profit margins aggregated over their product life cycle (PLC), vis-a-vis the comparable group of nonplatformed, individually developed products. In addition, the findings demonstrate that a product platforming development approach appears to extend the PLC relative to nonplatformed products based on an integral, nonmodular product architecture.