Platform development: Implications for portfolio management

Abstract

The challenge of implementing industrial platforms in practice can be described as a configuration problem caused by a considerable number of variables, which often have contradictory influences on the total performance of the firm. Consequently, the specific platform decisions become extremely complex, possibly increasing the strategic risks for the firm. This paper reports preliminary findings on platform management process at LEGO, a Danish toy company. Specifically, we report the process of applying games combined with simulations and workshops in the platform development. We also propose a framework, based on the portfolio management thinking to evaluate the degree of modularity embedded in a given platform and to which extent it is aligned with other platforms.