Platform Leadership: How Intel, Microsoft, and Cisco Drive Industry Innovation
By Annabelle Gawer and Michael Cusumano
Platform leadership, according to the authors, is the Holy Grail of high-tech industries. Many strive for it, but few succeed. Platform leadership is what companies like Intel (microprocessors), Microsoft (software), Cisco (networking) have managed to achieve. The book also discusses platform strategies used by Palm, Linux and NTT Docomo.
Gawer and Cusumano discuss four levers of platform leadership: scope of the firm, product technology, relationships with external complementors and internal organisation. Write the authors:
By definition, platform leaders who succeed can exert a strong influence over the direction of innovation in their industries and thus over the network of firms and customers their ecosystem that produces and uses complements. The dynamics that makes platform leadership possible occur only in certain conditions. A fundamental condition is that the firms product has limited value when used alone but gains in value when used along with its complements. For Intel, the starting point was recognizing that, without innovation on complements and evolution of the PC platform, its main product line the microprocessor would have very limited appeal.
The realization that demand for ones core product depends on an array of complements and therefore, that ones destiny depends on decisions and actions of others is the starting point for thinking like a platform leader. Platform leadership, combined with complementary innovation, can result in win-win scenarios for the platform leader, complementors and customers, if everyone works together.
The essence of platform leadership begins with a vision that extends well beyond the business operations of one product or one component. It is a vision that says the whole of the ecosystem can be greater than the sum of its parts, if forms work together and follow a leader.
Product Strategy for High Technology Companies
By Michael McGrath
McGraths book talks about high-tech product strategy. In a sense, it complements the Platform Leadership book, and at the same time presents a much wider framework on creating a product strategy. The four building blocks for product strategy are:
1. Core Strategic Vision (CSV), which is about answering questions like: where do we want to go, how will we get there, why will we be successful
2. Product Platform Strategy, which defines the cost structures, capabilities and differentiation of the resulting products
3. Product Line Strategy, which defines the specific product offerings for a particular product platform, along with a time-line
4. New Product Development, which defines the specific functionality for each new product offering
Derived from these building blocks is the Market Product Platform (MPP), which enables companies to transform platform strategy into a practicable attack plan for a target market.
Three other related books on innovation and high-tech marketing:
Tomorrow: The Story of Entrepreneurs