Flevy Management Insights Q&A
How can businesses leverage platform strategy to enhance their product development process?


This article provides a detailed response to: How can businesses leverage platform strategy to enhance their product development process? For a comprehensive understanding of Platform Strategy, we also include relevant case studies for further reading and links to Platform Strategy best practice resources.

TLDR Leveraging Platform Strategy in Product Development accelerates innovation and scalability through Strategic Planning, Operational Excellence, and robust ecosystem management, demonstrated by successes like Apple's iOS, Google's Android, and Salesforce.

Reading time: 5 minutes

Before we begin, let's review some important management concepts, as they related to this question.

What does Platform Strategy mean?
What does Ecosystem Management mean?
What does Agile Methodologies mean?
What does Strategic Planning mean?


Platform strategy has emerged as a transformative approach for organizations looking to enhance their product development processes. By leveraging a platform-based approach, organizations can create value by facilitating interactions and transactions between different users, typically producers and consumers. This strategy not only accelerates innovation but also enables organizations to scale more efficiently and effectively. In the following sections, we will explore how organizations can leverage platform strategy to enhance their product development process, supported by real-world examples and authoritative statistics.

Understanding Platform Strategy in Product Development

At its core, a platform strategy involves developing a base of technology, services, or products upon which other parties can build or operate. This foundational platform serves as a springboard for innovation, allowing organizations to leverage external contributions for product development. According to Accenture, organizations that adopt platform strategies can reduce their product development cycles by up to 30%, highlighting the efficiency gains achievable through this approach. The key to leveraging platform strategy effectively in product development lies in understanding its three main components: the core platform, the participants (both producers and consumers), and the value exchanges between these participants.

Organizations must focus on creating a robust and scalable core platform that supports easy integration and interaction among users. This involves investing in technology infrastructure that is flexible, secure, and capable of handling large volumes of transactions and data. Furthermore, it requires a strategic approach to ecosystem management, ensuring that participants are engaged and that their contributions add value to the platform. By doing so, organizations can foster a vibrant ecosystem that continuously fuels innovation and product development.

Moreover, a successful platform strategy necessitates a shift in mindset from a traditional product-centric view to a platform-centric view. This means thinking beyond the boundaries of the organization and considering how external contributions can enhance product offerings. For instance, Apple's iOS platform exemplifies this approach by enabling developers to create apps that enrich the ecosystem, thereby driving the platform's value and appeal to end-users.

Are you familiar with Flevy? We are you shortcut to immediate value.
Flevy provides business best practices—the same as those produced by top-tier consulting firms and used by Fortune 100 companies. Our best practice business frameworks, financial models, and templates are of the same caliber as those produced by top-tier management consulting firms, like McKinsey, BCG, Bain, Deloitte, and Accenture. Most were developed by seasoned executives and consultants with 20+ years of experience.

Trusted by over 10,000+ Client Organizations
Since 2012, we have provided best practices to over 10,000 businesses and organizations of all sizes, from startups and small businesses to the Fortune 100, in over 130 countries.
AT&T GE Cisco Intel IBM Coke Dell Toyota HP Nike Samsung Microsoft Astrazeneca JP Morgan KPMG Walgreens Walmart 3M Kaiser Oracle SAP Google E&Y Volvo Bosch Merck Fedex Shell Amgen Eli Lilly Roche AIG Abbott Amazon PwC T-Mobile Broadcom Bayer Pearson Titleist ConEd Pfizer NTT Data Schwab

Strategic Planning and Execution for Platform-Driven Product Development

Strategic Planning is crucial for integrating platform strategy into the product development process. Organizations need to clearly define their platform's purpose, identify target user groups, and establish a value proposition that attracts participants to the platform. According to a report by McKinsey & Company, successful platforms focus on solving specific problems for their users, which in turn drives user engagement and participation. This problem-solving focus should be at the heart of the platform's strategic planning process.

Execution of a platform strategy requires meticulous operational planning and management. Organizations must develop capabilities for managing and supporting the ecosystem, including tools for monitoring, governance, and feedback mechanisms. This operational excellence ensures that the platform remains vibrant, secure, and conducive to innovation. For example, Amazon Web Services (AWS) provides extensive documentation, support, and community forums to assist developers in building on its platform, illustrating the importance of operational support in platform strategy.

Additionally, organizations should adopt agile methodologies in their product development processes to accommodate the dynamic nature of platform ecosystems. Agile practices allow for rapid iteration and adaptation based on user feedback and ecosystem changes. This flexibility is essential for leveraging the collective intelligence and innovation potential of the platform's community.

Real-World Examples of Successful Platform Strategy Implementation

Several leading organizations have successfully implemented platform strategies to enhance their product development processes. Google's Android operating system is a prime example. By creating an open platform that allows developers to build and distribute apps through the Google Play Store, Android has fostered a rich ecosystem of applications that enhance the user experience and drive device sales. This strategy has enabled Google to capture significant market share in the mobile operating system space.

Another example is Salesforce, which has built a comprehensive platform for customer relationship management (CRM). Through its AppExchange marketplace, Salesforce enables third-party developers to create and sell applications that extend the functionality of its CRM software. This approach not only enhances the product offering for end-users but also creates additional revenue streams for Salesforce and its ecosystem partners.

Lastly, Airbnb's platform strategy has revolutionized the hospitality industry by connecting hosts with guests looking for accommodations. By focusing on trust and community-building, Airbnb has created a platform that continuously evolves based on user feedback and contributions. This strategy has allowed Airbnb to rapidly expand its offerings and enter new markets around the world.

In conclusion, leveraging platform strategy in product development offers organizations a powerful way to innovate, scale, and remain competitive in today's fast-paced business environment. By focusing on strategic planning, operational excellence, and ecosystem management, organizations can harness the full potential of platform strategies to enhance their product development processes and achieve sustainable growth.

Best Practices in Platform Strategy

Here are best practices relevant to Platform Strategy from the Flevy Marketplace. View all our Platform Strategy materials here.

Did you know?
The average daily rate of a McKinsey consultant is $6,625 (not including expenses). The average price of a Flevy document is $65.

Explore all of our best practices in: Platform Strategy

Platform Strategy Case Studies

For a practical understanding of Platform Strategy, take a look at these case studies.

AgriTech Platform Strategy Revamp for Sustainable Growth

Scenario: The organization is a mid-sized AgriTech company specializing in precision agriculture solutions.

Read Full Case Study

Automotive Dealer Platform Strategy Reinvention in Luxury Segment

Scenario: A luxury automotive dealer network is facing challenges in maintaining competitive advantage in a rapidly evolving digital marketplace.

Read Full Case Study

Live Events Digital Platform Strategy for Entertainment Firm

Scenario: The company in question is a prominent player in the live events industry, specializing in large-scale entertainment productions.

Read Full Case Study

Platform Strategy Enhancement for Professional Services Firm

Scenario: A mid-size professional services firm specializing in financial advisory has encountered difficulties in leveraging its current platform to expand market reach and optimize internal collaboration.

Read Full Case Study

Platform Strategy Optimization for a High-Tech Global Manufacturing Company

Scenario: A globally operating high-tech manufacturing firm is facing challenges in leveraging its existing digital platforms for enhanced customer engagement and value creation.

Read Full Case Study

Direct-to-Consumer E-Commerce Strategy for a Sustainable Furniture Brand

Scenario: A rapidly growing direct-to-consumer (D2C) sustainable furniture brand faces significant challenges in scaling its platform strategy.

Read Full Case Study

Explore all Flevy Management Case Studies

Related Questions

Here are our additional questions you may be interested in.

How can companies identify and mitigate the risks associated with data privacy and security in their platform strategy?
Companies can mitigate data privacy and security risks in their platform strategy by understanding regulatory landscapes, implementing a robust Data Governance framework, leveraging advanced technology, and learning from real-world examples to build trust and ensure compliance. [Read full explanation]
How might the rise of decentralized finance (DeFi) platforms impact traditional financial ecosystems and their strategies?
DeFi platforms challenge Traditional Financial Ecosystems, prompting Strategic Reevaluation, Digital Transformation, and Innovation in banks and institutions for competitive adaptation. [Read full explanation]
What are the emerging trends in consumer privacy that affect platform strategy development?
Emerging trends in consumer privacy, including increased regulatory scrutiny, evolving consumer expectations, and technological innovations, are reshaping Platform Strategy Development, necessitating strategic foresight and prioritization of privacy and transparency. [Read full explanation]
What are the key elements of aligning platform strategy with overall digital transformation goals?
Aligning platform strategy with Digital Transformation goals involves understanding strategic objectives, leveraging platform capabilities like ecosystem interactions and network effects, and focusing on customer experience, operational efficiency, innovation, and Risk Management. [Read full explanation]
How does platform strategy enable digital transformation in traditional industries?
Platform strategy revolutionizes traditional industries by enabling Digital Transformation through ecosystem development, fostering innovation, and improving customer engagement, requiring a shift in business models and culture. [Read full explanation]
How can platform strategy accelerate go-to-market for new products and services?
Platform Strategy accelerates the go-to-market process for new products and services by leveraging existing networks, focusing on user experience, and promoting rapid scalability and market penetration through a digital ecosystem. [Read full explanation]

Source: Executive Q&A: Platform Strategy Questions, Flevy Management Insights, 2024


Flevy is the world's largest knowledge base of best practices.


Leverage the Experience of Experts.

Find documents of the same caliber as those used by top-tier consulting firms, like McKinsey, BCG, Bain, Deloitte, Accenture.

Download Immediately and Use.

Our PowerPoint presentations, Excel workbooks, and Word documents are completely customizable, including rebrandable.

Save Time, Effort, and Money.

Save yourself and your employees countless hours. Use that time to work on more value-added and fulfilling activities.




Read Customer Testimonials



Download our FREE Strategy & Transformation Framework Templates

Download our free compilation of 50+ Strategy & Transformation slides and templates. Frameworks include McKinsey 7-S Strategy Model, Balanced Scorecard, Disruptive Innovation, BCG Experience Curve, and many more.