What is platform thinking & how it differentiates Product Thinking

When it comes to generating and delivering value in the business world, especially in the context of technology and innovation, or any non-technology industry ,? platform thinking and product thinking are two distinct approaches. Each strategy has its own traits, objectives, and benefits. There could be ?two main ways of thinking about innovation and corporate strategy: product thinking and platform thinking.

Platform thinking is concerned with creating an ecosystem that enables the creation of numerous interrelated products and services, as opposed to product thinking, which is focused on developing stand-alone products. Depending on the objectives and environment of the business, either strategy may be successful.

Product Thinking:

Product thinking is concerned with developing and delivering a single, independent product that specifically addresses the demands and preferences of a target market. It's a linear strategy where the focus is on creating, producing, and selling a single product to take market share. Product thinking frequently exhibits the following traits:

Example of Product Thinking:

New Ray-Ban Meta Smart Glasses development is a recent illustration of product thinking. A ground-breaking Smart glass was created and released by RayBan and Meta with the goal of giving consumers the greatest AI-enabled new-generation product imaginable. They would undoubtedly want to usher in a new era of smart glasses, sell as many pairs as they can, and turn a profit on each one.

Platform Thinking:

Platform thinking, on the other hand, focuses on developing a technological ecosystem or infrastructure that enables diverse stakeholders, such as users and developers, to collaborate, build upon, and generate value in a more decentralized manner. It is a more comprehensive and long-term strategy that places an emphasis on laying the groundwork for a variety of goods and services to prosper. The following traits are typical of platform thinking:

Example of Platform Thinking:

One excellent illustration of platform thinking is DELL APEX CLOUD. DELL offers a complete cloud computing platform that consists of platform, infrastructure, and software services. On top of the DELL infrastructure or Dell Managed Services, it enables a wide range of businesses, startups, and developers to create and host their own apps and services. The complete ecosystem of services and users of the platform, rather than just a single device, is what makes Dell successful.

Differentiators

A strategic vision is a crucial component of any successful business or organization, and it serves as a guiding framework for achieving long-term goals and objectives. When it comes to platforms in various business contexts, such as product platform, customer platform, global platform, process platform, and brand platform, having a well-defined strategic vision is essential for creating and sustaining value. Here's how a strategic vision can be associated with each of these platforms, along with examples:

Product Platform:

Strategic Vision: To create a platform for a variety of complementary goods that will support innovation and cross-product synergy.

Example :-? Microsoft's Windows operating system is a product platform that has made it possible to produce a variety of software programs, resulting in the development of an ecosystem of products that includes Microsoft Office and third-party programs.

Customer Platform:

Strategic Vision: To build a customer platform that offers a seamless and personalized experience, cultivating customer loyalty and advocacy.

Example: Amazon's customer platform combines e-commerce, Prime membership, and Amazon Web Services (AWS) to offer a comprehensive and tailored experience, keeping customers engaged and loyal.

Global Platform:

Strategic Vision: To create a global platform that transcends borders, allowing businesses to expand internationally and tap into diverse markets.

Example: Trippin.com global platform connects travelers with accommodations worldwide, enabling hosts and guests from different countries to interact and conduct transactions on a global scale

Brand Platform:

Strategic Vision: To create a brand platform that communicates a consistent brand identity, values, and messaging, resonating with target audiences.

Benefits Of Platform Thinking

Speed, cost-effectiveness, design quality, coherence, reference ability, and option value are just a few advantages that platform thinking delivers in numerous business operations. Let's examine each of these advantages in greater depth and offer illustrations:

Speed: By utilizing existing infrastructure and components, platform thinking can shorten time-to-market and speed up product development.

Example: Apple's iOS platform allows developers to create apps more quickly by providing a standardized development environment and tools, resulting in a vast and rapidly growing app ecosystem.

Cost Efficiency: Platforms enable cost savings through economies of scale and shared resources, reducing overall development and operational costs.

Example: Amazon Web Services (AWS) offers cloud computing services that allow businesses to scale their infrastructure as needed, paying only for the resources used, which can be more cost-effective than maintaining on-premises data centers.

Design Quality: Platform thinking encourages the creation of standardized, high-quality components and interfaces, ensuring consistency and reliability across products and services.

Example: The Material Design framework by Google provides design guidelines and UI components that help developers create visually appealing and user-friendly applications across different devices and platforms.

Coherence: Platforms promote consistency in user experiences, branding, and messaging, leading to a coherent and unified presence in the market.

Example: Starbucks maintains a consistent brand and customer experience across its global chain of coffee shops, ensuring that customers receive the same quality and service regardless of location.

Referenceability: A well-established platform can serve as a reference point and benchmark for industry standards, attracting partners and customers.

Example: Salesforce's cloud-based CRM platform is widely recognized and used by numerous businesses, making it a reference point for customer relationship management best practices.

Option Value: Platforms create opportunities for future growth and adaptation, allowing organizations to pivot, expand, and explore new revenue streams.

Example: Facebook, initially a social networking platform, expanded its ecosystem to include Instagram and WhatsApp, demonstrating the option value of its platform strategy and diversifying its offerings.