Week 4 27th October 2009

Workshop Octoplause
This document has been produced by Group 6, Octoplause, in
preparation for the Week 4 workshop. The main content relates to our
evolving understanding of ‘Dominant design’ and ‘Product Platform’.
PART I

What is a dominant design?

Following the definition by Utterback, ‘a dominant design in a product class is, by definition, the one
that wins the allegiance of the market place, the one that competitors and innovators must adhere
to if they hope to command significant market following. The dominant design usually takes the
form of a new product (or set of features) synthesised from individual technological innovations
introduced independently in prior product variants’. (Utterback, 1996) Dominant design is basically
a standard. It defines what a product is and what its core features are. (Constantinos & Paul, 2004)

For us, a dominant design does not have to be a specific product (e.g. Microsoft Windows (Net
Applications, 2009) or VHS (Owen, 2005) ) but can be a more abstract term which can also
encompass ‘blueprints’ such as toilets, relational databases or the human race, in addition to
processes like mass production (Cowan,1984) and indeed paradigms like mathematics and language
(Wolfram,2009). This is why we consider design dominance in terms of object, process, paradigm
and place. They each can have designs which (for whatever reason) become accepted, dominant
standards that evolve to penetrate particular populations and contexts."

One of the reasons dominant designs become so dominant is that they often kick off feedback loops
and chain reactions which act as catalysts for the emergence of new markets. To paraphrase an
example put forwards by Markides and Geroski (Constantinos & Paul, 2004), designs that start to
dominate begin to take advantage of economies of scale and travel down learning curves which
means that the cost of both owning and using a particular design begins to fall. Those savings can in
turn be levered to make the design more attractive to investors and, perhaps most importantly, the
market place. One of the most dramatic examples of this actually happening is that of Henry Ford,
who by 1916 was selling cars at $360 each. Compared to the thousands of dollars asked for by
competitors, it is easy to see why both, the cars design and his assembly line production methods,
became so popular (Brinkley, 2003) (Constantinos & Paul, 2004).

Dominant designs can be born out of competition. The text-book case is the story of VHS vs.
Betamax,( where an objectively inferior product became a dominant design through clever
marketing and business strategy (Owen, 2005)), which is actually a great example as well for
showing, that innovation is not just about product design but much more competencies involved.
That said, dominant designs can also be born out of lack of compeition. For example, in 1987,
United States Patent 5,579,430 was filed describing a "digital encoding process" or what we know
today as the MP3. By the time the time personal computer technology had caught up, the spacious
walkmans and CD players had finished saturating their markets, the background work done on the
MP3 standard meant that they were an attractive and logical next step in meeting the demand for
digital music distribution. As a group, we feel that the forces pulling at the digital media industry
(FOSS, DRM, artists rights, cost, distribution etc) will make for a very interesting future for this
particular design.
What forces lead some designs to become the standard for a category of
product?
Considering that there are a massive number of product categories and an even larger number of
dynamically changing market forces and conditions for them to exist in, people have found it difficult
to pin down generic forces and place them into a ‘how to make your design diffuse to dominance’
model for everyone to follow. Indeed, this is reflected in the academic literature; where Chandler
(Background Synthesis, 2009)argues that change is driven by the ‘best’ (cheap, faster, efficient)
technologies available while conversely Hughes (Background Synthesis, 2009)would argue that prior
affecters (innovations) in the social structure surrounding the design claim higher importance.
Utterback states, that the interplay between technical and market choices at any particular time,
collateral assets, industry regulation and government intervention, strategic manoeuvring by
individual firms and communication between producers and users are the greatest factors.
(Utterback, 1996)

To offer a more grounded answer (focusing on dominant product designs) we offer the following
cases:

Assembly Line Mass Production and competition – An example of a dominant design is the
process innovation that was pioneered by Henry Ford at the start of the 1900’s (Background
Synthesis, 2009). By creating a way to produce his products (cars) as quickly and as cheaply
as possible, he levered open a crevice that exposed a much wider market. Once that market
was available, anybody who wanted to compete with Henry Ford found they couldn’t do so
without adopting his methods; thus setting a dominant process design.
Microsoft Windows and public perception – In a nutshell, the popularisation of Windows
and the subsequent success of Microsoft can be largely attributed to them treating the
computer as a tool. By treating it as a tool, they were able to create software for common
individual needs (for example, word processing and accountancy) which no other platforms
offered. So in one sense, it was a solution looking for a problem: “why do I need a computer
to do what I have done for years?” but the media, environment and common perception of
the computer meant that it was taken up and used Microsoft as the platform of choice.

It is important to note that a dominant design is not static; rather it is fluid and continues to evolve
in response to:

What is needed and what is possible in terms of new features, contexts and market
segments. For example; a change of geographical market could force a redesign to cope
with hot weather.
The desire for control over the design (Background Synthesis, 2009);
Compatibility with legacy technology, process and paradigm.

Two examples of previously dominant designs which have failed to remain dominant are VHS and
horse-drawn carriage. These are both technological examples and thus subject to the force of
replacement and new technologies offering a ‘better’ (in which ever way) solution. However, an
important consideration for the replacement technologies is that the involved companies either
force the switch by levering social capital (i.e. making deals with publishers) or they must bet on
potential customers realising a higher utility going with the replacement technology; an approach
which rarely works because they are relying on the technological need being strong enough to
warrant change.

What are the difficulties associated with the process?

One big difficulty in ‘creating’ a dominant design, is that competition forces hurries decision-making.
Markides and Geroski (Constantinos & Paul, 2004) describe a great ‘rush’ of innovators seeking to
capitalize on applications for emerging science or technology without thinking about details and
resolving potential issues. With a big potential of a technology, competitors create a huge number
(often in the hundreds) of potential ‘dominant designs’. This ‘supply-push process’ (Constantinos &
Paul, 2004) forces innovators to make educated guesses about what they think people want and
need. Sometimes, it is much easier to be first, in the case of becoming the dominant design,
because there are certain ‘first-mover advantages’ (Constantinos & Paul, 2004) e.g. more
experience in later stages, which subsequent competitors will have to overcome, should they
succeed in supplanting the original innovation. On the other hand, while a product or technology is
analysed, competitors might have ‘the’ idea to improve the technology, while the original innovator
might be worried about changing his product too much and risking to lose potential customers.

Also, the more complex the technology, the more complex is the process of manufacturing a product
based on this technology. So for some innovations, a substantial hurdle to becoming the dominant
design is actually understanding the science or technology and not being afraid of putting it into
practice.

In order to become the dominant design, innovators must develop an infrastructure to support their
innovation. What is particularly challenging, though, is that other competitors can easily free ride
off of this infrastructure, which generally involves a great financial investment on the part of the
pioneering company, so this financial investment might be all for naught should other companies
swoop in with slightly more appealing products built off the platform set by the pioneers.

A somewhat less obvious difficulty facing innovators is negotiating the innovators’ expectations.
Enormous publicity can “exaggerate the appeal of the new market out of all proportion”
(Constantinos & Paul, 2004), as was the case of the Dot Com boom, which ended in most cases in
failure.

What uncertainties do manufacturers face?

Possibly the biggest question mark facing product and service design is ‘What people want’.
Inventors might think about products, which are not available, but are not needed – or which are
needed but not (yet) wanted, as it was the case for early fuel-efficient or even electric cars.
Consumers do not always know what they want, and generally, what is needed, wanted and
(especially for reasonable prices) possible is just in a small number of cases aligned. And to add
another factor of uncertainty, there might be quick changes in technologies and markets, which are
sometimes unpredictable.
It might also be important for manufacturers to push their innovation as close to the limits of
possibility as possible. Unfortunately, innovators always have to trade off between price and
technological possibilities – and competitors will always try to fill the one or the other gap, trying to
create products or services that are more appealing to consumers. There might also be strategic
moves from competitors to drive the innovator out of business, e.g. with lobbyism and political
influence. Potential investors might also start up their own business manufacturing the same
product, if the innovation is easy to copy.
Also, there is a learning curve for consumers, which presents some initial limits for manufacturers.
But at the same time, consumers can push the limits. It is very difficult to foresee how consumers
will use products (e.g. people trying to dry their pets in microwaves), as they can be very creative
and use products in radical ways, thus trying pushing the boundaries of possibilities of applications
of an innovation.
A major manufacturing issue has to do with figuring out how to manufacture in an efficient way.
When innovators blaze a trail, initial manufacturing is highly inefficient, but it just becomes a big
issue, if these kinks cannot be worked out over time.

How are consumers affected while the standard is emerging?

The ultimate goal of launching innovations into the market is to win preferences of consumers and
earn profit. The diffusion of the innovation might take quite a long time, according to what we
learned last session, and during this time consumers are influenced by other consumers’ experiences
and network effects (Wikipedia), lobbyism and political statements, other innovations and price
changes of substitutes and finally their learning curve.

Network effects and reaching a critical mass within an adopter population are special key landmarks
on the path to design dominance. Such a critical mass characterises several trends within the
consumer market; gentle learning curves, economies of scale, peer adoption that leads to micro
standardisation and availability expectations (e.g. If all friends in a group use Facebook then they
each look there for social media updates there, rather than on MySpace). All of these things affect
the consumer perception of the product, which as Hughes (Background Synthesis,2009)argues is one
of the most important factors in the emergence of a dominant design.

Considering Roger’s adopter categories mapped onto a normal distribution reflecting diffusion.
While the following are a small subset of the possible examples, they serve to paint a picture of

Innovators – This is the stage where consumers don’t necessarily understand nor have the
ability to articulate their needs. The innovator (or inventor) at this stage offers a solution
and begins the process of diffusion through the market. As such the consumers start to be
exposed to the innovation. At this stage the consumers don’t know that the innovation will
become a standard, but take the risk by adopting it.
Early Adopters – Primary consumers who normally operate within the domain make a
judicious decision to adopt the innovation and have the opportunity to, thorough their
 usage, begin to describe and shape the future of the design. For example; the adoption of
the MP3 standard in the design and popularisation of the MPEG codec’s.
Early Majority – Secondary consumers who utilise tools within the domain follow the
previous consumers willingly once the attractiveness of the innovation increases as their
concerns and risks decrease. Furthermore these consumers can start to take advantage of
fast-second alternatives on the market and all the fluidity and differentiation in the design
they start to add (Constantinos & Paul, 2004). Experiences from early adopters and first
network effects usually play a role for the early majority and are even more important for
the following.
Late Majority – The late majority have a certain amount of scepticism which starts to be
alleviated as the design tends towards a standard and the global maximum of the diffusion
curve is reached. They can capitalise on the interest in the area and, depending on the
market, this does have the potential to increase costs but equally there is greater support
and usage which means the risk is usually much lower.
Laggards – By the time the laggards are all but captured, the design is firmly a standard and
the design is starting to branch and evolve around the central blueprint. The traditionalist
laggards are sometimes faced with an ‘adopt or die’ situation. For example; the threat of
online competition to small independent booksellers means that they have in some cases
had to, unwillingly, register as vendors with larger sites like Amazon.com so that they can
keep up sales figures that would have otherwise been completely lost to the online medium.

The process of a design becoming established as dominant is a complex self-feeding process. The
effect on consumers is also inextricably related to the social and business structures which have
formed around them; consumers tending to convert each other (sometimes inadvertently through
competition) or directly by placing mandates upon suppliers or customers.

How do firms compete once a dominant design is established?

Once a dominant design is established, competition is about differentiation around the dominant
design. Organisations would pay attention to the packaging of products, enhanced or improved
functionality, prices, brand and values (e.g. bottled water called One, whose profit goes to a charity).
Also substitutes, building on other technology and providing a higher overall utility, with the purpose
of creating a new dominant design, will be considered.

For first movers, one of the most powerful advantages is a brand. Markides and Geroski
(Constantinos & Paul, 2004) put it well when they say that “the producer who created the market
[has] reputation heritage open to no other, later-moving player.”

The following is a breakdown of classes of innovation in different areas which highlights certain
aspects of the effect of having a dominant design in each one:

Competitors to Microsoft Windows usually compete by offering a unique selling point which
Windows does not offer; for example an all-in-one package with a design focus (Apple) or an
open ended platform targeted mainly at expert users (Linux). Whereas easy-to-built features
can be copied quite easily (if not protected or protectable with a patent), others, which
involve a lot of technological knowledge, require more effort to copy or imitate.
A new process is difficult to protect, if these cannot be hidden from insight, and maintain
control of on the path to design dominance without taking out an expensive patent which
 must be protected in different countries. This can be a problem for firms with a smaller cash
capital; for them, it makes sense to keep the process a trade secret which means it is difficult
to externally capitalise on the advantages of the process.
Dominant designs don’t always have to remain dominant. Often the replacements to
dominant designs are due to new technologies which reveal new possibilities.

How do dominant designs shift through time?

At first, many innovations are ‘rushed’ to the market to ‘see if it flies’ (Constantinos & Paul, 2004).
Some will ‘fly better than others, and a process of consolidation occurs as various competitors’.
Variation, feature enhancement and improvement as well as technology changes will be performed
in a search for the optimal design and best market position. New ways of using the products and
again adaption to the customers’ feedback will change the design again.

This is a period of refinement. User testing once the product is already in the market makes it easier
to see what it is about the product, which people really do want and need (and what not). So while
the first wave of innovation is a guess at consumer tastes, once the product is in the market,
innovators can begin to get a more informed sense of how to adapt their designs to make them
more appealing.

In this process, technological and scientific progress never stops. Markides and Geroski
(Constantinos & Paul, 2004) discuss the development of competitors for X-rays, including nuclear
medical imaging, ultrasound, CT scanners, MRIs, and digital radiography. To remain competitive,
innovators need to incorporate new technology into the existing idea. An example of this would be
the Model T car, which became the dominant design which set many features that we still use today
as ‘standard’, though new advances like air bags were eventually included as luxuries and then
eventually were incorporated into the new dominant design as standard in any car.

‘Non-flying’ ideas die off; this is described as a “shakeout” (Constantinos & Paul, 2004). If a design
becomes dominant, especially as the infrastructure built to support it takes off and network effects
set in.

What factors might disrupt the status quo in an established sector?

The most important factor maybe the incorporation of new technologies (or research in general) and
innovations in the established sector, for example the introducing of ERP systems within companies
to cut costs, improve processes, etc. Those who aren’t successful in reshaping their business
structures would face heavy losses.

The second factor is government intervention. Government now plays a crucial role in economy.
Industries which the government is in favour of would get incentives to grow quickly and vice versa.
For instance, Chinese government is encouraging the development of information industry these
days and allows companies to have the privilege of tax-free. But also legal changes (e.g. data
protection rights) and cultural changes (e.g. people stopping to go to church on Sundays) can disrupt
the status quo.
Third, the power of mass media is also unforgettable when discussing this question. The
development of fast-food is largely influenced by the widespread reports and articles about causing
obesity, diabetes and other health problems.

Fourth, acts of nature beyond control, or even slow climate changes, can influence a sector.

How might this affect established firms?

Established firms often have a vested interest in “strangling *new ideas+ at birth” (Constantinos &
Paul, 2004), since they threaten their own company’s success. However, there are some times
“when it becomes clear that displacement will occur” (Constantinos & Paul, 2004), in which case it is
important for companies to think on their feet and adapt to change.
It is important for companies to develop product variants that take into account different needs of a
range of consumers and be aware of current changes and disruptions in their business sector, to
‘grab’ opportunities at the right point of time. This means making a major financial investment,
what Markides and Geroski call “bet the company choices”, one highly successful example of which
would be Microsoft’s Windows operating system. The benefit of taking these risks is that it can
potentially lead to a new batch of consumers, people who may not have initially been interested in
the product but who are now because it better suits their needs, or because of network effects (and
the sheer success of the product) they are forced to adopt it.

PART II

What is a product platform?

The Business Dictionary 2009 defines a product platform as a set of subsystems and interfaces that
form a common structure from which a stream of derivative products can be efficiently developed
and produced. Common design, formula, or a versatile product, based on which a family (line) of
products is built over time.
Thus, product platform is very important strategic decision while developing new product, as it
simplifies the product strategy process. Leveraging the platform as foundation does not necessarily
reduces product development and manufacturing costs at the beginning, when setting it up, but
gives huge advantages when other people are ‘innovating’ for you or on your platform.

Robertson and Ulrich state: “Effective planning for product platforms allows a company to deliver
distinctive products to the market while conserving development and production resources”.
(Robertson & Ulrich, 1998)

A good example of a service platform would be Facebook: a collection of service subscribers (users)
to which the platform owners (Facebook) can disseminate incremental services to for little cost. In
the case of Facebook, there is a strong argument that it is also a dominant design - most competing
social networks such as MySpace and to some extent, Twitter, copy features of the site such as social
feeds and social congregation points which encourage discourse.
An example of a platform architecture used in the Background Synthesis is that of the original HP
Deskjet printer:

1. Mechanical elements (drive chain, chassis)

2. Electronics (computer chip and memory)
3. Software (embedded software on the printer and driver software on the computer).

Mike identifies 6 strategic advantages to using a product platform.

Summarise the benefits to the company, within the supply chain and to
customers in your own words.
SUPPLY

The standardization of the platform in its architecture and components improves factory
performance, especially in a cross cultural outsourced manufacturing environment (Mike's example
about Chinese producers). Innovation from suppliers, become an asset for the company, (example
innovation of Duomat). With a high quality of products and incremental enhancements, the
customer can utilize the platform even more. Customers are able to get the products available
locally, because of the strong supply chain.

INNOVATION
Innovation within a particular product assembly cascades into the wide product family. External
innovation (from suppliers) is also encouraged. Customer's also get the freedom to suggest their
ideas and get a customized product in the end.
SALES/MARKETING
A trusted brand is created for the customer. The features accepted in one product get accepted in
the other products within the product family.(Background Synthesis, 2009). Also the sub-assemblies
like Doumat which is embedded in the pack itself accelerate the recognition at shop
level. (Background Synthesis, 2009)

PROTECTION FROM PREDATORS

The patents in the sub-assemblies make the products more competitive. The new players can get
into the market when there is a complete technology change (Background Synthesis, 2009). The
customer gets to use the latest technology (because of patents) in the wide product range.
PROFITABILITY
Product innovation helps in negotiating with the factory while buying units for different products
from the same product line. As for factory suppliers, they view as different products but for
manufacturers they all are the same. Products are priced competitively, which allows the customer
to make a cost effective choice.
PLATFORM EXTENSIONS
The product platform gives a sound base for platform innovation. Taking an OMM example, the
Duomat which is sold as an accessory for the pack, became a product itself. Product platform gives
the brand to develop into an international brand and dominate the market even after several
manufacturing technology changes. Products are usually easy to copy while product platforms are
not. Having a platform is therefore an excellent form of self protection. (Background Synthesis,
2009)

How does platform innovation help him segment the market? Combine the
above with the product section of Mike's website to identify who are the
users.
Platform innovation enables a business to cater to needs of different customers. A business needs
to clearly define the product platform comprising of various sub systems. This further requires
mapping to the market segment along with a classification of (Good, Better, Best and NA).
According to Marc H Meyer and Paul C Mugge, the platform-market segmentation map helps
executives to integrate platform technologies with the needs of different customer groups.

Considering the pack range of OMM a variety of packs are available which target different set of
activities (segments). A mapping for the “pack” products and its market segmentation is given
below.

The
Villian Jirishanca Classic Classic
Mountain 45 + 10 35RL Marathon Marathon Adventure The Last
Pack Range Mover 55-15L RL MSC MSC 25L 32L Light 20L Drop 10L

Fell Running NA NA Good Good Good Better Best

Trail running NA NA Good Better Better Best Best

2 day mountain
marathons Good Better Best Best Best Best Good

Adventure racing Best Best Best NA NA Best Best

Day walks Good Better Better NA NA Best Best

Long distance
walking Best Best Best NA NA NA Best

Weekend/Ultra
light backpacking Best Best Best NA NA Best Best

Expedition/Travel Best Best Best NA NA Best Best

Ski touring Best Best Best NA NA Better NA
 Via
ferratta/scrambling Better Best Best NA NA Best Better
Cragging Better Best Best NA NA Good Good

Mountaineering Better Best Best NA NA Good Good

Cycling/MTB NA NA Good NA NA NA Best

Figure 1

So if we consider the market segment of “Two day Mountain Marathon”, “Fell Running” and “Trail
Running” we get the results as shown in bar graph (Figure 2). This suggests that “The Last Drop 10L is
the best for fell running and trail running”. Such market segmentation can be utilized while planning
sales and marketing of products.

Figure 2

These packs also include accessories like Duomat (Foldable sleeping mat for dual use as both
sleeping mat and pack back system cushioning (The Original Mountain Marathon, 2009)). This is an
example of platform innovation.

How does using platform innovation reduce the time it takes to get an
innovation to market?
A product platform establishes the cost structure, potential capabilities and differentiation for
subsequent products built upon. It simplifies greatly the product strategy process. Based on a
common platform, new products are implemented with different features and for specific market
segments and distribution channels, but can reuse existing processes and innovate on other
products. This lends itself better to incremental as opposed to radical innovations. Without an
established platform, all the channels such as production, marketing, brand penetration and so on
would have to be built up from scratch and would consume more time.

The common platform enables company to develop several products over platform life cycle without
making frequent changes. Leveraging the platform also reduces cost of development and
manufacturing.

Why do you think using platform innovation helps in brand recognition?

When platforms are complied they can supplement a brand by communicating a house-style to
consumers. Similarly, as there are differences in platforms targeting different consumers, there are
also different ways in which a platform can be altered in order to appeal to a certain segment of the
market. A good technological example of this is the business model adopted by many open-source
vendors who offer their software for free, but also offer a supported version for commercial
situations which require reliability or indeed setup and consultancy. (OpenSource Strategies)

Another good example of how platform innovation has help brand recognition is the iPhone. Coming
from the success of iPod(the base product), iPhone was built and the sales record was huge. The
iPhone has brought together various applications under one phone offering variety to its users.

The easyGroup, who own the easy brand, promise their customers value and simplicity. They have
extended these different industries. They have products like easyjet, easyCar easyInternetcafe,
easyMoney.

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