Paper summary by Leo Gomes “Koufteros, X., Vonderembse, M., Jayaram, J., 2005, Internal and External Integration for Product Development: The Contingency Effects of Uncertainty, Equivocality, and Platform Strategy, Decision Sciences, Vol. 36 No. 1 pp 97-133”

1. June, 2015
Paper’s summary
Internal and External Integration for
Product Development: The Contingency
Effects of Uncertainty, Equivocality, and
Platform Strategy
Based on the paper “Koufteros, X., Vonderembse, M., Jayaram, J., 2005, Internal and External Integration for Product Development: The Contingency
Effects of Uncertainty, Equivocality, and Platform Strategy, Decision Sciences, Vol. 36 No. 1 pp 97-133”
Leonardo Laranjeira Gomes
PhD Student
MIT-Zaragoza International Logistics Program
Zaragoza Logistics Center

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Overview: a contingent SEM approach on the relationships between NPD
integration, competitive capabilities, and profitability
Highlights
•The relationship between internal integration, external integration, and competitive capabilities
• Internal integration: concurrent engineering practices
• External integration: customer integration and supplier integration
• Competitive capabilities: product innovation and quality performances
•The contingency effects of:
• Uncertainty and equivocality in the environment
• Platform development strategy
•The approach:
• Survey with 224 manufacturing firms
• Structural equation modeling (SEM)
• Test for moderation
•Key findings:
• NPD integration positively influences product innovation and quality performances (and
ultimately profitability)
• Equivocality moderates these relationships
Source: Koufteros et al., 2005, Leo Gomes’ elaboration

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Contents
1. Introduction
2. Theory development
3. Methods
4. Results
5. Conclusions, contributions and discussion
6. Personal opinion

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Contents
1. Introduction
2. Theory development
3. Methods
4. Results
5. Conclusions, contributions and discussion
6. Personal opinion

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NPD is a key strategic activity, yet it often fails; moreover, findings from
previous research in the field are paradoxical...
Previous literature on new product development (NPD) vs. performance
Source: Koufteros et al., 2005, Leo Gomes’ elaboration
A consistent finding: the lack of a robust theory that explains the patters in the findings
Author(s) Year(s) Topic General Idea
Cooper
Cooper and Edgett
1990
2003
NPD
failure
• Average failure rate: 35-40%
- Top performers: 20.5%
Montoya-Weiss & Calantone
Brown & Eisenhardt
Kessler & Chakarabarti
1994
1995
1996
Meta-
analytic
NPD
• Interdisciplinary studies
• Paradoxical findings on NPD performance
- Relationships and impacts
Henard & Szymanzki 2001
Directions
for future
research
• Call for the seek for the key drivers of NPD
performance
• Suggest for examining the contingency effects
Gerwin & Barrowman 2002
Integrated
NPD
• Points out contingency variables that could
explain the paradoxical findings

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… this research seeks to address this gap by offering a contingency view
of the effects of integration in NPD performance
Research objectives:
• Test how integration strategy influences performance in the context of NPD
• Evaluate the moderating impact of uncertainty, equivocality, and platform strategies
Research questions:
• Does a high level of internal integration lead to a higher level of external integration?
• Do certain contextual variables moderate the linkages between integration and performance?
Key variables:
• Integration:
- Internal integration: concurrent engineering practices
- External integration: customer integration and supplier (product and process) integration
• Performance:
- Competitive capabilities: product innovation and quality performances
- Profitability, as an ultimate goal
• Contextual variables:
• Uncertainty and equivocality in the environment
• Platform development strategy
Source: Koufteros et al., 2005, Leo Gomes’ elaboration

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Contents
1. Introduction
2. Theory development
3. Methods
4. Results
5. Conclusions, contributions and discussion
6. Personal opinion

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Successful firms structure cross-functional and/or boundary spanning
teams early in the product development efforts…
Source: Koufteros et al., 2005, Leo Gomes’ elaboration
Literature on NPD integration and uncertainty
Author(s) Year(s) Topic General Idea
Liker et al.
Hartley et al.
1996
1997
Integrated
NPD
• Successful firms involve important constituents early in the
product development effort
Droge et al. 2000
NPD
automotive
• Cross- functional and boundary spanning improves
time-to-market and performance
Burns & Stalker
Lawrence & Lorch
Huber, et al.
Huber & Daft
1961
1967
1975
1987
Adaptation
to
uncertainty
• Environmental uncertainty and ambiguity have an
important influence in structuring an organization
Daft and Lengel 1986
Uncertainty
reduction
• To reduce uncertainty, the organization needs to process
more information
• Information processing involves cross-functional
activities
Gupta et al. 1986
Uncertainty
NPD
• Uncertainty increases the need of interconnected NPD
…and the importance of integration seems to be increasing on uncertainty

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The study posits internal integration as a precursor of external
integration, which is expected to influence competitive capabilities…
Source: Koufteros et al., 2005, Leo Gomes’ elaboration
… and suggests that there may be contingency variables that affect these relationships
• Concurrent engineering represents
internal integration (Langowitz, 1988;
Barkan, 1992; Millson et al., 1992)
• Internal integration facilitates external
integration
• External integration can impact
innovation speed and frequency by
facilitating coordination with boundary
groups (Parthasarthy and Hammond,
2002)
• Supplier integration involves two
separate constructs: product and process
integration
• Contingency variables may affect these
relationships (Galbraith, 1973)
Hypothesized structure model (adapted from the authors)The view behind the model
Concurrent
eng.
Customer
integration
Product
integration
Process
integration
Product
innovation
Profitab.
Quality
Supplier
Internal
integration
External
integration
Competitive
capabilities
1
2
3
4
5
Contingencies
• Uncertainty and
Equivocality
• Platform strategy 7
6

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Contents
1. Introduction
2. Theory development
3. Methods
• Research design and sample characteristics
• Measurement and structural model methods
4. Results
5. Conclusions, contributions and discussion
6. Personal opinion

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The development of the survey measurement model involved multiple
rounds of interviews with practitioners and a pre-test
Steps on the development of the measurement model
1. Structured interviews with 10 practitioners for the generation of the construct’s items
2. Evaluation of the items by 14 practitioners (engineering and PD) and faculty from 3 universities
(manufacturing management, engineering, marketing, and IT)
3. Preliminary assessment test of measurement properties with 34 firms
• All Cronbach’s alpha > 0.8
• EFA for testing unidimensionality
4. Development of survey items (32 items, mixed through the instrument):
• Concurrent engineering: 10 items
• Customer integration: 4 items
• Supplier product integration: 3 items
• Supplier process integration: 3 items
• Product innovation: 4 items
• Quality: 7 items
• Profitability: 1 item
Source: Koufteros et al., 2005, Leo Gomes’ elaboration
Five-point Likert-scale measuring the extent
to which a practice is used by the firm
(1= not at all,...,5=a great deal)
Seven-point Likert-scale comparing the firm
with the average of the industry
(1= much below,...,7=much above)

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List of survey items
Latent variables Items
Concurrent engineering
X1. Much of process design is done concurrently with product design
X2. Product development activities are concurrent
X3. Product development group members share information
X4. Product development group members trust each other
X5. Product development employees work as a team
X6. Product development group members seek integrative solutions
X7. Purchasing managers are involved from the early stages of product development
X8. Process engineers are involved from the early stages of product development
X9. Manufacturing is involved from the early stages of product development
X10. Various disciplines are involved in product development from the early stages
Customer integration
X11. In developing the product concept, we listen to our customer needs
X12. We visit our customers to discuss product development issues
X13. We study how our customers use our products
X14. Our product development people meet with customers
Supplier product integration
X15. Our suppliers do the product engineering of component parts for us
X16. Our suppliers develop component parts for us
X17. Our suppliers develop whole subassemblies for us
Supplier process integration
X18. Our suppliers are involved in the early stages of product development
X19. We ask our suppliers for their input on the design of component parts
X20. We make use of supplier expertise in the development of our products
Product innovation
X21. Our capability of developing unique features is
X22. Our capability of developing new product and features is
X23. Our capability of developing a number of new features is
X24. Our capability of developing a number of new products is
Quality
X25. Our capability of offering products that function according to customer needs over a reasonable lifetime is
X26. Our capability of offering a high value product to the customers is
X27. Our capability of offering safe-to-use products that meet customer needs is
X28. Our capability of offering reliable products that meet customer needs is
X29. Our capability of offering durable products that meet customer needs is
X30. Our capability of offering quality products that meet customer expectations is
X31. Our capability of offering high performance products that meet customer needs is
Profitability X32. What is your profitability relative to the average in the industry
Source: adapted from Koufteros et al., 2005

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Survey application and responses’ profile
The Society of Manufacturing Engineers (SME) supported the survey,
which target 2,5k manufacturing execs. and obtained 10% response rate
Source: Koufteros et al., 2005, Leo Gomes’ elaboration
• Mailing list and logistical support from SME
• Executives from 2,500 discrete-part manufacturing firms
(>100 employees)
• Four SIC codes (key segments in much of the reported
manufacturing research)
• 2-weeks pre-notification (traditional mail, letter from SME)
• 253 responses (244 usable): 10% response rate
• Chi-square test shows good fit with population (p>.527)
• Most companies < 500 employees: even CEOs would have
knowledge on NPD practices
Survey application
SIC 34:
Fabricated
metal
35%
SIC 35:
Machinery
30%
SIC 37:
Transport.
equip.
15%
SIC 36:
Electronics
12%
Misc.
8%
By SIC code
VP
31%
Manager
19%President/C
EO
12%
Director
11%
Misc.
27%
By position
100-499
69%
500-999
16%
1000+
15%
By company size
(employees)

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The researchers tested the measurement model prior to the structural
model. CFA and several fit measures were also employed
Fit tests employed for the measurement and structural model
• Confirmatory Factor Analysis (CFA): maximum likelihood estimation on a covariance matrix,
using the entire set simultaneously
• Convergent validity: significance of individual item loading though t tests
• Overall fit: chi-square to degrees of freedom
• Misspecification analysis: completely standardized expected change in Λx (potential cross
loading) with cut-off value 0.4
• Discriminant validity: comparing average variance extracted (AVE) with squared correlation
between constructs (or confidence intervals)
• Other methods employed:
• Nonnormed fit index (NNFI)
• Comparative fit index (CFI)
• Parsimony goodness-of-fit index (PGFI)
• Standardized RMR
• Root mean square error of approximation (RMSEA)
Source: Koufteros et al., 2005, Leo Gomes’ elaboration
The hypothesized relationships was evaluated by the structural model. If a model fits the
data, t-values of structural coefficients (γ and β) can be used to test the hypothesis

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To assess the role of uncertainty, equivocality, and platform strategy, the
study tested the model for moderator effects
Method employed for testing the model for moderator effects: Test measurement invariance, in
terms of loadings matrices, then assess invariance for the path coefficients
1. Establish two groups for each of the three moderators: low and high uncertainty
- Mean score on the respective moderator scale
2. Test for measurement and structural coefficient invariance
- Baseline model with two groups (model 1)
- Impose equality constraints on both the λx and λy matrices (model 2)
- Impose equality constraints on θε and θδ (model 3)
- Impose equality constraints on γ and β (model 4)
Evaluation
• Non-significant difference in chi-square between models can indicate that the structural models
do not differ
• If there is a significant difference in chi-square, then a search for identifying which particular
coefficients differ takes place
Note: measures of uncertainty, equivocality, and platform strategy appear to be unidimensional and
have satisfactory Chonbach’s alpha
Source: Koufteros et al., 2005, Leo Gomes’ elaboration

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Contents
1. Introduction
2. Theory development
3. Methods
4. Results
• Measurement model
• Structural model
• Contingency effects
5. Conclusions, contributions and discussion
6. Personal opinion

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The measurement model appears to be supported by various fit indices,
which supports the study to move on to the structural model and HT
Results for the fit indices on the measurement model
• Chi-square: 802.75 (444 df)
• Chi-square / df = 1.81
• CFI: 0.94
• NNFI: 0.93
• PGFI: 0.70
• PNFI: 0.79
• Standardized RMR: 0.48
• RMSEA: 0.58
• All of the items have significant relationships with their factors: all factor loading above 0.63
and most above 0.8
• t-values significant at 0.001
• None of the completely standardized expected changes in Λx were greater than 0.40
• Composite reliabilities and AVE estimates for each construct exceed customary acceptable
levels
Source: Koufteros et al., 2005, Leo Gomes’ elaboration

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Completely standardized loading and t-values of survey items (n=244)
Latent
variables
Items
Completely std.
loadings
t-values
Concurrent
engineering
X1. Much of process design is done concurrently with product design .82 ∗ –∗
X2. Product development activities are concurrent .89 17.57
X3. Product development group members share information .72 12.71
X4. Product development group members trust each other .74 13.28
X5. Product development employees work as a team .87 17.00
X6. Product development group members seek integrative solutions .83 15.73
X7. Purchasing managers are involved from the early stages of product development .67 11.58
X8. Process engineers are involved from the early stages of product development .72 12.82
X9. Manufacturing is involved from the early stages of product development .86 16.66
X10. Various disciplines are involved in product development from the early stages .82 15.55
Customer
integration
X11. In developing the product concept, we listen to our customer needs .82 ∗ –∗
X12. We visit our customers to discuss product development issues .78 13.62
X13. We study how our customers use our products .78 13.62
X14. Our product development people meet with customers .81 14.43
Supplier
product
integration
X15. Our suppliers do the product engineering of component parts for us .82 –∗
X16. Our suppliers develop component parts for us .88 14.90
X17. Our suppliers develop whole subassemblies for us .68 11.09
Supplier
process
integration
X18. Our suppliers are involved in the early stages of product development .85 –∗
X19. We ask our suppliers for their input on the design of component parts .87 17.24
X20. We make use of supplier expertise in the development of our products .84 16.16
Product
innovation
X21. Our capability of developing unique features is .67 -
X22. Our capability of developing new product and features is .82 11.33
X23. Our capability of developing a number of new features is .91 12.24
X24. Our capability of developing a number of new products is .84 11.58
Quality
X25. Our capability of offering products that function according to customer needs over a reasonable lifetime is .63 –∗
X26. Our capability of offering a high value product to the customers is .71 9.44
X27. Our capability of offering safe-to-use products that meet customer needs is .79 10.30
X28. Our capability of offering reliable products that meet customer needs is .87 11.00
X29. Our capability of offering durable products that meet customer needs is .81 10.50
X30. Our capability of offering quality products that meet customer expectations is .85 10.82
X31. Our capability of offering high performance products that meet customer needs is .86 10.93
Profitability X32. What is your profitability relative to the average in the industry 1.0 –∗
Note: * indicates a parameter fixed at 1 in the original solution.
Fit indices: Chi-square = 802.75 (p=.00), 444 df, chi-square/df = 1.81, NNFI=.93, CFI=.94, PGFI=.70, PNFI=.79, std. RMR=.048, RMSEA=.058
Source: adapted from Koufteros et al., 2005

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Descriptive statistics, correlations, composite reliability, and discriminant validity (n = 244)
Source: Koufteros et al., 2005

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Internal integration positively affects external integration and, indirectly,
profitability; yet, questions arise from non-signif. and neg. relationships
Source: Koufteros et al., 2005; Leo Gomes’ elaboration
Negative relationships suggest that assigning product development responsibilities to
suppliers may affect the firm’s ability to innovate
• Concurrent engineering is
positively associated with
external integration, but is
weaker on prod. Integration
• Significant impacts of customer
integration and supplier product
integration on product
innovation
• Product integration leads to
process integration
• Product innovation impacts
profitability, mediated by quality
• Supplier product integration
negatively impacts innovation
and, ultimately, profits
Hypothesized structural model results (adapted from the authors) Comments
Concurrent
eng.
Customer
integration
Supplier
product
integration
Supplier
process
integration
Product
innovation
Profitab.
Quality
Internal
integration
External integration Competitive
capabilities
H1,
t=12.1
H2,
t=6.5
H3,
t=8.21
H4,
t=4.43
H5, t=1.94
H7,
t=-2.36
H8, t=1.31
H9,
t=1.44
H10,
t=-1.48
H11, t=7.21
H12, t=4.86
H6, t=9.49

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Summary table of structural model across environments (standardized coefficients)
Source: Koufteros et al., 2005

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Contingency effects: uncertainty does not play a significant moderating
role on the model hypothesized…
Invariance tests across uncertainty environments: hypothesis 13
Analysis of Δchi-square to Δdf:
• Model 2: no significant difference on chi-square. This implies loadings equivalence
• Model 3: significant difference. Errors are not invariant between high and low uncertainty
• Model 4: no significant difference in the overall model (including path coefficients)
Source: Koufteros et al., 2005; Leo Gomes’ elaboration
…therefore, hypothesis 13 was rejected

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Contingency effects: equivocality plays a moderating role on some of the
constructs in the model hypothesized
Invariance tests across uncertainty environments: hypothesis 14
Source: Koufteros et al., 2005; Leo Gomes’ elaboration

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Graphical representation of the moderating effects of equivocality
Source: Koufteros et al., 2005; Leo Gomes’ elaboration
High equivocalityLow equivocality
Concurrent
eng.
Customer
integration
Product
integration
Process
integration
Product
innovation
Profitab.
Quality
Internal
integration
External
integration
Competitive
capabilities
Concurrent
eng.
Customer
integration
Product
integration
Process
integration
Product
innovation
Profitab.
Quality
Internal
integration
External
integration
Competitive
capabilities
t=9.37
5.45
t=5.44
t=1.57
t=1.65
t=-2.57
t=-0.9
t=2.32
t=0.48
t=5.85
t=3.96
t=10.07
3.44
t=6.79
t=4.88
t=1.93
t=-0.6
t=3.31
t=-.08
t=-2.95
t=4.84
t=2.89
t=7.76 t=6.7
Impact of
supplier
integration
Equivocality level
Low High
Product
Process
I
Q
I
Q
Q
Q
I
I

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Contingency effects: platform strategy does not play a significant
moderating role on the model hypothesized…
Invariance tests across uncertainty environments: hypothesis 15
Analysis of Δchi-square to Δdf:
• Model 2: significant difference on chi-square. This implies that loadings are not equivalent
between the two groups
• Model 3: significant difference. Errors terms are different between the two groups
• Model 4: no significant difference in the overall model (including path coefficients)
Source: Koufteros et al., 2005; Leo Gomes’ elaboration
…therefore, hypothesis 15 is not supported

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Contents
1. Introduction
2. Theory development
3. Methods
4. Results
5. Conclusions, contributions and discussion
6. Personal opinion

27. Page - 27 -
Conclusion: firms should pursue product integration in high equivocality
environments and process integration in low equivocality environments
• Internal integration is an important enabler of external integration (customer and supplier)
- External integration probably would not be realized in the absence of internal integration
• Internal integration also leads to higher levels of competitive capabilities
• Significant indirect effects of internal integration on innovation (t=5.35) and quality (t=4.63)
• Customer integration appears to be vital for product innovation, especially in high equivocality
• Contrary to expectations, customer integration is not directly associated with quality (but it is
mediated by innovation)
• The effects of suppliers integration on competitive capabilities are mixed:
- Supplier integration may have a negative impact on product development, particularly in
uncertain environments (Eisenhardt and Tabrizi’s, 1995)
- The use of outside suppliers increases the organizational complexity of coordinating
design decisions (Liker et al., 1996)
- There might be regional differences. “Japanese companies have a comparatively long
history of assigning greater responsibility for product development” (Ibid)
• While equivocality may be important in understanding the relationship between integration and
performance, uncertainty and platform strategy does not appear to moderate the relationships
Source: Koufteros et al., 2005; Leo Gomes’ elaboration

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The research also contributes to literature and methodology. Its major
limitations lie on the sample source and risk of common method bias
Contributions:
1. Includes internal and external integration variables in the same study (a rare feature)
- How internal and external integration strategies affect each other as well as performance
2. Includes both customer and supplier integration as a manifestation of external integration
- Previous literature focused on either supplier or customer
3. Examines the impact of contextual environmental variables as moderators
4. Employs SEM to accommodate moderators
- Goes beyond the prototypical assessment of a measurement and structural model via SEM
Limitations:
• Single respondents per company (but uses the ‘most knowledgeable’ respondent)
• Uses perceptual measures for both endogenous and exogenous variables (by the same
individual) can lead to common method bias
Source: Koufteros et al., 2005; Leo Gomes’ elaboration

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Future research: include other variables and moderators
• Include other variables:
- The employment of IT as a tool for NPD activities (communication and integration)
- Assess the level of proficiency with integration practices are carried out
• Include other moderators:
- Small firms: more informal approaches and practices in their NPD efforts?
- The employment of IT as a tool for NPD activities (e.g. communication, integration, virtual
prototyping)
- Assess the level of proficiency with integration practices are carried out
- Life cycle and country of origin effects (e.g. US vs Europe vs Japan)
Source: Koufteros et al., 2005; Leo Gomes’ elaboration

30. Page - 30 -
Contents
1. Introduction
2. Theory development
3. Methods
4. Results
5. Conclusions, contributions and discussion
6. Personal opinion

31. Page - 31 -
Personal opinion
• Very insightful study
• Well structured research method:
• Well constructed a priori theory
• Combination of internal and external, customer and supplier integration
• SEM with moderation
• However:
• Survey items seems subjective
• Sample: 27% of respondents from “miscellaneous” levels
• Only members of the Society of Manufacturing Engineers
• Suggestion of extension:
• Combine survey with secondary data (e.g. profitability)
• Multi-continent international project, moderating for countries
• Control for company sizes and position in the supply chain
Source: Koufteros et al., 2005; Leo Gomes’ elaboration

32. Page - 32 -
Backup slides

33. Page - 33 -
Internal integration: concurrent engineering
• Early involvement of a cross functional team in a process to plan product design, process design,
and manufacturing activities simultaneously
• It may afford a firm a stream of integrative innovations that improve the value of products to
customers, enhance quality, shorten time-to-market, and reduce cost
• With early release of information, engineers can begin working on different phases of the projet
• Early detection of problems
• Enacts a shared team vision and improves product development success
• The logic for internal integration is equally relevant for integrating activities with external entities
• Internal integration may affect external integration
• Hypotheses:
- H1: concurrent engineering is positively associated with customer integration
- H2: concurrent engineering is positively associated with supplier product integration
- H3: concurrent engineering is positively associated with supplier process integration
Source: Koufteros et al., 2005; Leo Gomes’ elaboration
1

34. Page - 34 -
Customer integration
• Involves determining customer requirements and tailoring internal activities to meet these
requirements
• Customer have a vested interest in product development
• Ensures that customers’ voice will be heard and their recommendations and suggestions are
incorporated in the design of new products
• Useful to customers for planning purposes
• Hypotheses:
- H4: customer integration is positively associated with product innovation performance
- H5: customer integration is positively associated with product quality performance
Source: Koufteros et al., 2005; Leo Gomes’ elaboration
2

35. Page - 35 -
Supplier integration
• Lead suppliers to operate as strategic collaborators
• Black box: suppliers carry out product engineering activities on behalf of their customers and
even develop components of entire subassemblies. This is called supplier product integration
• Gray box: supplier’s engineers work alongside the customer’s engineers to jointly design the
product so the supplier’s process can be effectively integrated with the design. This is called
supplier process integration
• Hypotheses:
- H6: supplier product integration is positively associates with supplier process integration
- H7: supplier product integration is positively associates with product innovation
performance
- H8: supplier product integration is positively associates with product quality performance
- H9: supplier process integration is positively associates with product innovation
performance
- H10: supplier process integration is positively associates with product quality performance
Source: Koufteros et al., 2005; Leo Gomes’ elaboration
3

36. Page - 36 -
Product innovation
• The capability of organizations to introduce new products and features
• Fosters organizational learning and enables time-to-market to be shortened even further
• Because of frequent innovation, products closely match current customer demands
• Design or quality deficiency can be overcome quickly, resulting in more satisfied customers
• Hypothesis:
- H11: product innovation is positively associated with quality performance
Source: Koufteros et al., 2005; Leo Gomes’ elaboration
4

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Quality
• Quality from the customers’ perspective
• The capability of the firm to design and produce products that would fulfill customer expectations
• Quality is posited to affect profitability, which is used as a firm performance measure
• Hypothesis:
- H12: quality performance is positively associated with profitability
Source: Koufteros et al., 2005; Leo Gomes’ elaboration
5

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Impact of uncertainty and equivocality on the adoption of integrated
product development practices
Uncertainty
• Rapid change in the external environment promotes uncertainty in product development
• The presence of environmental hostility magnifies the positive influence of NPD activities on new
product success (Cantalone et al. 1997)
Equivocality
• The presence of multiple and conflicting interpretations about a phenomenon
• Confusion stems from the presence of complexity
• Firms that can cope with higher levels of equivocality are in a sense creating structural
mechanisms internally and externally to provide consistency in interpretations
Hypothesis
• H13: uncertainty in the environment will have a differential impact on the path coefficients of the
model
• H14: equivocality in the environment will have a differential impact on the path coefficients of the
model
Source: Koufteros et al., 2005; Leo Gomes’ elaboration
6

39. Page - 39 -
Impact of platform strategy on the structural relationships
• A dominant product design that forms the basis for all future extensions of the product within
the same product family
• Leads to efficiency, lower costs, higher quality, and faster time-to market
• Planning multiple generations
• Product changes can be made quickly because technical and marketing uncertainties are lower
• Technical learning that is transferable to new design cycles
• Reduce typical start-up uncertainty and confusion
• Hypothesis:
- H15: the use of platform strategies will have a differential impact on the path coefficients of
the model
Source: Koufteros et al., 2005; Leo Gomes’ elaboration
7

40. Page - 40 -
Measures of uncertainty, equivocality, and platform strategy(1/2)
Source: Koufteros et al., 2005

41. Page - 41 -
Measures of uncertainty, equivocality, and platform strategy(2/2)
Source: Koufteros et al., 2005