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Commercialization of IP: Product Offering Architecture
What choices should you offer your customers and which ones shouldn’t you?
The answer to this question has profound consequences for business strategy, product design, marketing, and pricing, not to mention product adoption.
Product Offering Architecture (POA) is a rational framework for making decisions related to the design of product offerings, with an emphasis on the cost to both companies and consumers of providing multiple options, features and choices.
POA is based on MPD’s extensive field research on product offerings, business models, and pricing in diverse industries and draws on theoretical work on bundling, versioning, and other aspects of product architecture. Although related to the literature on product bundling, it differs dramatically from previous thinking.
POA outlines 4 basic strategies that determine how the total costs of making alternative product offerings, including how the costs to consumers of added choice impact the overall profitability of the product offer. POA principles, therefore, enable companies to increase long-run profits, identify viable product innovations and avoid disruptive competition.
For platform-based businesses, we know that product design can drive success or failure. The challenge is to compel distinct groups of customers to interact with each other and not just transact individually with the catalyst. The trick is not only to design it well but also create the incentives that make it easy to get all sides engaged and on board.
MPD's Core Expertise:
- B2C marketing strategy
- Quantitative analysis
- Consumer behavior/predictive modeling
- Customer and channel development
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What is POA and how can it help companies monetize their IP?
One important aspect of getting products to market is balancing the wants of the buyer with the costs of choice.
Product Offering Architecture (POA) is based on extensive field research on product offerings, business models, and pricing
in diverse industries and draws on theoretical work on bundling, versioning, and other aspects of product architecture.
It is based in part on very recent empirical and theoretical research that has been published by MPD's David Evans in the Yale Journal of Regulation.
POA also is the topic of a new report from MPD, forthcoming this Winter in MIT's Sloan Management Review.
Preview it or contact us for a copy of the full report.
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