The final growth principle is to create a platform to scale. Platforms enable growth by allowing multiple entities to contribute to your success.
Concept:
Create a platform to scale the value you offer customers and clients. Consider the following examples:
- Product Pyramid Platform – Toyota Industries.
If there are large variations in your customers’ income and preferences, build a product pyramid. At the base there are low-price, high-volume products. At the apex are high-price, low-volume products. Toyota has four brand levels: a) Toyota for entry to high-end; b) Daihatsu for trucks and off-road vehicles; c) Lexus for luxury cars; and d) Century for ultra luxury vehicles. - Switchboard Platform – Amazon, eBay.
Create a platform that allows multiple sellers to communicate with multiple buyers. The switchboard reduces the costs for both buyers and sellers by creating a single and/or simplified contact channel. - Installed Base Platform – Xfinity, Apple.
If your product or service has slim margins, but opportunities to sell follow-on services or products, focus on building the largest installed base. Additional value does not have to come directly from you if you profit from the sale.
To learn more about this approach I highly recommend the classis book The Profit Zone by Slywotzky, Morrison and Andelman.
Reflection:
Are you building a platform for your organization that will deliver long-term success?
Action Step:
Brainstorm ways you can dramatically increase your customer base, connect your customers with other organizations to meet their needs, and get others to offer value-added extensions to your products or services.
