TIER-1 Platform Strategies: Coinnovations, Risks, and Contract Structure
Abstract and keywords
Abstract (English):
The Tier 1 supplier platform strategy moves the business from a “part according to the technical specification” to a portfolio of reusable modules and software with over-the-air updates (OTA). The economics are based on scaling in the product lifecycle management (PLM), limited customization and hybrid monetization “supply + license”. Joint development with the original equipment manufacturer (OEM) is recorded in the JDA/SOW (joint development agreement/statement of work) with the distribution of intellectual property rights (IP), data access rules and source code escrow. Contracts are reinforced by SLA/SLO (service level agreement/service level objective), volume options, take-or-pay and gain-share/pain-share schemes. Change-order discipline restrains NRE (non-recurring engineering). As a result, the platform becomes a predictable asset: the speed of feature delivery and quality are converted into margins with controlled supply and cybersecurity risks.

Keywords:
Tier-1, platform strategy, coinnovation, OEM, PLM, JDA, SOW, OTA, SLA, SLO, NRE, licensing, take-or-pay, volume options, gain-share/pain-share, IP, source code escrow, cybersecurity
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References

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