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Abstract. Component-based software engineering (CBSE) is being accepted as an effective paradigm for building software systems with reusable components. Product line software engineering (PLSE) is an approach that utilizes CBSE principles to support the economic development of several applications in a domain. Hence, the components should conform to relevant domain standards and they must at least provide common functionality of the domain. Moreover, micro-level variability within commonality should also be modeled in components so that a product member-specific business logic or requirement can be supported through component tailoring or customization. Therefore, the degree of commonality and customizability determines the range of component applicability. In this paper, we propose a systematic approach to identify and model commonality and variability (C&V) and present a methodology to reason about the identified C&V model. With the proposed process and guidelines, components in a product line can better support a larger set of family applications.