Demand-Side Strategy, Relational Advantage and Partner-Driven Corporate Scope: The Case for Client-Led Diversification

Forthcoming, Strategic Management Journal

HEC Paris Research Paper, no. SPE-2018-1252

43 Pages Posted: 1 Mar 2018 Last revised: 20 Mar 2018

See all articles by John Mawdsley

John Mawdsley

Strategy & Business Policy, HEC Paris

Deepak Somaya

University of Illinois at Urbana-Champaign - Department of Business Administration

Date Written: February 19, 2018

Abstract

We advance research on corporate diversification by joining insights from the demand-side and relational views in strategy to offer a novel theory of client-led diversification. We propose that client-led diversification results from a combination of the customer-driven opportunities emphasized in the demand-side view and the creation of added value through relational assets that is a central tenet of the relational view. Furthermore, we hypothesize that suppliers’ client-specific knowledge, clients’ relational commitment to suppliers, and growth opportunities in clients’ markets (relative to the suppliers’ own markets) will magnify the client-led diversification effect. We test our hypotheses using a longitudinal dataset on patent law firms and their diversification into new domains of patent prosecution work for their corporate clients.

Suggested Citation

Mawdsley, John and Somaya, Deepak, Demand-Side Strategy, Relational Advantage and Partner-Driven Corporate Scope: The Case for Client-Led Diversification (February 19, 2018). Forthcoming, Strategic Management Journal, HEC Paris Research Paper, no. SPE-2018-1252, Available at SSRN: https://ssrn.com/abstract=3126422

John Mawdsley (Contact Author)

Strategy & Business Policy, HEC Paris ( email )

1 rue de la Liberation
Jouy-en-Josas Cedex, 78351
France

Deepak Somaya

University of Illinois at Urbana-Champaign - Department of Business Administration ( email )

1206 South Sixth Street
Champaign, IL 61820
United States

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