Corporate advantage in customer-centric diversification

What is it about?

Our theory explains how multi-product corporations that engage in customer-centric diversification can create and sustain corporate advantage. First, we invoke the concept of customer-centric assets to explain their role as the cornerstone of corporate advantage in customer-centric diversification. Second, our explanation of the corporate advantage in customer-centric diversification goes beyond the hypothetical ‘consumer synergies’ argument to also include the ‘market-power advantage’ argument. We explain the mechanisms employed by multi-product firms to share and/or leverage their customer-centric assets to create corporate advantage. Third, we explain how sustaining the corporate advantage so achieved requires the organizational-renewal activities to go beyond simply addressing the changing nature of the firm’s demand-side resource (i.e. customer-base) to manage revenue and/or profits.

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