The Role of Weak Ties in Diversification Strategy

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Author(s)

    • KONO Hideko
    • Graduate School of International Social Sciences, Yokohama National University

Abstract

This study provides an analysis of the successful diversification process from the perspective of "weak ties." Weak ties bring about new knowledge that does not overlap existing knowledge and are therefore useful to firms entering new markets. This study analyzes the diversification process using the example of Tokai Buhin Kogyo Co. Ltd., which successfully diversified from automobile components to medical equipment. The company's president initiated the formation of weak ties, which the company then developed into strong ties so that it could acquire the knowledge and competence needed for entering the medical equipment business. As a result, the company was able to successively overcome three types of critical obstacles—technological, regulatory, and market—to diversifying into the medical equipment business.

Journal

  • Annals of Business Administrative Science

    Annals of Business Administrative Science 15(3), 119-128, 2016

    Global Business Research Center

Codes

  • NII Article ID (NAID)
    130005158109
  • Text Lang
    ENG
  • ISSN
    1347-4464
  • Data Source
    J-STAGE 
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