Annals of Business Administrative Science
Online ISSN : 1347-4456
Print ISSN : 1347-4464
ISSN-L : 1347-4456
The Role of Weak Ties in Diversification Strategy
Hideko KONO
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JOURNALS OPEN ACCESS

2016 Volume 15 Issue 3 Pages 119-128

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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.

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© 2016 Hideko Kono. This is an Open Access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted reuse, distribution, and reproduction in any medium, provided the original work is properly cited.

This article is licensed under a Creative Commons [Attribution 4.0 International] license.
https://creativecommons.org/licenses/by/4.0/
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