Social business hybrids: demand externalities, competitive advantage, and growth through diversification

This paper addresses the implications of hybridity for strategic choices with products and businesses by focusing on the role of social business hybrids’ customers. It argues that hybridity can be a source of competitive advantage in the marketplace, but also create hurdles to firms’ ability to scale up their business. Diversification represents a potential choice that simultaneously generates growth, preserves hybridity, and avoids negative demand-side externalities. This paper analyzes the optimal type, timing, and scope of such diversification.