How do ICT firms react to convergence? an analysis of diversification strategies

Convergence represents a dominant force in the evolution of the ICT industry. Under convergence, the identification and analysis of strategies to efficiently leverage firm resources and to configure firm cooperations represents a challenging task. Diversification is considered a central firm strategy with regard to convergence. Former research has mainly focused on the phenomenon of ICT convergence per se. In this article, we analyse how ICT firms react to convergence. Network analysis techniques are applied to assess the degree to which ICT market segments are exposed to convergence. Based on this assessment, we evaluate firm diversification strategies under convergence with a focus on diversification objectives and firm performance. The data analysis provides two major implications. Firstly, convergence creates synergy potentials for diversifying ICT firms. Secondly, diversification does not generally allow ICT firms, which are exposed to convergence, a more efficient application of resources. Even though the term convergence is often cited in ICT research, empirical analyses addressing ICT convergence and firm strategies are rather scarce. This work provides such an analysis by applying a novel research approach based on network analysis.