Capability Development for Within-Organization Distinctiveness in Sub-Brand Products: A Case Study in the Media Industry

Abstract

Digital transformation necessitates firms to continuously innovate their product and service portfolios, which drives firms to develop their capabilities accordingly. While adapting to the evolving environment, incumbent firms develop new digital offerings that both seek novelty but also build on the existing brands and capabilities. Using a single case study design with 27 interviews from a media company, this study explores the capability development in the context of an incumbent creating a new, digital sub-brand and seeking a within-organization optimal distinctiveness. This study examines how an incumbent firm develops its capabilities and what organizational factors and practices facilitate and hinder the development of the new sub-brand and its associated capabilities. The findings show that developing capabilities for internal distinctiveness is a complex, organizationally embedded challenge that requires consideration of distinctive skills, professional norms and values, and how managerial and technical structures and systems are set up.