Gaining legitimacy in converging industries: Evidence from the emerging market of functional food

SummaryThis study offers new insights on legitimacy and legitimation strategies in the peculiar setting of converging industries. Companies that decide to enter converging markets have to face stakeholders who are uncertain about their needs and claims. Grounding on a strategic perspective to legitimacy, we analyzed the legitimation strategies implemented by two companies that entered the market of functional food in Italy when it was emerging from the convergence of the food and the pharmaceutical industries. Results show that legitimation strategies combined pragmatic, moral and cognitive traits, but that moral and cognitive traits were pre-eminent. Legitimacy was pursued through peculiar cross-legitimation strategies, i.e. leveraging on the legitimacy gained by one group of stakeholders in order to win legitimacy by another one. The study shows that legitimation is path-dependent also in converging industries and companies should take into account their legitimacy legacy when entering a converging market. Moreover, companies concentrate their efforts to legitimation towards the subset of stakeholders that managers perceived as the most critical. In our cases they were consumers, the scientific community and employees. Finally, the implications of these outcomes have been discussed to provide a panel of managerial implications and areas for further research.

► Pragmatic, moral and cognitive legitimacies are combined in converging markets.
► Moral and cognitive legitimacies appear to be pre-eminent in converging markets.
► Cross-legitimation strategies are valuable in converging markets.
► Legitimation is path-dependent also in converging markets.
► Consumers, the scientific community and employees emerged as critical stakeholders.