Legitimating strategies for differentiation in the red ocean of nutraceuticals

Differentiation is important to business competition, particularly when value propositions, technologies, and markets are converging to blur the boundaries between industries and create new hybridized segments at their intersections. Convergence from new technologies presents new packages of performance attributes and for underserved or non-consumers implies new sets of value propositions, allowing both challengers and disruptors to create new markets ignored or untapped by their competitors. Taking nutraceuticals as an example, this paper uses a case study to investigate differentiation under convergence of the food, biotechnology, and pharmaceutical industries. We study a startup in Taiwan, GWOXI, to examine how it took advantage of the convergence of technologies from the supply side, and that of markets from the demand side, to differentiate and defend itself against incumbents and other new entrants. As opposed to previous works that put more emphasis on the attributes of products themselves, we pay special attention to legitimating strategies that affect consumers' perceptions of product attributes. We propose three legitimating strategies - theorization, authorization, and validation - which are instructive for new product development and marketing in the nutraceuticals industry in particular and in other converged industries in general.