When does category spanning hurt or help producers?

Abstract

Scholars have theorized many factors shaping whether category spanning helps or hurts producers. We first synthesize evidence by meta‐analyzing 25 years of empirical research, which reveals a null effect of spanning on average, yet with significant subsample heterogeneity. To unpack it, we theorize and find that spanning hurts producers more (i) when spanning occurs within bounded (vs. unbounded) category systems, (ii) when category associations are made by third parties (vs. insiders), (iii) when spanning is located at the product (vs. producer) level, and (iv) when spanning is occurring at once (vs. over time). Two mechanisms underpin these relationships: on the audience side, spanning influences evaluations when it is salient; on the producer side, spanning results in more positive outcomes when producers can control how their spanning behavior is conveyed to audiences. Because these two mechanisms operate jointly, their combined influence can result in spanning having a null, a positive, or a negative net effect. Our study identifies, across 16 theoretical configurations, where these three baseline effects should be expected and clarifies why. Managerial Summary Firms face a strategic dilemma: should they span across categories or stay focused? Prior studies show mixed results on whether spanning helps or hurts performance. Our findings suggest that outcomes depend on how salient spanning is to audiences and how controllable it is for producers. Spanning tends to hurt performance (i) when the categorization system is bounded (vs. unbounded), (ii) when third parties (vs. insiders) highlight the diversification, (iii) when individual products (vs. producers) span categories, and (iv) when spanning occurs simultaneously (vs. over time). Firms can benefit from spanning, but success depends on managing these four factors to reduce saliency and enhance controllability.