Abstract: Hidden champions, as leaders in global niche markets, often encounter a “ceiling” in their industry growth space, so figuring out how they can achieve leapfrog growth through corporate spin-off is an important opportunity for theoretical innovation. This study takes the global straw industry leader Soton and its six core spin-offs as embedded case study objects, and summarizes and refines the spin-off growth mechanism for hidden champions to break through the industry “ceiling” from the perspective of relational dynamics. Our findings reveal a four-stage growth, including spin-off initiation, sponsorship, emergence, and reinvestment. The interwoven evolution of two sets of relationships, between parent and spinoffs and between spinoffs and spinoffs, drives the parent to empower numerous spin-offs based on its special sponsorship. Reciprocally, some spin-offs may re-feed the parent. In this virtuous cycle, spin-off logic becomes a significant strategic choice for hidden champions, enabling leapfrog growth driven by the dual forces of the parent's core competence and the spin-offs' flexibility in seizing market opportunities. This study expands the current “T-shaped strategy” perspective, which centers on the single enterprise as carrier of the strategy. Our finding supplements traditional focus on specialization strategies or diversification strategies, and contributes to theoretical integration and advancements in the growth strategy of hidden champions, spin-off development, and relational dynamics.

Key words: hidden champions, spin-off strategy, spin-off development, relational dynamics