The role of dynamic capabilities for business model innovation in organizations from relatively stable markets

Abstract

The present paper aims to explain how dynamic capabilities contribute to business model innovation in established organizations. It draws on a qualitative research design based on a single case study of an established multinational company operating in the construction materials industry (production and sale), which developed a service solution in lightweight façades. In addition to explaining how the sub-dimensions of dynamic capabilities contributed to the success/failure of the new business model, from its idealization and structuring to its execution, the paper shows which dynamic capabilities were present at the beginning and which ones were developed during the innovation. The study uncovers four important findings: 1) dynamic capabilities should be present in top leadership for the development of business model innovation; 2) the occurrence of dynamic capabilities takes place in a non-sequential and non-linear fashion; 3) dynamic capabilities contribute to the creation of competitive advantages in relatively stable environments; and 4) existing resources are important catalysts of results for business model innovation in established organization. The paper hence highlights the role of top leadership in business model innovation, as well as identifies the contribution of dynamic capabilities in relatively stable markets, alongside the catalyzing role of available resources in established organizations.