Business Models and Dynamic Capabilities

David Teece writes about business model innovation, implementation, and change. He reviews how the strength of a firm’s dynamic capabilities help shape its proficiency at business model design; and how a business model influences the firm’s dynamic capabilities.

Business models, dynamic capabilities, and strategy are interdependent. The strength of a firm’s dynamic capabilities help shape its proficiency at business model design. Through its effect on organization design, a business model influences the firm’s dynamic capabilities and places bounds on the feasibility of particular strategies. While these relationships are understood at a theoretical level, there is a need for future empirical work to flesh out the details. In particular, studies that provide a better understanding of business model innovation, implementation, and change will also shed light on important aspects of dynamic capabilities.

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