Dynamic Capabilities Theory

Dynamic Capabilities Theory explains how companies stay competitive by continuously adapting, building, and reconfiguring their resources and skills in response to changing environments. It emphasizes that just having resources isn't enough; an organization must develop the ability to sense opportunities and threats, seize new initiatives, and transform itself to meet evolving market demands. These flexible capabilities enable a business to innovate and maintain a competitive edge over time, especially in unpredictable or fast-changing industries.