Dynamic Capability Theory

Dynamic Capability Theory suggests that a company's ability to adapt, innovate, and stay competitive depends on its capacity to reconfigure and develop its resources and skills in response to changing environments. Instead of just relying on existing assets, organizations with strong dynamic capabilities can sense opportunities or threats, efficiently mobilize internal and external resources, and continuously transform their operations. This ongoing adaptability allows businesses to sustain success over time, especially in fast-changing markets, by staying ahead of competitors and meeting new customer needs effectively.