Dynamic capabilities and competitive advantage

Abstract

The aim of this study was to identify and explain how dynamic capabilities are created in pharmaceutical industry and how to sustain a capabilities-based advantage in the environmental change. The research try to identify dynamic capabilities with which firms can adapt to changing environment in improving organizational effectiveness and to increase competitive advantage.

Capabilities that promote economically significant change are dynamic and what appear to be dynamic may change when the perspective changes. Companies have to improve their processes and products that match market requirements, they have to reconfigure their asset base by creating new combinations from existing and new resources. Companies need to develop their dynamic capabilities, their ability to continually response to new demands, to sense a business opportunities.

Using interviews with managers at different organizational sections, the study examine the process of dynamic capability development in a pharmaceutical firm. Managers should sense the environment and pay attention dynamic capabilities but also operational capabilities and their relationships to provide the competitive advantage and superior performance. The dynamic capability offers a guide to understand a complex business organizations and contemporary management practices in enterprises.