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StrategicManagementJournal,Vol.18:7,509–533(1997)DYNAMICCAPABILITIESANDSTRATEGICMANAGEMENTDAVIDJ.TEECE1*,GARYPISANO2andAMYSHUEN31HaasSchoolofBusiness,UniversityofCalifornia,Berkeley,California,U.S.A.2GraduateSchoolofBusinessAdministration,HarvardUniversity,Boston,Massa-chusetts,U.S.A.3SchoolofBusiness,SanJoseStateUniversity,SanJose,California,U.S.A.Thedynamiccapabilitiesframeworkanalyzesthesourcesandmethodsofwealthcreationandcapturebyprivateenterprisefirmsoperatinginenvironmentsofrapidtechnologicalchange.Thecompetitiveadvantageoffirmsisseenasrestingondistinctiveprocesses(waysofcoordinatingandcombining),shapedbythefirm’s(specific)assetpositions(suchasthefirm’sportfolioofdifficult-to-tradeknowledgeassetsandcomplementaryassets),andtheevolutionpath(s)ithasadoptedorinherited.Theimportanceofpathdependenciesisamplifiedwhereconditionsofincreasingreturnsexist.Whetherandhowafirm’scompetitiveadvantageiserodeddependsonthestabilityofmarketdemand,andtheeaseofreplicability(expandinginternally)andimitatability(replicationbycompetitors).Ifcorrect,theframeworksuggeststhatprivatewealthcreationinregimesofrapidtechnologicalchangedependsinlargemeasureonhoninginternaltechnological,organizational,andmanagerialprocessesinsidethefirm.Inshort,identifyingnewopportunitiesandorganizingeffectivelyandefficientlytoembracethemaregenerallymorefundamentaltoprivatewealthcreationthanisstrategizing,ifbystrategizingonemeansengaginginbusinessconductthatkeepscompetitorsoffbalance,raisesrival’scosts,andexcludesnewentrants.1997byJohnWiley&Sons,Ltd.INTRODUCTIONrespecttoassistingintheunderstandingofhowandwhycertainfirmsbuildcompetitiveadvan-Thefundamentalquestioninthefieldofstrategictageinregimesofrapidchange.OurapproachismanagementishowfirmsachieveandsustainespeciallyrelevantinaSchumpeterianworldofcompetitiveadvantage.1Weconfrontthisquestioninnovation-basedcompetition,price/performanceherebydevelopingthedynamiccapabilitiesrivalry,increasingreturns,andthe‘creativeapproach,whichendeavorstoa
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