THE INTERPLAY OF INNOVATION STRATEGY AND DYNAMIC CAPABILITIES IN ACHIEVING COMPETITIVE ADVANTAGE: THE MODERATING ROLE OF ENVIRONMENTAL DYNAMISM
Abstract
Companies need to maintain a competitive advantage in an increasingly dynamic business environment. This article proposes a conceptual framework to understand the role of innovation strategy (IS) and dynamic capabilities (DC) in achieving competitive advantage (CA), with environmental dynamism (ED) as a moderating variable. The first hypothesis states that innovation strategy positively affects competitive advantage. The second hypothesis states that innovation strategy positively affects dynamic capabilities. The third hypothesis proposes that dynamic capabilities positively affect competitive advantage. The fourth hypothesis examines the mediating role of dynamic capabilities in the relationship between innovation strategy and competitive advantage. The fifth hypothesis states that environmental dynamism moderates the relationship between innovation strategy and competitive advantage. Innovation strategy enables companies to develop unique products, services, and processes, enhancing adaptability and operational efficiency. Dynamic capabilities allow companies to quickly adapt to changes, seize opportunities, and reconfigure resources effectively. Environmental dynamism can strengthen the relationship between innovation strategy and competitive advantage, particularly in highly dynamic conditions.
Further research is needed to test and validate these relationships in various industrial and geographical contexts. Empirical studies will provide deeper insights into the dynamics between innovation strategy, dynamic capabilities, and competitive advantage. Recommendations for companies include continuous investment in innovation, development of dynamic capabilities, and adjusting strategy to environmental dynamism to achieve and sustain competitive advantage.
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