The Role of Dynamic Capabilities as Drivers of Business Model Innovation in Mergers and Acquisitions of Technology-Advanced Firms

Abstract

Despite the widespread agreement on the importance of dynamic capabilities to the success of mergers and acquisitions, little is known about how these capabilities may contribute to the business model’s innovation of an acquirer. The purpose of the paper is to clarify the role of dynamic capabilities in business model innovation of acquirer’s company in mergers and acquisitions of technology-advanced firms. Empirically, the author examined the role of dynamic capabilities in the transformation of operationalized components of the business model of the two acquirers (Samsung and Microsoft) by means of the acquisition of technology-advanced firms (Harman and LinkedIn) in 2016. Drawing on extensive qualitative data, the author developed a practice-driven model as a practical guide for scholars who have been studying dynamic capabilities and business models, as well as for those who are new to the field. The resulting model advances the discourse on dynamic capabilities. The presented conceptual model encourages practitioners to grasp an exact relationship between the micro-foundations of each perspective. Overall, the paper deepens the conversation at the nexus of dynamic capabilities and business model innovation in pursuing a new customer value proposition in the merger and acquisition processes and thereby exploiting a competitive advantage.

Keywords

• dynamic capabilities
• business model
• business model innovation
• merger and acquisition