Competitive advantage and
strategy formulation
The key role of dynamic capabilities
Salvador Vivas Lo
´
pez
Department of Business Administration, Faculty of Economics,
University of Valencia, Valencia, Spain
Abstract
Purpose – The aim of this paper is to promote the use of dynamic capabilities as a strategic tool of
the highest order in terms of firm management.
Design/methodology/approach – The content of the article is developed from a table that offers
some insights into the relationship between the three theoretical perspectives analyzed in the paper:
resource-based view, knowledge-based view and dynamic-capabilities view.
Findings – The paper describes the evolution that can be discerned in the process of developing
competitive advantage, from a resource-based view to a dynamic-capabilities framework.
Originality/value – The objective of the article was not to bring to light any new revelations in this
field of investigation, but is intended as a theoretical reflection on the implications of dynamic
capabilities for firms and managers.
Keywords Competitive advantage, Management strategy, Knowledge management,
Learning organizations, Resource management
Paper type Conceptual paper
Introduction
The intentions of this paper are three-fold. On the one hand, as a result of our own
investigations, we will provide a comparative analysis of how relevant academic
literatures has evolved in such a way that dynamic capabilities are presently
considered a business asset of the highest order. Dynamic capabilities are complex,
higher order organizational processes which provide adequate conditions for the
modification and renewal of the firm’s stock of business assets. Secondly, we will
discuss the dynamic-capabilities view (DCV) as having a central role to play in the
analysis and interpretation of complex organizational processes allowing firms to
remain competitive and adapt to external changes.
Lastly, and as a result of the previous points, we will highlight the use of dynamic
capabilities as an essential element in the development of knowledge-based assets,
which have a high chance of creating and sustaining competitive advantage in what is,
today, an unsettled and globalized business environment. In short, we will present a
framework for identifying the elements that make up the organizational processes
involved in learning and the creation of assets and knowledge. We will also indicate
key points for special consideration by managers in their role as strategists, planners
and designers of the future of their organizations.
The Emerald Research Register for this journal is available at The current issue and full text archive of this journal is available at
www.emeraldinsight.com/researchregister www.emeraldinsight.com/0025-1747.htm
Key role of
dynamic
capabilities
661
Management Decision
Vol. 43 No. 5, 2005
pp. 661-669
q Emerald Group Publishing Limited
0025-1747
DOI 10.1108/00251740510597699