Exploring the Interplay between Digital Business Models and Dynamic Capability in the Pursuit of Competitiveness

Since the 19th century, three industrial revolutions have occurred in the business environment and we are now witnesses to the fourth industrial revolution, also known as “Industry 4.0”. The process of digitalisation is currently a catalyst for the transformation of business models towards digital business models, which is based on the use of interconnected digital technologies, automation, and internet-enabled services. In this change, adopting the dynamic capability principles is of vital importance for organisations in order to keep up with ever-changing business conditions. In doing so, aligning the internal organisational factors with external environment is also critical for achieving sustainable competitive advantage. From this point forth, this chapter aims to contextualise the interplay between digital business models and dynamic capability by discussing internal parameters and the external competitive environment of organisations. Consequently, the outcomes of this chapter can help academics and practitioners to focus more on the impact of digitalisation on designed business models in the pursuit of holding competitive advantage and can actuate the need for strategic change both in the intersected literature and in practical applications along with extant and emerging dynamic capabilities (digital and non-digital).