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

Andrejs Čirjevskis

doi:10.3390/joitmc5010012

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.

Highlights

IntroductionA focal firm’s growth strategies and performance are greatly influenced by the integrative type of strategies: Collaborative (alliances, networks, joint ventures) or consolidative (mergers, acquisitions), to foster the innovation and to deliver new customer value propositions
A focal firm’s growth strategies and performance are greatly influenced by the integrative type of strategies: Collaborative or consolidative, to foster the innovation and to deliver new customer value propositions
Researchers in strategic management argue that the performance outcome of a specific growth strategy is usually affected by the dynamic capabilities and business models (BM) [1,2,3]

Summary

Introduction

A focal firm’s growth strategies and performance are greatly influenced by the integrative type of strategies: Collaborative (alliances, networks, joint ventures) or consolidative (mergers, acquisitions), to foster the innovation and to deliver new customer value propositions. What is the research gap in the existing literature on dynamic capabilities and business models? There are very few research papers that applied the dynamic capabilities framework as a tool of the business analysis of a reinvention of a business model’s components of an acquirer’s company in the M&A processes. The reinvention of business models of acquirers is still an open area for research due to the following reasons. Researchers in strategic management argue that the performance outcome of a specific growth strategy is usually affected by the dynamic capabilities and business models (BM) [1,2,3]. The goal of this article is to understand the role of dynamic capabilities as drivers of business model innovation of acquirer’s company in mergers and acquisitions of technology-advanced firms.

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Results