The role of the business model on dynamic capability in the electronics industry

Abstract

This paper explores the role of the business model in increasing the dynamic capability of a firm in the electronics industry. By focusing on the capability of firms following different business models under changing environmental conditions, we have analyzed what business model can help a firm to maintain a strong competitive position. We extend the literature of firms' dynamic capability by examining the competition of firms' business models under changing environmental conditions. We also contribute to the “history-friendly” model literature by identifying a firm's business model and its internal and external dynamics as successful factors in the evolution of the electronics industry. We start from the study of Samsung Electronics to find empirical evidence and then use history-friendly simulation to provide a general analysis of the complex relationships among business models, synergy effect, and environmental conditions. We find that in the electronics industry, a firm following the “open-combined business model” can achieve a strong competitive position under the conditions of a large market size in the components industry and strong technology integration in the consumer electronics industry.