Transformation of business models through dynamic organisational capabilities

In this paper we look at the application of the theory and practice of dynamic capabilities of companies that adapt their current resources and competences. We review the Concept of Dynamic Capabilities that is developed by D.J. Teece, and discuss the context of the resource-based view and the Concept of Key Capabilities. In the article we highlight the three main components of dynamic capabilities: the sensory capabilities, the capacity to learn and strategic agility. The main part of the work includes an illustrative case of Netflix’s business transformation and the decline of Blockbuster Video. We take a closer look at the development of Netflix – its  key business innovations in ‘delivering’ content to the customer and the collapse of Blockbuster Video – the reasons for its inability to sense the changing business environment.The conclusions of the cases are discussed through the prism of the three components of dynamic capabilities. We highlight which of these enabled the company to transform, develop new key capabilities and build competitive advantage.