Based On The Stability Of The Strategy Of Dynamic Capabilities

The relations between business strategy and its relating dynamic capabilities are the eternal subject of Strategy Management study. Linking this subject with environment changing, shows the recent development in Strategy Management study. Dynamic capability theory also makes progress when it starts to study how a business gains competitive edge by adapting with changing environment. Expansion strategy is the hot spot in the current strategy theory study and business operation practice. In comparison, the value and practice of maintenance strategy is less studied. Unless deep research is conducted, this theory will not be developed into a theory that could provide guidance to business practice.This study aims to reveal the making, identification method and formation mechanism of maintenance strategy dynamic capabilities, so as to give guidelines to business operation practice. This study includes: 1. To explore the importance, value and practice of maintenance strategy dynamic capabilities. 2. The working mechanism of maintenance strategy dynamic capabilities under changing environment, how it affects and updates core capabilities and how does dynamic capability evolve and regroup.3. Through a model to show the formation of maintenance dynamic capability and a systematic study on the main factors that affects dynamic capability, assisting a business to find and choose accesses to strengthen its dynamic capability. 4. A complete case study to analyze the making of dynamic capability, attributing to the completeness of dynamic capability theory's foundation, development and regroup.A company's dynamic capability shows itself through its behaviour in adaptation to environment change (the features of dynamic capability). On the basis of theory and example, this study reviews the dimensions of dynamic capability, which includes insight and prevision, strategic resources, study and absorption, integration, innovation, reconfiguration and transformation. In fact, the identification of dynamic capability is no more than the identification of its dimensions. Furthermore, through the observation of these dimensions, evaluation of dynamic capability could be achieved by taking the following steps: firstly, through interviews and other means to gather information on observable dimensions of a company's dynamic capability, getting objective facts of a company in its different stages of development. Secondly in accordance of these facts, conduct tests on certain questions. Thirdly, obtain the evaluation result by using of Guttman Scales.Case study is the main research method of this paper. This dissertation studied the case of Goodbaby group in its different development stages. In this case study, it is observed that Goodaby's strategy changed in response to industry environmental change. Its competition strategy and business positioning was affected by the demand in targeted markets and competition factors. This case study reveals Goodbaby's dynamic capability dimensions, and by making use of Guttman Scales and Case study method, conducted a empirical study on the evaluation method of dynamic capability, showing the operation pattern of dynamic capability in the company and business unit level. To make sure the conclusion of this dissertation is reliable, companies that are better at changing internally to adapt to environment changes are selected to be study object.Under the influence of dynamic environment change, a business has to integrate effectively tangible resources, intangible resources and human resources both inside and outside its organization, in order to realize its strategic target that is fast adapting to the changing environment. Capabilities created during the integration and adaptation process will drive the business in areas of innovation, reconfiguration and transformation, supporting business strategy transformation and organizational evolution. In the case study of Goodbaby Group, from the company's 20 years of development process, interaction between business strategy and dynamic capability could be observed. In the early days, the collectively-owned small company on the brink of bankrupt, under the strategy of low cost and differentiation, laid its foundation of competitive advantage in China. In later days, with the advance of globalization and Chinese government macro control adjustment, the company's overall strategy switches from growth by international retail channels to the formation of maintenance strategy and dynamic capability. Behind these strategy changes, dynamic capability has always been the driving engine that maintains the lasting competitive edges. Driven by its dynamic capability, Goodbaby group carried out its strategies successfully and formed an innovation culture in its organization, becoming a perfect study model for maintenance strategy dynamic capability.Unlike previous theory study on dynamic capability, on basis of overall business strategy and business evolution, this study put forward the concept of dynamic capability for maintenance strategy, and strives to redefine dynamic capability from this new angle. According to dynamic capability theory, dynamic capability dimensions in organization and environment in different forms, mainly including the entrepreneur spirit, insight and prevision, strategic resources and core competence regroup and renewal. The purpose of study on dynamic capability for maintenance strategy is to pin point its influence on business strategy evolution and core competence renewal, so as to create the most innovative and competitive dynamic capability.