The influence of transformational capabilities on capturing value through business model innovation

Abstract

Businesses increasingly struggle to remain relevant and competitive in a fast-changing environment shaped by technological advances and changing consumer expectations. Since conventional approaches usually fail to manage the complexity of contemporary marketplaces, innovating the business model has become imperative. Therefore, it has become crucial for organisations to build their dynamic capabilities to transform the organisation. The research study investigates how organisations that successfully transform can capture more value. This research study focuses on two theories: dynamic capabilities and business model innovation. According to the theory, the relations of internal resources, processes, and outside influences shape the way an organisation can adapt and respond to interruptions whilst still being able to deliver on and capture exceptional value. Dynamic capabilities centre around how companies see opportunities, seize them and change their operations using tangible and intangible resources to deliver on the opportunity. Business model innovation examines how companies reorganise their systems and processes to properly produce and capture value. The conceptual framework for the research study suggests a dynamic relationship between (1) the capacity of the organisation to transform or reconfigure, (2) the incentive to innovate the business model, and (3) the particular processes employed to capture value. The research seeks to contribute to understanding how dynamic capabilities influence business model innovation. Mainly on how transformational capabilities of the organisation affect the ability of organisations to capture value. Furthermore, the research study was based on a sample size collected from private organisations in an emerging economy, South Africa. Emerging economies offer unique challenges and opportunities due to the nature of the volatile environments, regulatory frameworks, economic change and growing consumer demands. The research study will help organisations understand the relationship between dynamic capabilities and business model innovation whilst also providing a practical overview of the elements that contribute to organisational competitiveness. The research method employed was quantitative and explanatory to clearly understand ii how the constructs were connected. A quantitative approach provided the researcher with statistical data that allowed the data to be computed through a statistical system (SPSS), which provided rigour and allowed each construct to be thoroughly analysed. A purposive sampling approach was used. The key findings from the research study validate that transformation in dynamic capabilities influences business model innovation. Furthermore, it validates the strong connection between transformational capabilities and the organisation's ability to capture value. The research study highlighted the importance of adapting dynamic capabilities into business model innovation, with the mediating factor being innovation. In addition, the research study also showed that the connection between the constructs is not linear and does not act in a solution. Instead, they are interdependent, cyclical in nature and an ongoing process. The implications of the findings show that organisations must adopt newer and more improved ways of doing business that are not only shaped by the external environment but also by the organisation's internal capabilities. Organisations should adopt innovation through more than tangible technology; instead, they should continuously seek ways of integrating innovation into leadership, resource allocation, knowledge management, cost efficiencies, and partnerships. The limitation of the research study was that the sample size used was only 122 respondents, which was not a complete reflection of the entire sample. Furthermore, the study was only conducted on South African private organisations. Additionally, the survey had a higher response rate from the Gauteng region and the financial services sector.