Business Model Adaptation of Small and Medium-Sized Information Technology Firms: The Role of Dynamic Capabilities

Small and medium-sized information technology firms operating in high-velocity business environments have to continuously adapt their business models. Prior research on business model adaptation, however, remains under-developed. In this study, the authors address the gap by drawing on the dynamic capability perspective. Based on the qualitative data collected from 35 interviews with 10 companies in China, they develop a processual model and unveil how these companies employ dynamic capabilities (i.e., sensing, seizing, and transforming), complemented by ordinary capabilities to enact, manage, and implement business model adaptation. This study provides novel insights into a theoretical issue of business model adaptation for information technology firms and managerial implications while using an adaptive business model innovation strategy.