1. Operations Management
Explication Dynamic Capabilities:
the nature and microfoundations of (sustainable) enterprise performance
David J. Teece
Shinyoung Kim
Operations Management

2. What are Dynamic Capabilities?

3. Why Dynamic Capabilities?
Open Economy
High Technology
Open User Innovation
Cospecialized Asset
Enterpreneurship ….

4. Dynamic capabilities framework

5. (and Individual Capacities) to Learn and to Sense, Filter, Shape, and
Elements of an ecosystem framework
for “Sensing” market and technological opportunities
Processes to
Direct Internal R&D
&
Select New Technologies
Processes
to Tap Developments
in Exogenous Science
and Technology
Analytical Systems
(and Individual Capacities)
to Learn and
to Sense, Filter, Shape,
and
Calibrate Opportunities.
Processes to Tap Supplier
&
Complementor Innovation.
Processes to Identify
Target Market Segments,
Changing Customer Needs,
and Customer Innovation.

6. Strategic decision skills/ execution
for “Seizing” market and technological opportunities
Delineating the Customer Solution and the Business Model
Selecting the Technology and Product Architecture;
Designing Revenue Architectures; Selecting Target Customers; Designing Mechanisms to Capture Value.
Selecting Enterprise Boundaries
to Manage Complements and“Control”Platforms
Calibrating Asset Specificity;
Controlling Bottleneck Assets;
Assessing Appropriability;
Recognizing, Managing,
Capturing Cospecialization Economies
Enterprise Structures, Procedures, Designs and Incentives for Seizing Opportunities
Selecting Decision-Making Protocols
Recognizing Inflexion Points and Complementarities;
Avoiding Decision Errors and Anticannibalization Proclivities
Building Loyalty and Commitment
Demonstrating Leadership; Effectively Communicating; Recognizing Non-Economic
Factors, Values, and Culture

7. Decentralization and Near Decomposability
Combination, reconfiguration, and asset protection skills
for “Transforming” market and technological opportunities
Decentralization and Near Decomposability
Adopting Loosely Coupled Structures;
Embracing Open Innovation;
Developing Integration
Coordination Skills.
Cospecialization
Managing Strategic Fit
So That Asset Combinations Are Value Enhancing.
Continuous Alignment
and Realignment of Specific Tangible and Intangible Assets.
Governance
Achieving Incentive Alignment; Minimizing Agency Issues;
Checking Strategic Malfeasance; Blocking Rent Dissipation.
Knowledge Management
Learning; Knowledge Transfer;
Know-howIntegration;
Achieving Know-how and Intellectual Property Protection.

8. “Orchestration” Dynamic capabilities

9. D. J. Teece Vs. M. E. Porter Sustainable Competitive Advantage
Let’s Think about ….Conflicting views on
Sustainable Competitive Advantage
D. J. Teece Vs M. E. Porter

10. Dynamic Capabilities at
Sensing
Seizing
Transforming
Result
iPod
Existing mp3 players
were too “geeky”
Create an aesthetically appealing
portable device with a simple
interface over an accelerated
product development cycle;
later: improve appropriability with
exclusive Fair Play DRM in the
iTunes Music Store
Port iTunes software to rival
Windows platform;
Expand into content distribution with the iTunes Music Store;
Shift company emphasis from
computers to consumer
electronics
Domination of the
portable digital music
player market;
Expansion to video capabilities
(playback and distribution).
iPhone
Existing smart phones
retained an awkward
interface too close to
their cell phone roots.
Create a multimedia phone with a
large screen and an intuitive
interface; promote complementary
asset creation with the App Store
infrastructure.
Develop telephony capabilities;
enter the regulated telephony
market
One of the only companies
making money with
smart phones
iPad
“Netbooks” provide an unsatisfying computing experience and
“E-readers” provide
limited functionality.
Scale up the iPhone interface to
provide a richer multimedia
platform without
phone functionality.
Extend the “simple interface”
aesthetic to a
computing platform.
Make new demands for
Tablet PC
DYNAMIC CAPABILITIES: A GUIDE FOR MANAGERS by David J. Teece (2011) 

11. How to build Entrepreneurship?
“Capturing value is never certain, but it can be managed.”

12. Thank You!