Slide-1 A firm must pursue strategies that allow it to develop and apply its capabilities in an environment that shows

s constant and unpredictable change. firms can reap considerable benefits from timing their pushes for various capabilities.

Slide-2 Dynamic capabilities must co evolve with the different products and markets timing of a firms decisions adds a dynamic aspect to its capability development.

Slide-3

Replication Strategy- With replication, firms build upon their capabilities in project categories in which they are already successful. Renewal Strategy - with renewal strategies, they ramp up their capabilities in categories where they have not had much recent success.

Slide- 4 likely to stem from the capabilities that they have already developed within a well defined product and market. Firms can therefore build upon their superior capabilities through the decisions that they regularly make to focus on those individual project categories in which they have recently been more successful than their rivals.

Slide- 5 A firm must push for substantive improvements to its routines in some of those categories where neither it nor its rivals have had recent success. Slide- 6 firms ability to benefit from each of these strategies is tied to its specific o resource availability o demand conditions

Slide- 8 o Firm is likely to attain stronger financial performance from a renewal strategy if it has access to a larger pool of knowledgeable and skilled employees. Slide- 9

a differentiated replication strategy will produce superior returns by allowing the firm to build upon and refine the routines that reflect its specific capabilities

Slide- 10 o the use of a differentiated renewal strategy can be expected to generate stronger financial performance when there are shifts in overall demand patterns. Slide- 11 o o The Hollywood film industry from 1936 to 1965 represents a promising venue for the study of dynamic capabilities within a project-based industry. each studio could time its emphasis on various genres to create a series of temporary advantages.

Slide- 12 o Sample- Gathered data from all of the seven major studios of the Hollywood film industry from 1936 to 1965: MGM, Twentieth Century-Fox, Warner Brothers, Paramount, United Artists, Universal and Columbia.

Performance variable- used return on sales (ROS) as our primary indicator of financial performance, as it best reflects how much profit a film studio has made on its revenue base. Strategy variables- To construct measures for our strategy variables, we compiled a list of the genres of the 10 movies that had generated the most revenue during a prior two-year period for each studio. We also compiled a list of the genres of the top 10 movies for the rivals of this studio over the same two years.

Slide- 13 Interaction variables Resource availability: significant resource that provided access to major markets and audiences

Demand characteristic: Higher levels of industry demand made it easier for a studio to use replication strategies by assuring it of a sufficient market for movies in its successful genres from year to year Control variables: performance could have been affected by the number of films a studio made each year, we controlled for that variable in our analysis.

Slide- 14

Firms are not likely to show higher levels of performance when they are revamping their capabilities in genres where at least one of their rivals is already doing well.

Preliminary analyses with this strategy showed a negative effect on financial performance

Slide- 15 the independent performance effects of the two strategies, performance was not further affected by the extent to which a studio pursued both strategies at the same time.

Slide- 16 Focused on the dynamic component of capability development within project-based industries. Further research may provide a better understanding of the process by which firms turn to and benefit from different strategies for developing more dynamic capabilities.