Co-evolution of dynamic capability and knowledge development: from car assembly to luxury car innovation in the Iranian auto industry

ABSTRACT

Despite the resounding call for innovation as a source of competitive advantage in today’s everchanging environment, many companies have found themselves unable to introduce innovative products and services to the market. The lack of knowledge and capability supportive of innovation is more observable among companies in emerging economies. Lagging behind developed economies in technology development created disadvantage for such companies, often inhibiting innovation. This study has unpacked the processes of dynamic capability and knowledge development in a leading automaker in Iran and the Middle East. Findings reveal the role of product innovation and the coevolutionary relationship between product innovation projects and knowledge and capability development. The findings guide managers for step by step development of knowledge and capability through a series of product innovation projects.

KEYWORDS:

• Dynamic capability
• product innovation
• knowledge and capability development
• case study
• emerging economy

Disclosure statement

No potential conflict of interest was reported by the author(s).