The paper introduces the concept of dynamic capabilities in firms, emphasizing the shifting nature of the environment and the importance of strategic management in adapting, integrating, and reconfiguring internal and external organizational skills. The authors, David Teece and Gary Pisano, argue that competitive advantage requires both the exploitation of existing capabilities and the development of new ones. They propose a framework that identifies three key areas: processes, positions, and paths. Processes refer to the way things are done within the firm, including integration, learning, and reconfiguration. Positions include the firm's current endowment of technology, intellectual property, customer base, and upstream relations. Paths are the strategic alternatives available to the firm and the attractiveness of future opportunities. The authors also discuss the replicability and imitability of organizational processes and positions, noting that distinctive capabilities are difficult to replicate or imitate due to their tacit nature and the need for specific contexts. Finally, they highlight the strategic issues arising from a dynamic capabilities perspective, emphasizing the importance of creating and maintaining unique processes and paths to sustain competitive advantage in a dynamic market.The paper introduces the concept of dynamic capabilities in firms, emphasizing the shifting nature of the environment and the importance of strategic management in adapting, integrating, and reconfiguring internal and external organizational skills. The authors, David Teece and Gary Pisano, argue that competitive advantage requires both the exploitation of existing capabilities and the development of new ones. They propose a framework that identifies three key areas: processes, positions, and paths. Processes refer to the way things are done within the firm, including integration, learning, and reconfiguration. Positions include the firm's current endowment of technology, intellectual property, customer base, and upstream relations. Paths are the strategic alternatives available to the firm and the attractiveness of future opportunities. The authors also discuss the replicability and imitability of organizational processes and positions, noting that distinctive capabilities are difficult to replicate or imitate due to their tacit nature and the need for specific contexts. Finally, they highlight the strategic issues arising from a dynamic capabilities perspective, emphasizing the importance of creating and maintaining unique processes and paths to sustain competitive advantage in a dynamic market.