Competing through Renewal: Dynamic Capability at Bang & Olufsen

Christopher Gude & Nikolaj Dylsing Olsen

Student thesis: Master thesis

Abstract

The accelerating development of technology within the industry of electronic consumer goods have caused changes that required companies to renew themselves and adapt to the modified environment. Theory of dynamic capability seeks to explain companies’ ability to renew themselves in the face of a changing environment. However, the theory can be considered fairly complex and just how a company can exercise dynamic capability is not particularly evident from current literature. Through a case study of the Danish AVPcompany Bang & Olufsen, this thesis accommodates the complexity and examines how a mature company in the electronic consumer goods industry can exercise dynamic capability when striving to compete in a market characterised with frequent market changes. A company’s dynamic capability can be disaggregated into three capacities: Sensing' opportunity, seizing' opportunity, and resource' alteration. To advance the theory, it was examined what internal factors that influence how a company senses and seizes opportunity, and how different approaches of resource alteration can be exercised. The thesis investigated Bang & Olufsen from 1991 till present time by combining secondary data with insights from semiPstructured interviews with multiple B&O employees, a board member, and an industry expert. Findings show that B&O has exercised dynamic capability through the various modes of resource alteration, including brand extensions, partnerships, new distribution channels, and releasing workforce and business areas. Internal elements including R&D processes that combine knowledge, path dependency to resources (e.g. core competencies and its cognition about these were found to affect what opportunities B&O sensed and seized. The thesis contributes to the theory of dynamic capability by clarifying how dynamic capability can be exercised in an empirical case. It is emphasised that how a company can exercise dynamic capability depends on internal factors and previous paths, why thorough selfPassessment of core competencies and resources is advised before responding to change. Future research of other cases is necessary to verify a more general applicability of the findings and further advance on dynamic capability.

EducationsMSc in Management of Innovation and Business Development, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2017
Number of pages106
SupervisorsJens Frøslev Christensen