Over a decade ago, “dynamic capabilities” were introduced to the business world as a way for companies to get ahead in times of rapid technological change through orchestration, recombination and transformative collaboration. Now, with the advent of Web 2.0 and the opportunities that presents, dynamic capabilities achieve a new relevance. The emerging technological landscape enables firms to put dynamic capabilities into practice easier than ever before, since it allows for ongoing collaboration and interaction between companies and users, hence fostering new types of innovation. In this article, the authors outline the principles behind Web 2.0-empowered business models, giving managers numerous ideas they can try out immediately, at low cost and with potentially much higher ROI than could ever be achieved with a non-Web-enabled business. Why not put your own dynamic capabilities to the test? You’re only a click away.
Tools and Frameworks:
> The New Collaborative Matrix shows how collective network effects can be successfully monetized and create new business value.
> The Multiplied Advantages of Web 2.0 compares the ROI and cash flow curves of Web 2.0, Web 1.0 and traditional approaches, showing that any company with an existing network of relationships can connect and combine their users and partners for new value creation by thinking exponentially rather than incrementally.
Examples Cited:
Skype, Apple, Google, Amazon, Facebook, Flickr, Obama, Xing, TopCoder, Webkinz, Zopa, GE, Lego, Cisco, Heinz, McKesson, Kiva
Research Basis:
The authors’ extensive research in the field, including the book Web 2.0: A Strategy Guide by Amy Shuen, and the study “The Impact of Social Media on Collaborative Innovation: An Enterprise Perspective” by Sandra Sieber et al.
About the Authors:
Amy Shuen is a Yale, Harvard and Berkeley-trained software/digital electronics engineer, economist and business school professor, formerly at Wharton and Haas Berkeley in the U.S. and currently at the China Europe International Business School (CEIBS) in Shanghai.
Sandra Sieber is associate professor and chair of the Department of Information Systems at IESE.
