Dynamic Capability: Conceptual and Contextual

This article reviews relevant literature to understand the research direction concerning Dynamic Capability in the Small and Medium Enterprises (SMEs) sector. This research uses the literature review method. Dynamic Capability refers to a firm's ability to integrate, build and reconfigure internal and external competencies to address rapidly changing environments. It encompasses the processes and skills that enable organizations to sense opportunities and threats, seize those opportunities, and transform their operations accordingly. These capabilities are crucial for firms, especially SMEs, to thrive in competitive and ever-changing business landscapes. Previous research found the impact of Dynamic Capability on Performance. By exploring the interplay between these capabilities and SME performance, the article provides valuable insights into how firms can navigate challenges and leverage opportunities in a dynamic marketplace. The findings emphasize the necessity for SMEs to cultivate dynamic capabilities to sustain competitive advantage and drive innovation in an ever-evolving economic landscape.