Exploring Dynamic Capabilities and Business Models in Acquisition Processes

Much is known about what dynamic capabilities are. Yet, surprisingly little is known about how multiple dynamic capabilities might be developed in M&A process and underpins competitive advantage of merging company. Using illustrative case study of Facebook Inc. acquisition of WhatsApp Inc, in 2014, we seek to address this gap. Besides contributing to dynamic capabilities view on competitive advantages by adding fresh insights about successful acquisition practice, our core contribution is in emergent theoretical framework that develops three steps to explore dynamic capabilities in acquisition process: 1) identifying dynamic capabilities of selected target company and acquirer company; 2) analyzing both acquirer company's and the target company's business models in depth and identifying how resources and capabilities within the target and acquiring firms fold into new business model; 3) exploiting new acquisition based dynamic capabilities in order to reconfigure existing and acquired resources to facilitate new products development and sustain advantages.