In today’s rapidly evolving global technological landscape, technology-based small and medium-sized enterprises (SMEs) play a pivotal role in driving economic transformation and fostering innovation. As key actors in the innovation chain, these firms face intense market volatility and uncertainties, particularly in the context of deglobalization trends. Understanding how such enterprises cultivate sustainable competitive advantages is crucial for enhancing their resilience and contributing to national economic upgrading. This study investigates the formation mechanism of sustainable competitive advantages in technology-based SMEs through a longitudinal exploration of Shenzhen DJI Technology Co., Ltd. (commonly known as DJI), a leader in the consumer unmanned aerial vehicle (UAV) industry. By examining the interplay between business model innovation and organizational capabilities across different growth stages, I aim to uncover the dynamic processes that underpin competitive superiority in volatile environments.
The theoretical foundation of this research draws on resource-based and capability-based views, integrating concepts from business model innovation and organizational capability evolution. Business model innovation refers to the reconfiguration of value proposition, creation, delivery, and capture mechanisms to exploit market opportunities. Organizational capabilities encompass the firm’s ability to absorb, integrate, and deploy resources, as well as adapt to environmental changes. Prior studies have often treated these elements in isolation or within static frameworks, neglecting their co-evolution across enterprise life cycles. This gap is addressed by applying a resource orchestration lens, which emphasizes the structuring, bundling, and leveraging of resources in alignment with situational demands.
To delve into the research question—”How do technology-based SMEs orchestrate business model innovation and organizational capabilities to achieve sustainable competitive advantages?”—I employ an exploratory single-case study methodology. DJI serves as an exemplary case due to its trajectory from a startup to a global dominator in the UAV market, embodying the challenges and strategies typical of technology-based SMEs. Data were collected from multiple sources, including official disclosures, reputable online platforms, and scholarly publications, ensuring triangulation and reliability. The analysis follows a structured approach, coding data into first-order concepts, theoretical categories, and aggregate dimensions to map the evolutionary pathways.
DJI’s development is segmented into three distinct phases: the survival initial period (2006–2012), the rapid expansion period (2013–2016), and the steady growth period (2017–present). Each phase exhibits unique configurations of business model innovation and organizational capabilities, leading to different forms of competitive advantages. In the initial phase, entrepreneurial capabilities drove business model innovation, resulting in a technology-leading advantage. During expansion, business model innovations fostered user-oriented capabilities, shifting the advantage to customer-centricity. In the growth phase, organizational capabilities coordinated with business model innovations to enable open collaboration, securing a sustainable position in the ecosystem.
The interplay between business model innovation and organizational capabilities can be modeled through a dynamic equation. Let \( BMI \) represent business model innovation and \( OC \) denote organizational capabilities. The evolution of sustainable competitive advantage \( SCA \) over time \( t \) is expressed as:
$$ SCA(t) = \alpha \cdot BMI(t) + \beta \cdot OC(t) + \gamma \cdot (BMI(t) \times OC(t)) + \epsilon(t) $$
where \( \alpha \), \( \beta \), and \( \gamma \) are coefficients capturing the direct and interaction effects, and \( \epsilon(t) \) accounts for external uncertainties. This formula highlights that the synergy between innovation and capabilities amplifies competitive gains, especially when aligned with phase-specific strategies.
To illustrate the product innovations that underpin DJI’s success, consider the DJI FPV drone, which exemplifies the integration of advanced technology and user-centric design. This model has been instrumental in expanding the application of DJI UAVs in recreational and professional videography.
The DJI FPV drone combines high-speed performance with immersive flight experiences, reflecting the firm’s commitment to pushing technological boundaries while responding to market demands. Such innovations are part of a broader portfolio that includes various DJI drone models, each tailored to different segments, from hobbyists to industrial users. The continuous enhancement of DJI UAV systems underscores the importance of iterative development and capability-building in maintaining leadership.
In the survival initial period, DJI’s focus was on overcoming resource constraints through entrepreneurial prowess. The founder’s abilities in market sensing, technological innovation, and integrative planning enabled the firm to identify opportunities in the nascent UAV market. For instance, the development of the flight control system XP3.1 and subsequent models like the “Phantom” series demonstrated how organizational capabilities could drive business model innovation. Value proposition innovation centered on making aerial technology accessible, while value creation relied on R&D investments. Value delivery was optimized through international feedback loops, engaging with DIY drone communities to refine products. This phase established a technology-leading competitive advantage, characterized by superior product performance and rapid market entry. The relationship here is one of capability-driven innovation, where organizational abilities act as the primary enabler.
A summary of the key attributes in this phase is presented in Table 1, which outlines the alignment between organizational capabilities, business model innovations, and competitive outcomes.
| Organizational Capabilities | Business Model Innovations | Competitive Advantage |
|---|---|---|
| Market Sensing, Technological Innovation, Integrative Layout | Value Proposition Innovation, Value Creation Innovation | Technology-Leading |
| Learning Absorption | Value Delivery Innovation | Early Market Penetration |
The rapid expansion period saw DJI leveraging its initial successes to scale operations globally. Business model innovations, such as the introduction of the DJI drone ecosystem with models like the Phantom 3 and 4, emphasized user engagement and diversification. Value delivery innovations included enhanced customer support and global distribution networks, while value capture innovations involved strategic partnerships and open SDK platforms. These moves cultivated organizational capabilities like customer acquisition, information processing, and iterative innovation. For example, the DJI UAV platforms enabled real-time data collection from users, informing product upgrades and feature additions. The competitive advantage shifted to user-orientation, as DJI tailored offerings to specific consumer segments, such as photographers and videographers, using feedback to drive development. This phase illustrates how business model innovations can transform into core capabilities, reinforcing market position.
The steady growth period involved maturing operations and navigating increased competition. DJI’s organizational capabilities evolved to include resource integration, quality management, strategic transformation, and ecosystem innovation. Business model innovations focused on value capture through cost-efficient supply chains, value delivery via robust after-sales services, value proposition expansion into industrial applications, and value creation through open innovation. The DJI FPV drone, for instance, was part of efforts to tap into new markets like racing and cinematography. By collaborating with automotive companies and participating in global standards setting, DJI fostered an open collaborative advantage. Organizational capabilities here acted as coordinators, optimizing the leverage of implicit resources such as brand equity and technological patents. The synergy is captured in the following equation, where the interaction term \( BMI \times OC \) dominates:
$$ SCA = \int_{0}^{T} [BMI(\tau) \cdot OC(\tau)] \, d\tau $$
This integral represents the cumulative effect of coordinated innovation and capabilities over time, leading to sustained superiority.
Table 2 provides a comparative overview of the three phases, highlighting the evolution of key factors.
| Growth Phase | Dominant Organizational Capabilities | Business Model Innovation Focus | Competitive Advantage Type |
|---|---|---|---|
| Survival Initial (2006–2012) | Entrepreneurial Abilities | Value Proposition, Creation, Delivery | Technology-Leading |
| Rapid Expansion (2013–2016) | User Acquisition, Information Processing | Value Delivery, Capture, Proposition | User-Oriented |
| Steady Growth (2017–present) | Resource Integration, Strategic Transformation | Value Capture, Delivery, Proposition, Creation | Open Collaborative |
Further discussion revolves around the resource orchestration framework, which elucidates the “structuring–capability–leveraging” sequence in DJI’s journey. In the survival phase, resources were structured through entrepreneurial initiatives to form viable business models. During expansion, these resources were bundled into dynamic capabilities, such as user-centric innovation, converting business model advantages into durable competencies. In the growth phase, capabilities leveraged hidden resources, like network effects and brand loyalty, to fuel open innovation and ecosystem development. This progression underscores the importance of phase-specific orchestration, where the role of organizational capabilities transitions from driver to transformer to coordinator. The DJI UAV product line, including the DJI FPV model, exemplifies how technological assets are continuously repurposed to sustain relevance.
The implications of this study are twofold. Theoretically, it enriches the understanding of sustainable competitive advantage by integrating business model innovation and organizational capabilities within a dynamic, phase-sensitive model. It moves beyond transaction-based paradigms to a production-oriented view, emphasizing resource utilization over mere ownership. Practically, it offers guidance for technology-based SMEs on aligning innovation strategies with capability development at each growth stage. For instance, startups should prioritize entrepreneurial sensing and prototyping, while expanding firms must invest in customer relationship management and iterative R&D. Mature enterprises should focus on ecosystem building and quality systems to maintain competitiveness.
In conclusion, DJI’s case demonstrates that sustainable competitive advantages in technology-based SMEs emerge from the tailored interplay of business model innovation and organizational capabilities across life cycle stages. The evolution follows a path from technology-leading to user-oriented to open collaborative advantages, driven by capabilities that evolve from drivers to transformers to coordinators. Future research could extend this work through multi-case comparisons or quantitative validations, exploring industry-wide patterns. For now, this analysis provides a robust framework for navigating the complexities of innovation and growth in volatile markets, with DJI’s trajectory serving as an inspirational blueprint for aspiring firms in the UAV and broader technology sectors.