The role of dynamic capabilities in the strategic adjustment process of internet financial enterprises in China

Abstract

In China's Internet finance industry, companies face a complex and uncertain environment that poses significant adaptive challenges. The strictness of regulatory policies, the rapid development of technological innovation, and the sharp changes in consumer preferences have profound implications for the survival and development of enterprises. Many Internet finance companies have struggled to cope with these challenges, leading to hindered business development, a significant decline in profits, and even withdrawal from the market. This thesis focuses on how Internet finance companies make strategic adjustments to adapt to the complex and variable external environment and investigates the role of dynamic capabilities in this process. The research categorizes the strategic adjustment process into three phases: strategic analysis, strategic planning and selection, and strategic implementation and evaluation. Throughout this process, the three components of dynamic capabilities - sensing capability, seizing capability, and transformation capability - have been identified as crucial success factors. Sensing capability assists the company in rapidly and accurately identifying changes in the external environment. Seizing capability enhances decision-making and execution efficiency through decentralized management and resolution mechanisms. Transformation capability mitigates the challenges of resource acquisition by facilitating flexible resource allocation and effective training mechanisms, expediting the deployment of new strategies. The findings indicate that Internet finance enterprise, through effective strategic adjustments, has sustained business growth and core competitiveness despite the impact of external environmental changes and regulatory policies. This study also reveals how dynamic capabilities ensure the success of the strategic adjustment process and their indispensable role throughout it.