Dynamic Capabilities Impact on Innovation: Niche Market and Startups

The purpose of this study is to understand innovation of startups operating in a niche market.  Through a review of previous research works, a conceptual model and propositions are developed, where illustration of a company case is used to exemplify this model. It reveals that a research gap exists regarding startups in a niche market with dynamic capabilities and breakthrough innovations as a source of success. This study reflects on the potential relationship between dynamic capabilities and breakthrough innovation of a startup and its subsequent effect on the performance of the startup in a niche market. It has proposed that dynamic capabilities work as a foundation for startup to develop a breakthrough innovation. It also proposed that in a niche market, both core competency and industrial network are crucial for a startup to scaleup, where breakthrough innovation works as a pathway to acquire consumer acceptance.