Dynamic capabilities of early-stage firms: Exploring the business of renting fashion

  • Marcus Adam Reutlingen University
  • Jochen Strähle Reutlingen University
  • Matthias Freise Reutlingen University


In recent years the share economy has gained widespread success across different industries. Since small firms and new ventures obtain fewer resources, an increased focus on service allows them to differentiate and compete with cost pressure in traditionally manufacturing based industries. There still is a lack of understanding how these firms manage to successfully shift towards service-oriented business models. This paper adopts a dynamic capabilities approach to examine the particular microfoundations that underlie sensing, seizing and reconfiguring dynamic capabilities of early-stage service firms within a traditional retail market. The context of this study is the fashion industry. It is an ideal setting since it is characterized by severe competition, short life cycles, strong cost pressure and high volatility. There are few but increasing examples of entrepreneurial initiatives that try to compete by providing offers to resell, rent or swap clothes. Qualitative data of five early-stage fashion ventures is analyzed. Findings reveal that the ability to develop and maintain long-term relationships is essential. It has also been found crucial to acquire knowledge from external network partners, delegate tasks and share information. Furthermore, skills for interacting with customers and adopting consumer feedback are critical. This study provides empirical evidence of dynamic capabilities of early-stage firms and contributes to knowledge on the factors that facilitate servitization in traditionally manufacturing based industries. For practitioners, the presented microfoundations provide a framework of critical tasks that allow them to develop and maintain a service-oriented business model.

How to Cite
ADAM, Marcus; STRÄHLE, Jochen; FREISE, Matthias. Dynamic capabilities of early-stage firms: Exploring the business of renting fashion. Journal of Small Business Strategy, [S.l.], v. 28, n. 2, p. 49-67, june 2018. ISSN 2380-1751. Available at: <http://libjournals.mtsu.edu/index.php/jsbs/article/view/834>. Date accessed: 18 july 2018.