Firms must be able to adapt and evolve their capabilities due to the dynamic and sophisticated business environment in order to sustain their advantages and keepgrowing. A firm must continue to provide its existing products (goods and services) in the market, while at the same time to keep developing its business and growing. How do firms maintain their competitive advantages and adapt them in their ecosystems? This requires firms to innovate in order to adapt and grow.
Adaptability, or the ability to consistently adjust to the changing environment, becomes a necessity for all firms. More importantly, firms must adapt quickly and effectively, which requires agility. A firm needs to align and properly manage its configuration (business strategy, innovation process and structure) to ensure performance. Alignment of the components would lead to performance, or denoted in this study as Business Model Effectiveness.