Dynamic competitiveness refers to the ability of enterprises to adapt, integrate and restructure organizational resources to keep up with the requirements of environmental changes. Dynamic refers to the ability of enterprises to continuously update their own capabilities in order to adapt to the ever-changing market environment. Capability refers to the key role of strategic management in updating their own capabilities. The theory of dynamic competitiveness is proposed to overcome the inertia of enterprise resources and the rigidity of core capabilities. It emphasizes two key aspects that have been ignored in previous capability theories, namely dynamics and capabilities. The theory of dynamic competitiveness highlights the dynamic nature of competition among enterprises, emphasizes “temporary first-mover advantage” and “changes in competition rules”, and emphasizes timely abandoning original advantages and establishing new advantages before competitors counterattack. It is believed that this is the key for enterprises to obtain above-average profit margins. The theory of dynamic competitiveness believes that enterprises will rely more on constantly creating a series of short-term advantages to obtain long-term above-average profit margins. The winning principle of traditional competition is how to seize opportunities to eliminate competitors, while the key to dynamic competition is how to seize opportunities to abandon their original advantages and establish new advantages. An enterprise is an entity that has certain competitiveness and decision-making rules at any point in time. As time goes by, these competitiveness and rules are changed as a result of purposeful efforts to solve problems and random events, and the market, as the corresponding economic mechanism of natural selection, ultimately determines which enterprises are profitable and which are not, and eliminates the laggards.
In fact, the essence of dynamic competitiveness is the knowledge hidden behind it. When the knowledge possessed by the enterprise no longer adapts to changes in the external environment, it is necessary for the enterprise to reshape its own competitiveness. The process of changing the capabilities of an enterprise is essentially a process of learning and pursuing new knowledge for the enterprise, and the result of the change in the capabilities of the enterprise is the establishment of a new knowledge structure for the enterprise. Therefore, since enterprises are always in a “turbulent environment”, it is necessary for enterprises seeking sustainable development to constantly update their capabilities. The only unique resource that an enterprise has is knowledge. Other resources, such as funds or equipment, will not bring any uniqueness. What makes an enterprise unique and serves as a unique resource for an enterprise is its ability to use various knowledge. It is based on the above understanding that the theory of dynamic competitiveness believes that the most important asset of an enterprise is the ability based on organizational knowledge.