Muhammad Rafique - National University of Science and Technology, Islamabad, Pakistan
Richard David Evans - University of WestminsterLondon, United Kingdom
Muhammad Tahir Nawaz - National University of Science and Technology, Islamabad, Pakistan

Firms operating in innovative environments often keep track of their strategies (Blue Ocean and Red Ocean) by keeping a balance of market exploration and exploitation. There comes a point where companies feel that transformation of their capabilities to adopt a contrasting strategy requires capability transformation. This study addresses this process through absorptive capacity. Our study argues the pivot role of absorptive capacity by effective utilization of resources in capability transformation to adopt the contrasting strategy while keeping a balance of exploration and exploitation in the organisation

absorptive capacity; innovative environments; business strategy; red and blue ocean; capability transformation