Since the mid 90’s, the business model concept has gained prominence as a unit of analysis in innovation studies. A growing consensus among scholars reveals that business model innovation is key to firm performance, which has brought scholars researching business model to focus on issues related to business model renewal and innovation in incumbent firms (e.g. Chesbrough, (2007) and (Johnson, Christensen, & Kagermann, 2008). Despite the growing popularity of the term, the study of business model innovation remains difficult due to the ambiguity and diversity of its definitions, components, antecedents, and outcomes. More research is needed to clarify “the mechanisms and processes of business model innovation and change” (George & Bock, 2011: 88). These challenges reveal the need for a better understanding of the meaning and operationalization of this construct (Chesbrough, 2010). This article proposes a conceptualization of business model innovation as a dynamic capability that ultimately enhances a firm's ability to gain and sustain a competitive advantage. The research claims that dynamic capabilities are embedded in organizational processes and catalyze organizational change (see Ambrosini & Bowman (2009)). These capabilities allow the firm to reconfigure and refresh its resources tock and adjust its operations to changing business environments in order to achieve competitive advantage.