Artificial Intelligence as a Strategic Capability: Transforming Business Models and Enhancing Organizational Competitiveness

Abstract

Artificial intelligence (AI) is increasingly recognised as a source of organisational transformation, yet adoption alone does not guarantee sustainable competitive value. This paper develops an integrated framework explaining how organisations convert AI-related resources into competitiveness through business model transformation. Drawing on a conceptual synthesis of selected scholarly literature, it combines the resource-based view, dynamic capabilities theory and the business model innovation perspective. AI strategic capability is defined as the coordinated combination of technological infrastructure, data capability, human expertise, leadership, organisational routines and responsible governance. The framework proposes that this capability transforms value creation, value delivery and value capture, thereby improving efficiency, innovation, customer value, responsiveness and differentiation. Business model transformation is positioned as the principal mediating mechanism, while organisational readiness, environmental dynamism and responsible AI governance form important boundary conditions. The paper contributes by connecting previously fragmented research on AI capability, business model transformation and organisational competitiveness within a process-based explanation. It also provides managers with a practical basis for aligning AI investment with strategy, organisational redesign and responsible implementation