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Companies operating in the sphere of high technology face an environment characterized by incessantly changing technologies and intense global competition. Especially firms developing new software act in uncertain and dynamic environments. These dynamic environments demand that firms be innovative with respect to their product offerings. A dynamic capabilities approach is applied to highlight how and why certain firms have competitive advantage in situation of rapid and unpredictable change. In this book was investigated which dynamic capabilities are critical in product development process of high-tech small and medium-sized firms specializing in new software development. Findings of the research contribute on the debate on the role of dynamic capabilities in firm success. Finding of critical dynamic capabilities in software development process gives guidance as to the best suited management approaches in software industry. Projects that successfully develop these dynamic capabilities may be far more likely to realize their goals to see their visions embodied as products in market.