In this study, we describe the dynamic capabilities implemented at tactical and operational levels to win a losing battle: in 1781, the French fleet defeated the British at the Battle of the Chesapeake and opened the way to United States independency. Based on the historical analysis of logbooks of the French and British fleets, centered on the French perspective, we illustrate the power of dynamic capabilities in achieving competitive advantage. By sensing opportunities (e.g., weather changes), seizing them through tactical adaptations (e.g., new orders of battle), and transforming routines (e.g., decentralizing command), the French navy outmaneuvered a theoretically superior British fleet. Our findings enrich dynamic capabilities framework by expanding its applicability to extreme settings of wartime. They also show that the interweaving of different types and levels of dynamic capabilities, combined with ordinary capabilities, is a source of competitive advantage, even with theoretically inferior resources qualities.
