We proposed an analytical framework from the perspective of dynamic capabilities (DC) to examine how a Japanese retail company had obtained and sustained competitive advantages in an overseas market. We expanded the DC framework of Teece (2007, 2014a) to analyze the case of Chengdu Ito-Yokado (CIY), particularly on how DC factors had influenced CIY’s business model (BM) from the introduction to growth stages, and to explore the relationship among those factors. We confirmed that the differentiated BM was due to DC which (re)generated BM’s transformation in sustaining the competitive advantage. Therefore, we have validated the preliminary analytical framework through the case study.