This project is intended to investigate the fundamental explanandum in strategy, performance heterogeneity of firms, and unveil its explanans. The first part responds to a recent call for a more explicit focus on empirically validated stylized facts in strategy research, and provides a cross-disciplinary review on performance differentials of firms over time. After building the necessary groundwork for a ‘fact before theory' style, this project seeks to explain the observed heterogeneity in a dynamic fashion. Therefore, the second part focuses on the dynamics and systematically assesses both the theoretical and empirical dynamic capabilities view (DCV) literature. Building on the gaps identified in previous two parts, this project will continue with empirical investigations dealing with three enduring questions "How do firms differ?", "Why do firms differ?", and "Do differences persist?". This project will contribute to the competitive strategy literature especially concerning the dynamics.