This paper used the system dynamics methodology to integrate the dynamics of technological innovation into a formal model of business strategy. This model- known as the Technology Ramp- Up Stimulator (TRUSIM)- specifically focuses on the evolution of technological performance and competitive structure. TRUSIM links existing firm management system dynamics structure to new modules representing the dynamics of innovation and that of technological capability. This model will be used to explore several typical scenarios of industrial evolution, such as technological lock- in and first- mover disadvantage.