This study was conducted with the aim of presenting a coopetition strategy framework for the watch retail industry using a dynamic capabilities approach. The research method was qualitative and based on grounded theory with a paradigmatic approach. The study is categorized as developmental-applied research. The research population included experts and specialists in the field of coopetition and watch retail, and the participants consisted of eight individuals selected through the snowball sampling method. The data collection tool was a semi-structured interview. This study presents a framework for coopetition strategy based on the dynamic capabilities approach, which encompasses sensing, seizing, transforming, outcomes, and intervening conditions. The sensing components include coopetitive actors, business characteristics, coopetition features, organizational culture, and customer history. Furthermore, the required dynamic capabilities consist of coopetition management capability, knowledge sharing capability, networking capability, managerial capabilities, agility capability, research and development capability, and co-creation capability. The findings also proposed several solutions, including experience and knowledge sharing, resource and capability sharing, human resource empowerment, strengthening communications, technology sharing, balancing competition and cooperation, managing collaboration risks, and precise competitor market insight. The identified outcomes of implementing a coopetition strategy include business performance, market performance, product performance, competitive performance, and customer behavior. Additionally, the findings revealed that external factors such as market conditions, competitors, technology, regulations, and competition intensity influence the coopetition process.