Abstract: From the view of dynamic evolution, this paper does a longitudinal case study of Folangsi to explore specific mechanism and management connotation of enterprises to promote the upgrading of service innovation capability through dynamic service supply chain integration strategy. The results show that, driven by the dynamic environmental factors, that is, market pressure and internal power, the service supply chain integration strategy of the enterprise has gone through three stages, including the internal integration-oriented, resource acquisition-oriented and multi-network collaborative reconstruction-oriented, which leads to the transition and sequence effect of service innovation capability. The study reveals the basic logic of service innovation capability upgrading, and develops the enlightenment on the relationship between service supply integration strategy and service innovation capability, which has important reference value for the sustainable innovation development of Chinese enterprises.