'Lateral business investment' has gained increasing attention among traditional industries in Taiwan. It is a strategic model which helps create strong network competence through industrial network integration and strategic position change. However, the benefits deriving from adopting 'Lateral business investment' have not yet been well documented. This research aims to conduct a longitudinal study on this issue via an investigation of a selected Taiwanese traditional fabric firm. A qualitative research methodology was applied in historical documentary data collecting, observations and in-depth interviews with key managers. The result suggests that the construction and application of multilateral capabilities play a crucial role in value innovation from the strategy of Lateral Business Investment. Whereas, the barriers caused by network inertia could be reformed via multilevel organizational learning process and dynamic organization routines.