88 Part 1: Strategic Management Inputs
Coca-Cola company encourages its employees to be a part of these social-media based
discussion as a means of positively influencing the company’s reputation. Driving the
nature of these conversations is a set of social media “commitments” that Coca-Cola
employees use as a foundation for how they will engage with various social media.
Being transparent and protecting consumers’ privacy are examples of the commit-
ments the firm established.^633-2b Capabilities
The firm combines individual tangible and intangible resources to create capabilities.
In turn, capabilities are used to complete the organizational tasks required to produce,
distribute, and service the goods or services the firm provides to customers for the pur-
pose of creating value for them. As a foundation for building core competencies and
hopefully competitive advantages, capabilities are often based on developing, carrying,
and exchanging information and knowledge through the firm’s human capital.^64 Hence,
the value of human capital in developing and using capabilities and, ultimately, core com-
petencies cannot be overstated.^65 In fact, it seems to be “well known that human capital
makes or breaks companies.”^66 At pizza-maker Domino’s, human capital is critical to the
firm’s efforts to change how it competes. Describing this, CEO Patrick Doyle says that, in
many ways, Domino’s is becoming “a technology company ... that has adapted the art of
pizza-making to the digital age.”^67
As illustrated in Table 3.3, capabilities are often developed in specific functional
areas (such as manufacturing, R&D, and marketing) or in a part of a functional area
(e.g., advertising). Table 3.3 shows a grouping of organizational functions and the capa-
bilities that some companies are thought to possess in terms of all or parts of those
functions.Table 3.3 Example of Firms’ Capabilities
Functional Areas Capabilities Examples of Firms
Distribution • Effective use of logistics management techniques • Walmart
Human Resources • Motivating, empowering, and retaining employees • Microsoft
Management Information
Systems- Effective and efficient control of inventories through point-
of-purchase data collection methods- Walmart
Marketing • Effective promotion of brand-name products- Effective customer service
- Innovative merchandising
- Procter & Gamble
- Ralph Lauren Corp.
- McKinsey & Co.
- Nordstrom Inc.
- Crate & Barrel
Management • Ability to envision the future of clothing • Hugo Boss
- Zara
Manufacturing • Design and production skills yielding reliable products - Product and design quality
- Miniaturization of components and products
- Komatsu
- Witt Gas Technology
- Sony
Research & Development • Innovative technology - Development of sophisticated elevator control solutions
- Rapid transformation of technology into new products and
processes - Digital technology
- Caterpillar
- Otis Elevator Co.
- Chaparral Steel
- Thomson Consumer Electronics