1. Describe the relationship between the external analysis (i.e., Porters 5-Forces) and the question of

resource and capability value (the V in VRIO).

2. Describe the differences between optimal structure, management control, and compensation plan for

pursuing either a cost leadership strategy or a product differentiation strategy. Explain why structure,

controls and compensation ought to vary with the respective strategies?

3. Explain how each business strategy cost leadership and product differentiation neutralize threats

from the external environment (e.g., rivals, new entrants, suppliers, customers, and substitutes).

4. Identify the three fundamental explanations of how vertical integration can create value and discuss

how value is created under each (please include, as part of your discussion, the conditions or

assumptions that underlie each explanation).

5. (Case 1-4 Harlequin Enterprises: The Mira Decision) Harlequins executive team is looking to you for

a recommendation regarding entry into the single-title market. Should the firm enter the market or focus

resources and capabilities elsewhere? Use a brief environmental analysis (Porters 5 Forces) for the

romance fiction industry and a VRIO for Harlequin to support your recommendation either way.

6. (Case 1-3: WalMart Stores, Inc. in 2013) Wal-Marts resources and capabilities include a world-class

logistics system, a reputation for low prices, and uniquely positioned store locations. How were these

resources and capabilities developed over time? Individually, are these resources and capabilities a

source of CD, CP, TCA, or SCA? Bundled together, are these resources and capabilities a source of CD,

CP, TCA, or SCA?