1. Why is it important to study the internal resources, capabilities and activities of a firm? What insights can be gained?

2. In the past few years, McDonald's has made a lot of changes in its menu, adding more healthy choices and more higher-priced items such as those offered in McCafe ( e.g., premium-roast coffee, antibiotic-free chicken, and fruit smoothies) and has also enhanced its in-restaurant services ( e.g., free unlimited Wi-Fi and upgraded interiors). Did McDonald's new priorities in terms of a broader healthier menu and an improved in-restaurant experience -require changes to its traditional value chain activities? If so, how? Try to be as specific as possible comparing the McDonalds from the recent past (focusing on low-cost hamburgers ) to the McDonalds of today.

3. The resource-based view of the firm identifies four criteria that managers can use to evaluate whether particular resources and capabilities are core competencies and can, therefore, provide a basis for sustainable competitive advantage. Are these measures independent or interdependent? Explain, If (some of) the measures are interdependent, what implications does that fact have for managers wanting to create and sustain a competitive advantage?