Why is it important to compare and analyze firms within their industry?
2. What are the three ways in which firms can establish a competitive advantage, according to the reading?
3. In Interactive Illustration 1 of the Core Reading, what happens if Harnischfeger increases the price to $6 million?
4. What is a value chain? How can it be used to analyze relative costs?
5. How are cost drivers used to assess competitive advantage?
6. Refer to Interactive Illustration 2 in the Core Reading. Imagine that Harnischfeger decides to use higher-quality materials in order to produce a longer-lasting crane. This decision slows the production process and increases the supplier cost to $2.5 million. International Paper agrees that this improvement translates into fewer repairs to its cranes and increases its willingness to pay to $7.8 million. Does this change give Harnischfeger an advantage over Kranco?
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