Reference no: EM132970312

Economies of scale and economies of experience (learning curve) are important for assessing barriers to entry. However in the car industry, U.S. manufacturers such as Ford Motor Company and General Motors Company have high economies of scale (being the largest producers) and all the benefits of the learning curve (having been in the business for almost a century). Despite these advantages, and the barriers they confer, foreign car producers as well as a startup EV producer have entered the U.S. market and have increasingly gained market share over.

Which of the following statements provide reasons to help explain why this has happened?

I Some foreign producers have relative cost benefits of better manufacturing technologies (such as Toyota Motor Corporation's lean manufacturing).

II Some new startup producers have relative quality (i.e., differentiation) benefits of EV technology (such as Tesla Inc.'s battery chemistry and design innovations).

III Some foreign and startup producers such as Toyota and Tesla have created more value from their internal operations than Ford or G.M.