1. Indicate whether each statement below is true or false and briefly justify your answer.a) The Boeing Company may increase the threat of supplier power if it vertically integrates with suppliers of aircraft parts for the construction of the Boeing 787 Dreamliner.True – Vertical integration is desirable when one firm's investment in specific relationship assets has a significantly greater impact on the value created in the vertical chain than the other firm's investment. The threat of further integration by suppliers, if credible, can strengthen supplier power because buyers are forced to accept high inputs or risk direct competition from suppliers (Besanko, Dranove, Shanley, & Schaefer, 2013).b) Value creation by a The company's objective is to improve the benefits for its customers, even if it may cost more. False – Value is created when a producer combines purchased inputs and components to produce a product whose perceived benefits exceed the cost incurred in manufacturing the product. Therefore, the value created is the difference between the perceived benefit and the cost, and is expressed per unit of the final product (Besanko, Dranove, Shanley, & Schaefer, 2013).c) If you produce a sought-after good, you must position it yourself as a cost leader to maintain a competitive advantage. True – A search good is one that has objective quality attributes that the typical purchaser can evaluate before the point of purchase. The potential for differentiation lies largely in improving observable product characteristics. But if buyers can discern between different offerings, so can competitors, increasing the risk that improvements will be imitated (Besanko, Dranove, Shanley, & Schaefer, 2013).d) When the countdown timer provides specific information. .. middle of document ......registered with a company is their trademark and cannot be altered or modified without the prior permission of the owner. Once the legal restriction is ensured, it becomes exclusive and therefore has lasting value. The company that owns this asset must be able to use it efficiently in order to derive economic benefit from it. Legal restrictions pose a significant obstacle for any company wishing to imitate a market leader and enter the market using tactics similar to those of the incumbent. If deployed effectively, legal restrictions can be very effective in achieving sustainable competitive advantage and allowing a market leader to maintain its position in the market (Besanko, Dranove, Shanley, & Schaefer, 2013).ReferencesBesanko, D., Dranove, D., Shanley, M. and Schaefer, S. (2013). Economics of strategy. United States of America: John Wiley & Sons Inc.