2.7 Identify how changes in the external environment affect the OM strategy for a company. For instance, discuss what impact the following external factors might have on OM strategy:

a) Major increases in oil prices.

b) Water- and air-quality legislation.

c) Fewer young prospective employees entering the labor market.

d) Inflation versus stable prices.

e) Legislation moving health insurance from a pretax benefit to taxable income.

2.4 The text provides three primary strategic approaches (differentiation, cost, and response) for achieving competitive advantage. Provide an example of each not given in the text. Support your choices. (Hint: Note the examples provided in the text.)