So it became obvious that the Husky machine only presented a cost advantage if annual production was to be between ~101M and ~136M ? per machine. Though there was no preform production data in the case, we assumed the manufactures that would fit in this window would be rather small. Assuming the managers of the preform manufacturing plants are rational individuals, with fiduciary relationships to their firms, and a very small number of them produce only 101M ? 136M/machine, there would have to be some other reason for purchasing the Husky machines...
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This would tend to imply that the market for injection molding systems is vertically differentiated. If they were horizontally differentiated, Husky could not have maintained a higher price relative to its competitors and sold any units. The case touched on this, but I think the analysis showed clearer the quality of the husky machines...
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