In Figure 5-2, Company A and Company B manufacture the same product. Each is able to sell its product for $1300. However, Company B can manufacture the product for $400 because it is more productive than Company A, which produces the same product at a cost of $700. The productivity difference gives Company B at least two competitive advantages: (1) It can lower its price for the product below that of Company A and still make a profit; and (2) its greater profit margin gives Company B more capital to reinvest in upgrading its facility, equipment, and personnel, which in turn will improve its competitiveness even more.