The three main areas in the value chain where significant differences in the costs of competing firms can occur include O depreciation costs, work force compensation costs, and marketing costs. o the nature and make-up of their own internal operations, the activities performed by suppliers, and the activities performed in the forward part of the industry value chain (especially distribution-related activities) O production costs, sales and marketing costs, and the costs of support activities o operating-level activities, functional area activities, and administrative activities variable cost activities, fixed cost activities, and administrative activities