4. What do you recommend? Jaguar Electronics, Inc. is a specialized electronics firm located in Charleston, South Carolina in the United States. The company was founded in 1965 and has enjoyed success and modest growth as a supplier of components to large manufacturers of specialty electronic-mechanical devices. Recently the company’s management has decided to begin manufacturing and marketing a product called the ‘Airflow’. The Airflow is manufactured by assembling two component parts: (1) mechanical assemblies (MA), which are purchased from a company in Belgium; and (2)

electronic assemblies (EC) manufactured by Jaguar Electronics at its Charleston facility.

Jaguar Electronics has manufactured and supplied the electronic assemblies to several national manufacturers of products similar to the Airflow for several years. Most of the consumer demand for the final products comes from areas enjoying a relatively warm climate throughout the year. Accordingly, the manufacturers of those products have sold their goods with great success throughout the southern and southwestern United States. The population and economic growth in these areas have contributed greatly to the success of this type of consumer product.

The man largely responsible for Jaguar Electronics’

proposed move into manufacturing and marketing Airflow is the company president, Mr Smith. He has spent his entire career in the electronics industry and was with Jaguar Electronics for several years before becoming its president. His reign as president has been very successful. However, he has viewed the impressive sales growth of EC units with mixed feelings. As a supplier of EC components, Jaguar Electronics has prospered from the growth in sales of products such as Airflow. However, Smith has always felt that his company was not reaping all of the benefits available in sales to the consumers. At the same time he felt that Jaguar Electronics did not have the resources to compete successfully with the large firms that dominate the US market.