Refrigerator Adaptations (Scenario)
Cold-Aire Inc. manufactures refrigerators from its facilities in the United States and China and ships them to retail stores around the world. Kitchen sizes vary around the world, and as a result, refrigerator sizes must vary as well. U.S. retailers want large refrigerators, while European and Asian retailers demand smaller units. Cold-Aire manufactures over 20 different models of refrigerators, which often vary in size by only a few inches. Cold-Aire managers are concerned that the firm is losing money because of product adaptations. Cold-Aire management is meeting to discuss the various cost-saving options for the firm.
Which of the following questions would be the most important for Cold-Aire managers to evaluate when determining how the firm could reduce production costs in a single market?
◦ Has the demand for Cold-Aire refrigerators declined in recent years?
◦ Are customized Cold-Aire refrigerators as user friendly as the ones that are not?
◦ Can Cold-Aire standardize its refrigerators?
◦ Are Cold-Aire refrigerators likely to have greater demand in warmer countries than in colder regions?
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