Morgan Components

Case Solution

Luis Palencia, Albert Fernandez
IESE ()

A product manager for a major automotive supplier has to decide whether to reduce the price of a component for a major automaker by 25%. Production has not started yet, but significant resources have been allocated. On the other hand, the customer is the key to corporate strategy. Furthermore, the information system does not clearly measure the economic impact of the decision. Would Morgan Components better accept the contract? The product manager is judged by accounting numbers, and those can look bad if accepted, even if the company is doing better.

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