Hirt Systems Company is a U.S. company that has a strong market in the United States for securing computer terminals. It envelops such terminals with lead to prevent them from emitting microwaves that can be picked up by “spy receivers.” The key to Hirt’s success is its design know-how. Because the application is labor intensive, models produced abroad are significantly cheaper. Hirt has been affected by these lower priced models, though it has held its own because its design is superior. As part of its expansion
Program, Hirt is considering constructing a new assembly plant. Discuss the relative benefits and risks of building it as a Hirt-owned concern in a Third World country under the direction of Hirt’s U.S. management and building it in the United States.