Assume the information from Question $1$ Part A is correct. Cryocool$$s cooling systems are

assembled using engineered components produced by third parties. One of the most expensive

inputs is the fan system, which Cryocool sources in approximately equal quantities from two

independent companies, FANA and FANB, who are believed to have EBIT similar margins to

Cryocool$$s$.$ When Cryocool$$s production team backward engineered Cooltex$$s system, they

found that Cooltex uses a lower precision, but cheaper, fan system from FANC. The production$2$

team$$s report to the COO recommended acquiring FANC to raise their rival$$s production costs, as

they believe FANC is the sole supplier of fans to Cooltex. The CFO believes a better solution

would be to acquire FANA so they could capture the hefty margins on fans.

Do you agree with the COO, the CFO, both, or neither? Why? Please be sure to use substantive

concepts from the Theory of the Firm to guide your answer.