Strategy: make here, sell abroad; Harman International reverses conventional business wisdom.

Strategy: Make here, sell abroad

'Today we're going to discuss the business strategy of High-Fly Hi-Fil Inc.," said the professor to his second year MBA class as they plunged eagerly into a case study. "Schwartz, what do you think?"

"Too fictional. I mean, here's a company that's determined to manufacture stereo equipment in the States when everyone else is going off-shore. Asian companies--and American companies making their products in Asia--will eat them alive," says Schwartz.

At this, Bullwinkle jumps in: "And that's not the only unrealistic thing. This company actually seems committed to selling a significant portion of its output in Japan. Transportation and labor costs will cripple them and everyone knows about the cultural barriers to selling American products in Asia."

Pipes their friend, Featherlight: "And look at this: it says here that High-Fly makes over 600 different speaker models selling from $2.50 each to $40,000 a pair. No one could reasonably manage an operation like that. Think of the inventory problems!"

"Very good, class. Anything else?"

"Just one thing," says Schwartz. "The company's …