Shanghai Highly (Group) Co., Ltd. is a developer and manufacturer of home air conditioning compressors and other related products. In 2013, the annual production capacity for its main products (home air conditioning compressors) made impressive advances globally. However, intense competition among air-conditioning manufacturers has led to a reshuffle among manufacturers of home air conditioning compressors. As a company focusing on manufacturing home air conditioning compressors, Highly has lost its dominant position in the market, and its return on investment has hovered around 6% for years. To achieve better performance, Highly must address multiple challenges and questions. Should the company begin producing complete air conditioners? Should it expand production capacity for its home air conditioning compressors? How can Highly solve problems like high labor costs and fluctuations in raw material prices? After returning from a visit to Japan, Highly’s chairman, Mr. Shen Jianfang, must now consider these very issues.