ABSTRACT
Jarrow Furniture was a large firm by any standards; exports had always been important to it. Home sales of the industry had been static for decades; demand for the product was very income-inelastic so that total UK consumption actually fell as consumers’ incomes rose. Devaluation provided Jarrow with a degree of competitive advantage where it was selling its own furniture in competition with firms outside the UK. In export markets, the objective at the time of devaluation was to maximise the additional profit per unit of sales in the short run, provided that long-term plans and objectives were not significantly affected by the action taken and export sales were not reduced. Jarrow Furniture believed that, in general, its market information was adequate. It had figures for the trend of sales and of market share in each overseas market, together with general information about trends in furniture design and in consumer attitudes towards those trends.
