If you're a guitar teacher, you've probably run into this problem more than once: out of the box, new student guitars, especially from the Central Europe, are often incredibly badly set up!
Here's a recent example: yesterday, we got a brand new 3/4-size guitar from a large European online music store. The guitar sounds good (it has a solid cedar top), but it's impossible to play! The strings are so low as to almost sit right on top of the frets, and the resulting buzz is phenomenal. Another large contributor to that buzz is the fact that some of the frets, especially the second and third, are really way too high, making any note fretted on the first fret buzz badly.
I've seen this too many times: often the guitar is otherwise all right, the fit and finish is good, but the setup is terrible, rendering the brand new instrument useless! Action too high or too low, high frets, low frets, factory installed strings seemingly made of fishing line.
Fortunately, I have worked as a luthier, and I have the necessary tools and experience to turn this disaster into a usable guitar. With my fret rocker I can find the too-high frets and also know when I've got them where they need to be; with a fretting hammer I can pound those bad boys in line; some maple veneer, cut into thin strips, helps to raise the action (the height of the string above the fingerboard) to a more normal range, and, finally, some new strings also help to make the guitar sing. Otherwise, I would've just had to send the guitar back, perhaps for the next unfortunate buyer to struggle with.
What really baffles me about this is, how can the guitar factories keep doing this, sending out these very badly set up guitars? Don't they get a large proportion of their product back as customer returns? If you're going to make a new guitar from scratch, wouldn't it be a relatively easy and quick part of the process to set it up so that it can be played? What's going on here?