Guillermo Furniture Store Concepts Paper

Guillermo Furniture Store Concepts Paper Many businesses face circumstances that require concepts and principles. There are many principles that should be applied to running a good business. Competitors are looking for the competition and as a business person one cannot expect the other party to be economically rational with the competition (Emery, Finnerty, & Stowe, 2007). The Guillermo Navallez owner of Guillermo Furniture Store located in Sonora, Mexico has been in business for years making furniture with a good supply of timber for the variety of tables and chairs, relatively inexpensive labor prices, and its handcrafted products, is known as one of the largest furniture manufacturing stores in North America. In the late 1990’s the furniture store took a shocking turn due to the competition from overseas that entered the business using a high tech approach causing a decrease in Guillermo’s business. In addition, Guillermo watched how his competitor woke up the community from its rock-bottom prices, and how one of the largest retailers in the nation’s headquarters down the road influenced and expanded considerably which raised the cost of labor substantially causing Guillermo’s profit margin to shrink as prices fell and costs rose (University of Phoenix, 2009). Guillermo is now faced with making some decisions to help his business. Guillermo should be wise about his decisions. It may be hard to swallow the principal of self-interested behavior (Emery, Finnerty, & Stowe, 2007), but in reality money isn’t always everything and it is best to choose what is right for the business especially if the competition is not easy. As a business person one would need to know their values. An opportunity cost is the difference between the value of one action and the value of the best alternative (Emery, Finnerty, & Stowe, 2007). One reasonable approach Guillermo should look into is guidance to see what the competitors are doing to capitalize over other furniture markets. Guillermo carefully researched the competition to learn that many of them are consolidating into larger organizations by merger or acquisition (University of Phoenix, 2009). Since this is not a move that Guillermo would want to take, and he doesn’t want the cost of opening another store which would require him to expand the management’s responsibilities. At this point to avoid being forced out of the furniture business due to the competition, a look into the high tech solutions is of interest to help the business. Guillermo should evaluate his options to decide what is right for the business. Through research will provide some vivid information on how the use of a computer laser lathe, and why this tool would be a good investment for Guillermo’s furniture business, and how this could greatly benefit the business assembly line of the products which will help increase sales. If everyone does what their best at, this will help the business. With the new technology running on a 24-hour basis cutting wood precisely, this will help with the production costs because products are prepared and available upon request. Guillermo is impressed with the changes he is implementing into making the business grow and stand against the competition. He spoke with his distributors about becoming a representative since one his competitors are only distributing in North America. Guillermo believe that this way of networking with the distributors he could retain some of the high end custom work by moving his furniture store from manufacturing to distribution (University of Phoenix, 2009). Guillermo should use accounting budgets’ and performance reports to help with decision making with the changes he is looking to make with the furniture business. The use of these tools will help with the estimating, revenue and expenditures for the business to run effectively. Accounting statements will help with the maintaining of records and prepare financial reports to help make sound business decisions. The purchase of the high tech computer controlled laser lathe is an entry to the sale for Norway. The statement of cash flow will project the required product cost, returns, and the labor which will predict the profit for the business. Guillermo would need to make a decision that is right for his business so that he may gain from the net revenue and return on investments for profitability. Performance is important for the business. The performance is like a big picture of the business income and its use. Performance reports provide income reports which can be used for tax purposes, and these reports provide an overall understanding of the business performance. With the statement of cash flows this will provide the tracking of how money is spent ranging from operating cost, investments, finance activities etc. For these reasons Guillermo is making decisions for his business to prosper. In today’s market most businesses rely on technology for the business function. The high tech computer controlled laser lathe is a major investment to make, but would be the best decision for Guillermo and the plans he has for his business. In fact, since he is getting in the business of distribution, this would help with the production. Behavior is important, and Guillermo has one advantage over his competitors because he has a patented process for creating a coating for his furniture (University of Phoenix, 2007), and with this process it creates a common flame-retardant, stain resistant (Emery, Finnerty, & Stowe, 2007).

Reference
Emery, D., Finnerty, J., & Stowe, J. (2007). Corporate financial Managment (3rd ed.). Retrieved from https://ecampus.phoenix.edu/content/eBookLibrary2/content/eReader.aspx.
University of Phoenix (2009). Guillermo Furniture Store Scenerio. Retrieved from https://ecampus.phoenix.edu/content/eBookLibrary2/content/eReader.aspx