Guillermo Furniture

Guillermo Furniture Store
After years of successful operation, Guillermo Furniture Store is facing its toughest challenge. With the new foreign competitor and the sudden growth in the small community, Guillermo’s business has suffered significantly. The largest retailers in nation have moved their headquarters to Sonora and finally Guillermo has lost competitive advantage due to significant increase in the cost of labor. Guillermo Navallez has realized that he does not have the business advantage with respect to the new circumstances.   To create that competitive advantage once again, Guillermo has three alternatives. The decision that Guillermo is facing is whether he should operate as a hi-tech manufacturer, team up with a foreign manufacturer and sell furniture as a broker for a Norway firm and coordinate the distribution channels for that firm or continue with the current operation and use the new-patented technique of coating furniture.
The concept of value is one in which the marketer seeks to increase the benefits and usefulness of the product or service to the customer. In the context of Guillermo Navallez, the competitor from abroad is able to make and sell furniture to customers that exactly match the specifications of the customers and that also at rock bottom prices. Similarly, the largest furniture firms in Mexico are able to provide greater value for money to the customers than what Guillermo Navallez is able to provide. Finally, Guillermo Navallez is seeking to increase customer value by coating his furniture with his patented process. The main problem for Guillermo Navallez is that the competitor from abroad and Mexico's largest furniture makers are able to provide far greater value to the customers than what he can provide. The concept of economic efficiency allocates resources across activities in a manner that maximizes the value they create. In case of Guillermo Navallez, clearly the automatic method of the foreign competitor efficiently...