Guillermo Furniture Store Concepts Paper

RUNNING HEADER: Guillermo Furniture Store Concepts Paper  

Guillermo Furniture Store Concepts Paper  
Deunkai Soukkaseum
University of Phoenix
September 05, 2012
Dr. Yvan Nezerwe

Guillermo’s Furniture Store Scenario
The location of the scenario is Sonora, a beautiful city in Mexico and a vacation destination. In Sonora there is huge furniture manufacturing operated by Guillermo Navallez years in this local. This local provides a supply of timber for making variety of tables and chairs, and inexpensive labor. Therefore he priced the products to create marginal profits for the handcrafted products for such quality. However in the late 1990s two factors combined to cause a large impact Guillermo’s business. There was competitor from overseas that has entered the furniture market with high-tech approaches to produce furniture to exact specifications. The production was efficient, and cost effective to be sold with rock-bottom prices. Another factor is a population boom in Sonora influence had expansion of the city with inexpensive housing, and city developments cause arrival of new people and jobs. This impacted substantially as it raises cost for labor diminishing of profit margins for Guillermo’s furniture business. With research on his competition adapting to changes shows them combining into larger organizations through merger or acquisition. Guillermo does not like the notion of consolidation, merging or selling to larger competitor and therefore retired from financial drain from the overhead costs.
In a business such as Guillermo’s furniture manufacturing key financial factors must become essential to sustainability of the company. Using these financial and accounting principles and concepts is necessary for growth, and survival. Understanding the use of his income statements and the value of...