Guillermo Furniture Store Concepts

Guillermo Furniture Store Concepts
For Guillermo Navallez of Guillermo Furniture Store, making furniture was not about competition, but about the handcrafted quality that he was able to supply to his customers. In the late 1990s, there was a competitive and economical change that made him start to rethink how he ran his company in order to grow his company’s profit margin. Guillermo is aware that he needs to make a change for his company to succeed, but how to go about that change is the problem. Reviewing and learning what his competitors are accomplishing is just one step in the direction of change. There are risks involved in making changes, but if those changes can give a high return in exchange then the risk is waived in the company’s eyes.
Concept of the Competitive Economic Advantage
Based on the Behavioral Principle, Guillermo Navallez is looking at what his competitors are doing for guidance of how he should move forward (Emery, Finnerty, & Stowe, 2007, p. 23). His newest competitor is an overseas company that is technologically advanced compared to the Guillermo Furniture Store. This company uses computer technology to cut wood for furniture to the exact measurements and specifications needed and they sold their product at lower prices. If Guillermo moved for this option he would increase his capital expenses, but would reduce production costs and in the long run make money on this change. Depending on the life span of the equipment the costs can be depreciated over time.
Another idea that Guillermo had was to become a representative for a manufacturer and coordinate distribution with his existing network. This would reduce the cost of making furniture, but would completely change his business model by merging or contracting with other companies.
Concept of the Value and Economic Efficiency
In order to create economic efficiency Guillermo must look beyond at what they do best, which is creating quality furniture. Guillermo has to think of what he...