Guillermo Furniture Store Concepts

Guillermo Furniture Store Concepts
Christina Hill
October 31, 2011
Jesse Carter

Situation Analysis
Guillermo Navallez has been making furniture for years near his Sonoran home.   Sonora, Mexico is known for being a beautiful vacation spot. The area is also known for being a large furniture manufacturing location in North America. The area around Sonora has a good supply of timber for the variety of tables and chairs produced by his company. One of the primary benefits for conducting business in the area is that labor relatively inexpensive. Guillermo Navallez currently prices the handcrafted products in his store at a slight premium to account for the quality and workmanship represented of his company.   Guillermo’s new competitor’s primary business advantage is that it utilizes high-tech production equipment to build furniture. This factor creates economies of scale. Due to production efficiencies, this new foreign competition is also able to sell the custom furniture at a lower price.   Performance reporting is another analysis tool that can be used by Guillermo Furniture in order to make assessments and make critical strategic decisions could be the performance report. Small communities of Sonora have risen to become one of the world’s largest retailers in the nation’s headquarters. The substantial population increase in Sonora can be contributed to the mild weather, beautiful scenery, inexpensive housing, traffic-free roads, and a new international airport. The population expansion and growth has also caused a significant rise in employment opportunities and the cost of labor. Due to these factors, Guillermo Furniture Store is experiencing organizational hardships which include employee attrition and decreased profit margins. The key objective of this document is to analyze the Guillermo scenario and apply various financial concepts and principals to the situation.
Concepts and Practices
In order to effectively compete in its current market,...