Guillermo Furniture Store Concepts

Guillermo Furniture Store Concepts
Rodolfo Brewer
University Of Phoenix
Corporate Finance
Rafat Abbasi
August 30, 2012

Guillermo Furniture Store Concepts
Guillermo’s Furniture Store is described by the scenario as a self proclaimed, strong, and well-established small furniture producing business. Located in Sonora, Mexico, Mr. Nevallez has the opportunity and advantage of having low overhead, low production costs, and low labor costs. The store’s position has been excellent also because of reduced property tax, rent, and pristine weather conditions. Guillermo Nevallez has seen rivals come and go, but has managed to stand his ground as a well-known, well liked and good quality furniture producer.
A recent arrival of major furniture competitors has forced Mr. Nevallez to reevaluate his position as owner, the position of his company, and the direction in which the business will go to adjust to the immense pressure from these foreign competitors. These two competitors have caused a significant monetary dent in the company’s cash flow, not to mention the overflow of product that they can produce in a shorter amount of time, and with higher efficiency. Guillermo’s competitors use high technology production strategies, which have pushed Mr. Nevallez into thinking of possible retirement, complete business shutdown, and even selling out to the more powerful competitors. This paper will identify the financial concepts found in this furniture store scenario.
Financial Concepts
Mr. Nevallez is dealing with tough competitors; he needs to focus on the competitive economical benefit of this company. He needs to consider what steps he will have to take to make more income. In the scenario of Guillermo's furniture store, a number of financial principles can be applied to Mr. Nevallez business. A financial principal that was found has to deal with the competitive environment that is self-interested behavior. As the owner of the company, Mr. Nevallez has to take...