Running Header: Guillermo’s Furniture Store Scenario

Guillermo’s Furniture Store
LeKane Gilling
University of Phoenix

In the Guillermo Furniture Store scenario, the owner is faced with several decisions, of which, financial concepts and principles must be applied in the decision-making processes. In this paper, the writer will examine how the financial concepts explored in the required reading assignment relate to the Guillermo scenario. This paper will also, look at different alternatives that are available to the management of Guillermo's Furniture Store.
Guillermo’s Furniture Store
Guillermo Furniture Store in Sonora, Mexico is the largest furniture manufacturing company in the area and has been around for many years. The owner of the store, Guillermo Navallez is now being challenged by competitors. First, a new competitor from overseas entered the furniture market. Using a high-tech approach, this foreign competition provided furniture to exact specifications and did so with rock-bottom prices. Second, the sleepy communities in Sonora woke up. One of the largest retailers in the nation’s headquarters was just a few miles down the road, and its influence had expanded considerably (University of Phoenix, 2010).
One alternative that was found in the scenario was incremental costs and benefits. The incremental costs and benefits are those that would occur with particular course of action but would not occur without that course of action (Emery, Finnerty, & Stowe, 2007). The principle of incremental benefits states the value derived from choosing a particular alternative is determined by the net extra or incremental benefit the decision provides compared with its alternative. Guillermo presently is concerned about the competitor that has been interrupted by its profit by providing lower prices and able to provide accurate specifications. If Guillermo’s business were not going to benefit from coordinating existing...