Guillermo Concepts

The competitive economic advantage

In economic environment, many organizations have different competitive advantage they can utilize for their benefits, and the advancement of their organization. For quite a long time, GFS was the sole provider of furniture in Sonora, Mexico which allowed Mr. Guillermo to “price his handicrafts products at a slight premium for the quality they represented” (University of Phoenix, 2010). In this case, Mr. Guillermo was solely motivated by his own financial gain, and did not consider the interest of others. According to Emery et al (2007), the principle of self interested behavior says that “when all else is equal, all parties to a financial transaction will choose the course of action most financially advantageous to themselves” (p.20), which previously allowed Mr. Guillermo to enjoy healthy profit margins. However, with the downturn in the economy, Mr. Guillermo needed to think out of the box, and find creative ways to maintain his company viable and profitable.

Some of his Mr. Guillermo alternatives are to expand his distribution network by partnering with a competitor from Norway. What Mr. Guillermo could lose in the transaction, would become the other competitor game. In fact, quite often in the principle of two-sided transactions, “one player can gain only at the expense of another player” (Emery et al, 2007, p.21) and what GFS will lose will become the Norway competitor’s gain, resulting in a zero sum gain. Nonetheless, there needs to be some value in such a transaction for GFS, otherwise, the organization would be acting against one of the fundamentals principle; the self interest principle.

Value

Environmental scans generally lead executives to make changes which will propel the organization to the next level, or at least give them a competitive edge. Based on the behavioral principle, Mr. Guillermo analyzed what his competitors were doing to give him alternative options for GFS. During the subsequent research, it...