Guillermo Furniture Store Concepts

Guillermo Furniture Store Concepts

Angela N. Wiggs

FIN/571

March 7, 2011

Randy Gray

Guillermo Furniture Store Concepts

The Guillermo Furniture Store was founded by Guillermo Navallez, which started in his home in Sonora, Mexico where the company currently resides today (UOPX, 2011). Lately, competitors are challenging Mr. Navallez, so the company needs to revamp their processes and make necessary modifications to maintain a competitive advantage and financial stability. We will explore Mr. Navallez’s competitive advantages and the financial standing of the Guillermo Furniture Store.

Competitive Economic Advantage

There are many advantages that the Guillermo Furniture Store has over its competitors. The first advantage was the low labor costs in the Sonora area, but until lately, a rapid economic growth has driven up the salaries. Secondly, they have an advantage because of the large supply of timber in the Sonora area, which will drive done the cost of importing material. The products of Guillermo Furniture Store produce high quality items, and Mr. Navallez needs to consider fresh ideas that will not threaten the artisanship. A major competitor came into the picture in 1990, and uses innovative processes, which allows the competitor to offer its product at much lower prices (UOPX, 2011). While the profit margins are dwindling because of the rising costs and plummeting prices, Mr. Navallez needs to make some choices.

Value and Economic Efficiency

A reasonable approach for the Guillermo Furniture Store is the behavioral principle, which looks for guidance in what other firms with similar interests are currently doing and have done in the recent past (Emery, Finnerty, & Stowe, 2007). Mr. Navallez may need to unite with another company in order to survive in the competitive market, especially after researching his competition. Merging with another company is not a...