Guilermo Funiture Store Concepts

Guillermo Furniture Store Concepts

Jocelyn Adams

University of Phoenix

FIN/571

Joseph McGirt

June 13. 2012

Sonora, Mexico is a beautiful vacation spot for many vacationers and has a large furniture manufacturing location in North America. The location supplied enough timber to produce attractive furniture for consumers to purchase. Guillermo Navallez has sold a variety of table and chairs for many years. Business was good until 1990 when two forces combined began to sell furniture in this location. This posed as a threat toward Guillermo Navallez furniture business because of the high tech approach the companies have. This caused his business profit margins shrink and costs rise. When similar companies move into territories and begin to take part of the business, the Chief Executive Officer must think of ways to regain the market place back. Examining some concepts in corporate financing will help Guillermo Navellez to discover what actions he should use.

The first concept of self- interest describes the attitude one has for his or her business. This behavior is true because each one thinks of him or herself first in regard to life, family, and business. Guillermo Navallez expertise in handcrafting the furniture and pricing strategies posed no threats from any other competitors because he had an oligopoly market. As the competition moved in he began to think of opportunity costs that he may have to consider in remaining competitive. According to Emery (2007 pg. 20) “opportunity cost is the difference between the value of action and the value of the best alternative.” For Guillermo Navallez to stay in the market place he may have to invest in high tech approaches.

The behavioral principle of when all else fails look at what others are doing. Guillermo Navallez researched how the competition was achieving their goals, one he found out the companies were consolidating into larger organizations. He did not want to do this because he had owned his business...