Guillermo Furniture Store Concepts

Guillermo Furniture Store Concepts

The Behavioral Principle

Faced with the new occurrence of having a competitor, Guillermo’s first action was to apply the behavioral principle of finance. This form of behavior is sometimes referred to as the “industry effect.” This is what we mean by the Behavioral Principle of Finance: When all else fails, look at what others are doing for guidance (2007).

By applying, this principle he was able to examine in what manner the competition were managing all of the new changes. Through this it became apparent to Guillermo that the growth of the competition was attributed to many mergers and acquisitions. This was something Guillermo did not want to engage (2010).

The Principle of Valuable Ideas

As Guillermo was reluctant to engaging in a merger or acquiring, he continued by conveying the principle of valuable. This principle states that new products or services can be created and transformed into extraordinary positive value (2007). Through this principle Guillermo was able to rise to the idea of coordinating his current distributor arrangement and basically become an agent for this other manufacturer. The launch of this move will gear the business’ main emphasis from manufacturing to distribution (2010).

The Principle of Comparative Advantage

The Principle of Comparative Advantage may be familiar. In a broad sense, it is the very idea underlying our economic system. If everyone does what they do best, we will have the most qualified people doing each type of work (2007).

Along with Guillermo’s shifting of the business line, he also has a patented process for creating a coating for his furniture. The advantage of having the exclusive rights will provide the business with a competitive advantage over the competition (2010).

Ethics

An added value to Guillermo Furniture Store would be to follow precise guidelines of both business and personal ethics. The connection between business and personal ethics can be a...