Guillermo

Guillermo Furniture Store Concept

Kandi Kolka

FIN/571

April 16, 2012

Bill Stokes

Guillermo Furniture Store Concept Paper

Sonora, Mexico is a beautiful vacation spot. This is also the home for a furniture manufacturing owned by Guillermo Navallez. This location in North America is a perfect spot for the furniture store. Guillermo has some business decisions to make. The cost of living has increased with the new airport, more people, and jobs. Guillermo had to find a way to keep his business profitable. Because of economic changes in the Mexico the cost of making items have risen although the prices have dropped. New competitions with different techniques have entered the industry. This has affected the profit margin of Guillermo’s business. Guillermo will need to decide how to lower the production cost of his furniture so a profit will be made.

Guillermo has been researching options to help his business. Guillermo must try to find the option that will save his business. Merging with another company is not an option. “An option is a right, without an obligation, to do something” (Finnerty, Emery, & Stowe, 2007) . This eventually would wedge the Guillermo Company out. Expanding is a last option. Guillermo believes this will take time away from his family because of the added responsibilities that come with expansion. Guillermo is trying to decide between two different options. One is using technology to make the furniture. Guillermo could use robots to make the precise cuts in the wood. This would reduce the cost of labor. The computer could run the process all day and night. Limited employees need to be present if they are using the newer technology to make the furniture. The disadvantage would be that this would be expensive to start the process. The technology is costly as is, the insurance that would need to be in place to cover. The last option is to act as a distributor for another competitor.

To...