Guillermo Rec Paper

Guillermo Furniture Store Recommendation

Team B

FIN/571

March 11, 2013

Paul Stevens

The furniture industry is evolving and Guillermo Furniture is confronting a new age where change has to be implemented. Guillermo Furniture is a seasoned organization; however, the senior leadership must keep the organization profitable to remain competitive in their industry. The organization has encountered three change initiatives including foreign production, distribution, and technological enhancements as it relates to new equipment implementation. However, the unanimity of our recommendation is to ensure competitiveness, profitability, and continued building of customer rapport. Although, generating revenue during this transition is a primary concern, the following content will describe Guillermo Furniture’s available alternatives. In addition, a justified recommendation will be provided that will provide the organization with the best opportunity for success.

The two alternatives that are available for Guillermo to consider implementing in an effort to remain competitive are the high-tech equipment option and the brokerage option. If Guillermo chooses the high-tech equipment option, he will incur high up-front cost. Comparable companies are using similar advanced equipment that involves robots performing the work including assembling the equipment. This option will ultimately reduce direct labor cost because of technology enhancements and simultaneously increase incremental cost because of the additional units that will be produced. Conversely, if Guillermo chooses the brokerage option, his upfront cost will be minimal. While inquiring with some of his partners, Guillermo learned some competitors are looking for avenues to distribute in North America. If this option is successful, he can move his company from primarily manufacturing to distribution. This business opportunity will become a new quest...