Fin571 Week1
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Guillermo Furniture Store Concepts
Guillermo Furniture Store Concepts
Guillermo store is located in Sonora, Mexico. The owner, Mr. Navallez, has made a variety of furniture for years. The wages for the employees have not been expensive. The prices on his furniture were determined by the quality of the furniture he makes (University of Phoenix, 2010). Guillermo had it made being the only company at the time that provided their customers with the quality furniture that they needed. This paper will discuss three financial concepts and how each relates to Guillermo’s Current challenges.
These financial concepts are: 1) competitive economic advantage, 2) value and economic efficiency, and 3) observing financial transactions (Emery, Finnerty & Stowe, 2007).
Competitive Economic Advantage First, we look at the principle of competitive economic advantage. Guillermo’s business became successful due in large part of the competitive advantage he had in Sonora, Mexico. He could provide a quality product cheaper than his competitors and took full advantage of that to build a profitable furniture manufacturing business (University of Phoenix, n.d.). The Principle of Self-Interested Behavior may have directed his original business decisions, but that same principle is causing him to reevaluate his situation and make adjustments because circumstances have changed that make his original set up to be unprofitable moving forward (Emery, Finnerty & Stowe, 2007). In addition, the Principle of Two-Sided Transactions was almost forgotten by Guillermo for a time. He had been operating without much thought for his buyers because of his competitive advantage. Since the situation has changed, he is forced to look at the factors that can cause his buyers to purchase their furniture from Norway (University of Phoenix, n.d.). In following Norway’s example, Guillermo is following the principle of looking to...
Guillermo Furniture Store Concepts
Guillermo store is located in Sonora, Mexico. The owner, Mr. Navallez, has made a variety of furniture for years. The wages for the employees have not been expensive. The prices on his furniture were determined by the quality of the furniture he makes (University of Phoenix, 2010). Guillermo had it made being the only company at the time that provided their customers with the quality furniture that they needed. This paper will discuss three financial concepts and how each relates to Guillermo’s Current challenges.
These financial concepts are: 1) competitive economic advantage, 2) value and economic efficiency, and 3) observing financial transactions (Emery, Finnerty & Stowe, 2007).
Competitive Economic Advantage First, we look at the principle of competitive economic advantage. Guillermo’s business became successful due in large part of the competitive advantage he had in Sonora, Mexico. He could provide a quality product cheaper than his competitors and took full advantage of that to build a profitable furniture manufacturing business (University of Phoenix, n.d.). The Principle of Self-Interested Behavior may have directed his original business decisions, but that same principle is causing him to reevaluate his situation and make adjustments because circumstances have changed that make his original set up to be unprofitable moving forward (Emery, Finnerty & Stowe, 2007). In addition, the Principle of Two-Sided Transactions was almost forgotten by Guillermo for a time. He had been operating without much thought for his buyers because of his competitive advantage. Since the situation has changed, he is forced to look at the factors that can cause his buyers to purchase their furniture from Norway (University of Phoenix, n.d.). In following Norway’s example, Guillermo is following the principle of looking to...