Guillermo Furniture Store Scenario
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Guillermo Furniture Store Scenario
Kevin L. Waters
University of Phoenix
Accounting
ACC/561
Kymberly A. Polser, CPA
June 06, 2010
Guillermo Furniture Store Scenario
Over the years, Guillermo Furniture Store has enjoyed many advantages. Sonora, Mexico had inexpensive labor, materials and is widely regarded as a beautiful vacation spot with an excellent quality of life. These factors helped enable Guillermo to charge a reasonable premium for his handcrafted furniture. Over the last several years, his market share has dwindled because of stiff overseas competition. Now he needs to explore other alternatives to keep is business viable and vibrant. Guillermo Furniture Store is at a pivotal point in its existence and the owner must decide what performance and budget reports that he will make good use of to facilitate his decision- making process.
Determining how much to spend on various expenses is only half the battle. The other half is for a company to be able to effectively judge its spending performance. Regardless of the type of business, the ability to gauge performance using budgets is a matter of life and death in the business world. (Elmerraji, 2010, para. 2)
First, Guillermo must decide what he wants his company to accomplish. He knows that he doesn’t want to be bought out by a competitor or to take on the added burden of acquiring an additional company. That would have a negative effect on the enjoyment of his family life. Guillermo needs to have reports generated on important issues such as how his business is currently performing, information on how his competitors are eroding his market share, the cost for changing his production schedule and what type of investment, if any, that he needs to make in capital equipment. Information on the market conditions is crucial to making a valid decision.
Market research is any organized effort to gather information about markets or customers. It is a very important component of...
Kevin L. Waters
University of Phoenix
Accounting
ACC/561
Kymberly A. Polser, CPA
June 06, 2010
Guillermo Furniture Store Scenario
Over the years, Guillermo Furniture Store has enjoyed many advantages. Sonora, Mexico had inexpensive labor, materials and is widely regarded as a beautiful vacation spot with an excellent quality of life. These factors helped enable Guillermo to charge a reasonable premium for his handcrafted furniture. Over the last several years, his market share has dwindled because of stiff overseas competition. Now he needs to explore other alternatives to keep is business viable and vibrant. Guillermo Furniture Store is at a pivotal point in its existence and the owner must decide what performance and budget reports that he will make good use of to facilitate his decision- making process.
Determining how much to spend on various expenses is only half the battle. The other half is for a company to be able to effectively judge its spending performance. Regardless of the type of business, the ability to gauge performance using budgets is a matter of life and death in the business world. (Elmerraji, 2010, para. 2)
First, Guillermo must decide what he wants his company to accomplish. He knows that he doesn’t want to be bought out by a competitor or to take on the added burden of acquiring an additional company. That would have a negative effect on the enjoyment of his family life. Guillermo needs to have reports generated on important issues such as how his business is currently performing, information on how his competitors are eroding his market share, the cost for changing his production schedule and what type of investment, if any, that he needs to make in capital equipment. Information on the market conditions is crucial to making a valid decision.
Market research is any organized effort to gather information about markets or customers. It is a very important component of...