Guillermo Scenario
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- Date Submitted: 03/19/2012 07:36 PM
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Guillermo’s Furniture Store Scenario
FIN571
Guillermo’s Furniture Store Scenario
Guillermo Navallez operates a furniture manufacturing business in Sonora, Mexico. Sonora is known as a beautiful vacation spot in Mexico. Guillermo furniture produces a wide variety of tables, and chairs hand crafted. The area of Sonora offers a good supply of timber to produce Guillermo’s products (University of Phoenix, n.d.).
In the late 1990s the business faced two challenges that together made operating the business much tougher. The two challenges included new competition from an overseas company that produces furniture using high-tech machinery. The other challenge came from the expansion of one of the largest retailers in the nation. The expansion brought an influx of people, and jobs, resulting in the rise in labor cost ultimately reducing profit margins for the company.
With these challenges Guillermo needed to re-evaluate the business processes needed to make the necessary decisions to continue and overcome.
Options
In any company’s life cycle, for continual success and improvement, it is imperative that the managers inspect and reevaluate their system and their process. In the case of Guillermo’s Furniture, evaluation of their new competition to include the high-tech processing was done. Would the change to their process enable to keep the company in the furniture game, though labor cost would be drastically be reduced would the cost of transition to this technology provide a business opportunity cost benefit. Assuming the transition to this technology would be beneficial, how long would it take Guillermo to break even or even begin profiting. Another area of consideration would be whether or not Guillermo’s Furniture Manufacturing is willing to take the risk of growth for success or failure.
During Guillermo’s evaluation he gathered from his distributors what their wants were, during this process he came up with the idea to become possibly a...
FIN571
Guillermo’s Furniture Store Scenario
Guillermo Navallez operates a furniture manufacturing business in Sonora, Mexico. Sonora is known as a beautiful vacation spot in Mexico. Guillermo furniture produces a wide variety of tables, and chairs hand crafted. The area of Sonora offers a good supply of timber to produce Guillermo’s products (University of Phoenix, n.d.).
In the late 1990s the business faced two challenges that together made operating the business much tougher. The two challenges included new competition from an overseas company that produces furniture using high-tech machinery. The other challenge came from the expansion of one of the largest retailers in the nation. The expansion brought an influx of people, and jobs, resulting in the rise in labor cost ultimately reducing profit margins for the company.
With these challenges Guillermo needed to re-evaluate the business processes needed to make the necessary decisions to continue and overcome.
Options
In any company’s life cycle, for continual success and improvement, it is imperative that the managers inspect and reevaluate their system and their process. In the case of Guillermo’s Furniture, evaluation of their new competition to include the high-tech processing was done. Would the change to their process enable to keep the company in the furniture game, though labor cost would be drastically be reduced would the cost of transition to this technology provide a business opportunity cost benefit. Assuming the transition to this technology would be beneficial, how long would it take Guillermo to break even or even begin profiting. Another area of consideration would be whether or not Guillermo’s Furniture Manufacturing is willing to take the risk of growth for success or failure.
During Guillermo’s evaluation he gathered from his distributors what their wants were, during this process he came up with the idea to become possibly a...