Guillermo
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- Date Submitted: 07/17/2011 09:13 AM
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Guillermo Furniture Store Analysis
FIN 571 Corporate Finance
Guillermo’s Furniture Store experienced some challenging decision-making that deals with finance and the operating future because the foreign competitor engaged with the furniture business in Sonora, Mexico. The challenge decision that Guillermo need to make is to whether do business with large organization or remain as an independent company and continue to stay within the competitive market. Guillermo has to make the best decision for the business and make sure every factor of concern has been addressed. One of the factors is to make sure the business can afford a merge financially and /or continue to compete with other companies. Guillermo should also consider if purchasing enhanced machine equipments that would help promote the business as well as looking at the prices. Third, Guillermo should consider another alternative such as changing business plan from manufacturing to distributing. This alternative plan will allow Guillermo to continue to manufacture products while distributing products for Norwegian company.
Issues
Guillermo is facing two critical issues he did not have to be face with before another company joined the furniture market. The hi-tech machinery producing furniture at low costs is a downfall for Guillermo. Guillermo’s furniture store does not use hi-tech machinery but will probably have to look into options. This option must be a low cost-effective way in producing his furniture. The solution would be to keep the profits at the same levels, but Guillermo must find those ways on how this going to happen.
Another issue that Guillermo is facing is the rising cost of labor. The population in Sonora, Mexico is increasing that is impacted by the labor in the area. Guillermo should consider his ability to compete with current operating and pricing structures, whether if the hi-tech machinery is purchased or not or perhaps purchasing similar equipment. If Guillermo...
FIN 571 Corporate Finance
Guillermo’s Furniture Store experienced some challenging decision-making that deals with finance and the operating future because the foreign competitor engaged with the furniture business in Sonora, Mexico. The challenge decision that Guillermo need to make is to whether do business with large organization or remain as an independent company and continue to stay within the competitive market. Guillermo has to make the best decision for the business and make sure every factor of concern has been addressed. One of the factors is to make sure the business can afford a merge financially and /or continue to compete with other companies. Guillermo should also consider if purchasing enhanced machine equipments that would help promote the business as well as looking at the prices. Third, Guillermo should consider another alternative such as changing business plan from manufacturing to distributing. This alternative plan will allow Guillermo to continue to manufacture products while distributing products for Norwegian company.
Issues
Guillermo is facing two critical issues he did not have to be face with before another company joined the furniture market. The hi-tech machinery producing furniture at low costs is a downfall for Guillermo. Guillermo’s furniture store does not use hi-tech machinery but will probably have to look into options. This option must be a low cost-effective way in producing his furniture. The solution would be to keep the profits at the same levels, but Guillermo must find those ways on how this going to happen.
Another issue that Guillermo is facing is the rising cost of labor. The population in Sonora, Mexico is increasing that is impacted by the labor in the area. Guillermo should consider his ability to compete with current operating and pricing structures, whether if the hi-tech machinery is purchased or not or perhaps purchasing similar equipment. If Guillermo...