Guillermo Essay

1206 WordsAug 7, 20125 Pages
Guillermo Furniture Store Analysis Paper Aimee R. Walrath FIN/571 August 6th, 2012 Prof. Mohammad Sharifzadeh GUILLERMO FURNITURE STORE ANALYSIS PAPER In the town of Sonora, Mexico a popular vacation spot is a large furniture manufacturing facility, founded by Guillermo Navallez. With an abundance of inexpensive hardworking labor available and a variety of timber Guillermo makes fine handcrafted furniture. The combination of these two factors also kept the furniture affordable. The business had been doing excellent up until the late 1990’s when other competitors entered the marketplace. These competitors offered similar products utilizing more high tech processes reducing the price they were able to charge. Another factor that has Senor Navallez contemplating the future of Guillermo furniture is the growth of the community of Sonora increasing the cost of labor (Guillermo Furniture Store Scenario, University of Phoenix). Senor Navallez has been toying with two different options in order to stay competitive while keeping Guillermo furniture. The first is to increase the technology in the factory, with highly automated computer controlled lasers by converting his production model to this it would be very expense but he could cut a lot of overhead in the process. Another choice would be to coordinate with another competitor who only wants to supply to chain distributors to become a distributor himself (Guillermo Furniture Store Scenario, University of Phoenix). Sensitivity Analysis A sensitivity analysis is used in order for an organization to predict the outcome of a particular “decision if a situation turns out to be different compared to the key prediction (Sensitivity Analysis, Retrieved Aug 6th 2012 from http://www.investopedia.com/terms/s/sensitivityanalysis.asp#ixzz22nIEmDZe).” A sensitivity analysis can be helpful in making various

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