Guillermo Concept Essay

774 Words4 Pages
The Guillermo's Furniture Store Concepts FIN/571 February 26th, 2012 The Guillermo's Furniture Store Concepts A successful furniture company own and operated by Guillermo Navallez in Sonora Mexico was doing well business wise until the late 1990’s when a foreign competitor moved into the region. This new situation made competition header for the Guillermo Company since the new company had better high-tech equipments that made production cheaper and faster than the Guillermo had been able to match. Guillermo Company earlier had been able to charge lower prices because the area had a good supply of timber for the variety of tables and chairs produced by his company and on top all these benefits, the housing was also inexpensive. Labor was also relatively inexpensive. These scenarios made it possible for the company to enjoy high profit margins. The situation here and the purpose of the paper is to explore alternative ways that the Guillermo Company can use some financial concepts to improve the chances of the company surviving is predicament. For the Guillermo Company to be able to weather these new forces of competition and resist extinction, the company must improve their profitability, match competitors on wages scales and, also eliminate any wasteful operation process. Solutions The first thing anyone will notice from the Guillermo scenario is the fact that the company does not have a working budget. Without such plan, it will be difficult not know if the company is making profits or losing money. Having a budget gives an operation a quantitative perspective of a plan to follow, it allows the management to set a goal and estimate the cost of achieving the goal. The reason having a working budget will be a good idea for the Guillermo Company is, for the present day it will be a guiding force and also the budget can be used as
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