Guillermo Furniture Store Concept Essay

759 WordsMar 5, 20134 Pages
Guillermo Furniture Store Concepts NAME Fin/571 Corporate Finance DATE PROFESSOR Guillermo Furniture Store Concepts The Guillermo furniture store is located in Sonora, Mexico which is known as an attractive vacation spot. Sonora Mexico is also considered a huge furniture manufacturing location in North America. The Guillermo furniture store scenario posed a few issues within the furniture market. Through certain finance concepts, Guillermo was able to make some decisions that will increase business sales. Even though Sonora, Mexico had a considerable supply of timber used to make various chairs and tables by Guillermo’s company and labor costs were low, Guillermo experienced a down-turn in the late 1990’s. Guillermo’s recession was due to a foreign competitor that operates over sees and the Sleepy communities in Sonora that started to make a come back. The foreign competitor is able to create exact specifications with low pricing due to the high tech use of a laser. The laser is generated by robots in return cutting labor costs for the foreign competitor. The Sleepy’s influence has expanded and is known as one of the biggest retailers and the nation’s headquarters was just miles away. The cost of labor also rose as a result of the mild weather, attractive scenery, low cost housing, a new international airport, and less traffic on the roads. Guillermo researched his competition and found that his competition was consolidating into larger organizations through merger or acquisition. Guillermo does not want to merge or expand his company and is following the principle of self-interested behavior. This principle illustrates the way in which people act in financial self-interest. This principle says that when all else is equal, all parties to a financial transaction will choose the course of action most financially advantageous to themselves (Emery,
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