Guillermo Furniture Store Concepts Essay

602 WordsDec 2, 20123 Pages
Guillermo Furniture Store Concepts Guillermo Navallez is the owner of Guillermo Furniture Store that is located in Sonora, Mexico (University Of Phoenix, 2012). Guillermo Furniture Store manufactures tables and chairs because Sonora, Mexico has a good supply of timber. The cost for the timber is low. There are new competitors that are entering from overseas that have high-tech. Using the high-tech machinery for production will be more efficient with minimal waste. The rising cost of labor that is happening in Sonora, Mexico, is affecting Guillermo Furniture Store’s profit margin (University Of Phoenix, 2012). With the changes that are happening, Guillermo is looking into other options. The options are to consider various business alternatives, including merging with other companies, introduction of high-tech into the manufacturing process, or becoming a distributor to a company in Norway (University Of Phoenix, 2012). Finance concepts and principles, financial markets, and ethics form a foundation for the financial decisions that managers routinely make (Emery, Finnerty, & Stowe, 2007). Financial Concepts and Principles Emery, Finnerty, & Stowe (2007) states, “Principle of self interested behavior is when all else is equal, all parties to a financial transaction will choose a course of action most beneficially advantageous to themselves.” Guillermo has to face this principle in this scenario because he will need to decide which course of action is most financially beneficial to him and the business. There are opportunity cost that also go with the principle of self interested behavior. The principle of two-sided transactions is demonstrated in this scenario because if Guillermo decides to be a representative to the Norway company then there are two transactions that will take place. Sometimes one person will do what is needed to gain at another person’s
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