This website uses cookies to ensure you have the best experience. Learn more

Guillermo Furniture Store Concepts Essay

885 words - 4 pages

Guillermo Furniture Store Concepts

Student Name

FIN/571

December 17, 2012

Instructor’s Name

Guillermo Furniture Store Concepts

According to University of Phoenix (2012), Guillermo Furniture has been successfully owned and operated by Guillermo Navallez in Sonora, Mexico for several years. The Sonora location has offered a good supply of timber and relatively inexpensive labor costs up until recently. Mr. Navallez is faced with business challenges as a result of increased global competition and increased labor costs in Sonora. He has the opportunity to apply the principles of foundational corporate finance to aid him in charting ...view middle of the document...

Competitive Economic Advantage

The Principle of Self-Interested Behavior stating that “people act in their own financial self-interest” (Emery, Finnerty & Stowe, 2007, p. 20) can be applied to Mr. Navallez’s approach to using local, relatively inexpensive labor. Some could argue that the opportunity cost that this presents is that of a more technologically advanced automated approach to production that would provide more consistent, precise, products for customers with less manual manipulation from workers. Advanced technology and automation incurs higher fixed costs while lowering indirect costs such as labor providing both financial risks and benefits that need to be weighed.

The Principle of Two-Sided Transactions indicating that “for each buyer there is a seller” (Emery, Finnerty & Stowe, 2007, p. 21) applies to the consolidation by merger or acquisition occurring in the current market for those companies trying to respond to increased competition. Through consolidation, these companies can achieve economies of scale and the inherent benefits of increased production and lower cost of goods sold because of sharing fixed costs over a larger number of products.

The Signaling Principle: Actions Convey Information was applied when Mr. Navallez “watched his profit margins shrink as prices fell and costs rose” (University of Phoenix, 2012). This signaled the need to take action. The Behavioral Principle: When All Else Fails, Look at What Others are Doing for Guidance was also applied when Mr. Navallez began researching the foreign competition for insight regarding how they were handling some of the same economic changes.

Value and Economic Efficiency

The Principle of Valuable Ideas was applied through the research process on foreign competition. Through this process, Mr. Navallez identified approaches such as computer controlled laser lathes to increase precision, emphasis on automation decreasing the need for manual labor and increasing the ability to move production between products quickly. Reviewing the option to partner with a second...

Other Essays Like Guillermo Furniture Store Concepts

Guillermo Furniture Store Analysis

1594 words - 7 pages uillermo Furniture Store Analysis Week one individual paper was centered on Guillermo Furniture Store location, the production of work and the company finance. Week three individual paper will state three alternative measures for Guillermo Furniture Store working capital policy by weighting the average cost of capital, and by implementing multiple valuation techniques toward reducing the business risk. Business within Guillermo Furniture

Guillermo Furniture Store Scenario Essay

854 words - 4 pages Running head: GUILLERMO FURNITURE STORE SCENARIO Guillermo Furniture Store University of Phoenix ACC/561-Accounting February 15, 2010 Guillermo Navallez is a successful custom furniture manufacturer in Sonora, Mexico. He is now faced with the decision of which direction to take his business, after a new international competitor entered the market and one of the largest furniture retailers opened their business in the community

Guillermo Furniture Concepts

650 words - 3 pages Guillermo Furniture Store Concepts Name Class Date Professor Guillermo Furniture Store Concepts Guillermo Navallez has long prospered with his furniture company, Guillermo Furniture. Guillermo enjoyed being able to run his business from his hometown of Sonora, Mexico where there was an abundance of quality timber. Sonora made for a perfect place to specialize in tables and chairs which was what made Guillermo Furniture popular among

The Guillermo Furniture Store Scenerio

778 words - 4 pages The Guillermo Furniture Store Scenario Ramon Solabi ACC / 561 07/10/2010 James M. Carlin Guillermo Furniture is the largest furniture manufacturing company in the region. The production of a variety of unique handcrafted tables and chairs are the result of an abundance of available resources that include a vast supply of timber and inexpensive labor. Guillermo has been making furniture for many years and his business has been

The Guillermo Furniture Store Scenario

2403 words - 10 pages means that by combining business different activities, the performance will improve and operation costs will be reduced. In Guillermo Furniture Store scenario, it is beneficial to increase performance and decrease costs. If they increase performance this means they can sell more product (and the merging company’s product) in the market rather than inventing new ideas to compete with other companies in the market. Furthermore, they reduce costs

Guillermo Furniture Store Flex Budget

847 words - 4 pages Guillermo Furniture Store Flex Budget Guillermo Navallez is a furniture maker based in Sonora, Mexico. His once thriving business is suffering from decreased profits caused by increased competition and the introduction of new technology. Therefore, Team D was consulted for the purposes of designing a flex budget. When constructing and evaluating a flex budget, it is important to identify favorable and unfavorable variances, consider the

Ongko Furniture Store Concepts

822 words - 4 pages |FINGM/571 Assignment Feedback Form | |Week 1: Ongko Furniture Store Concepts Paper | |Criterion

Week One, Acc/561 Guillermo Furniture Store

840 words - 4 pages Introduction Guillermo’s Furniture Store is a manufacturing company in Sonora, Mexico. Guillermo Navallez has been in the area for years and built the company into the area’s largest furniture manufacturing company. The business has been very successful, offering quality handcrafted products at a premium price. The location is perfect as it offers inexpensive labor, affordable housing and ideal weather with an abundance of timber. Guillermo’s

Cost Analysis and Control System: Guillermo Furniture Store

1695 words - 7 pages Cost Analysis and Control System: Guillermo Furniture Store Accounting/ACC561 October 04, 2010 Cost Analysis and Control System: Guillermo Furniture Store Guillermo Navallez (Navallez) has several important decisions to make regarding the future of Guillermo Furniture Store (GFS). Computations of return on investment, residual income, economic value-added data, and break-even analysis provide insight for decision-making and

Guillermo Furniture Store

764 words - 4 pages Abstract Guillermo’s Furniture Manufacturing Company located in Sonora, Mexico. Area described as a beautiful vacation spot and a large furniture manufacturing location in North America (University of Phoenix, 2010). Guillermo Navallez was producing furniture for many years, area had a good supply of timber. Labor cost in the area was not expensive. In later 1990, new competitors entered the furniture business in area, which leads to decrees

Guillermo

650 words - 3 pages Guillermo Furniture Store Concepts Paper 1 Guillermo Furniture Store Concepts Paper 2 Introduction In the world of business, we have many financial concepts and principles that help and allow business managers to make financial decisions that give them the greatest advantage in the market. The Guillermo

Related Papers

Guillermo Furniture Store Concepts Essay

677 words - 3 pages Guillermo Furniture Store Concepts For Guillermo Navallez of Guillermo Furniture Store, making furniture was not about competition, but about the handcrafted quality that he was able to supply to his customers. In the late 1990s, there was a competitive and economical change that made him start to rethink how he ran his company in order to grow his company’s profit margin. Guillermo is aware that he needs to make a change for his company to

Guillermo Furniture Store Concepts Essay

631 words - 3 pages Guillermo Furniture Store Concepts Olga Belteton FIN/571 February 11, 2013 Instructor: Gurpreet Singh Guillermo Furniture Store Concepts Guillermo Navallez had his furniture store located in Sonora, Mexico. The area was known for its supply of timber and was also known to be a large furniture manufacturing area in North America. Mr. Navallez for years created a variety of tables and chairs that were fine pieces of furniture. His

Guillermo Furniture Store Scenario Essay

634 words - 3 pages Alandra Shamblee Guillermo Furniture Store Concepts Paper Corporate Finance 571 University Of Phoenix Online Course Week 1 Guillermo Navallez has realized that he does not have the competitive economic advantage to the new competitor from overseas who uses a high

Guillermo Furniture Store Scenario Essay

1028 words - 5 pages Accounting-MMB/1009 | Guillermo Furniture Store Scenario | University of Phoenix | | Malaika C. Williams | 8/18/2010 | | Abstract This document reviews the Guillermo Furniture Store Scenario where the author discusses how Guillermo use budges and performance reports in his decision making process, how ethics might influence his accounting decisions, and what accounting information is most relevant for Guillermo to