Introduction
Guillermo Furniture Store was established some decades ago in Sonora, Mexico. The concern essentially manufactures furniture as its main product. The paper essentially examines the Guillermo Furniture Store Concepts in appreciation of the scenario in which it currently is placed. The options availed to the proprietor are given with the objective of making the best decision for the concern.
Concepts
Over the recent years, the concern has been faced by a number of challenges. For starters, the entry of a foreigner into the market has greatly affected Guillermo. This is because of the Guillermo’s use of high technology and low pricing mechanisms. Secondly, the retail concerns at home have improved their competitive advantage. The cost of labor has colossally increased. Within the industries, firms are continuously increasing their synergies and competitive advantages through mergers and acquisitions. This enables the firms enjoy the economies of large scale. However, Guillermo is not ready for the managerial nightmares characteristic of huge companies. The high technology employed by the rivals in the market has led to faster and standardized production. In addition, it would effectively address the labor costs which would likely reduce. Other than that, the high technology allows all round the clock production.
However, the technology itself is highly costly and requires a substantial capital outlay in terms of initial costs. In the end, the adoption of the technology would require substantial capital at the initiation but would be effective towards the reduction of the production costs especially labor costs and production overheads.
The concern could also exploit the possibility presented by their competitor who intends to offer his products in the market but still faces distribution shortcomings. The concern could effectively position itself as the unopposed North American distributor for the Norway based competitor. This opportunity would enable Guillermo expand its mandate from the singular task of manufacturing to include the distribution tasks as well. This could provide the cushioning effect necessary for the survival and improvement of the concern amid the competition it faces in its manufacturing endeavors.
In addition, Guillermo has the enviable patent that he ought to use to maximize his income. The patented procedure or process of furniture coating could be offered to other manufacturers at a fee or equally used to produce unique products that would ensure they rank top in terms of value addition on the production process. This would position them competitively in the market.
The scenario facing Guillermo dictates for the proprietor to make an informed decision on the option to pursue. It should be noted that the concern’s success depends on its ability to position itself strategically in appreciation of the market dynamics. The concern need to appreciate the competitive nature of the environment in which they are exposed. The decision should, therefore, purpose to position the concern favorably through the minimization of costs and maximization of revenues. The production process contributes the largest portion of costs. In minimization of costs, the concern must address the production costs. The labor costs should be minimized and if possible, the concern should adopt the technology. This would not only suffice for purposes of cost reduction, but would also effectively improve the quality of products through the standardization process.
Conclusion
Guillermo Furniture store concepts essentially refer to the situation that the store faces and calls for the proprietor to make an informed decision on the future of the concern.
Works Cited
Banks, E. (2010). Finance:The Basics (illustrated ed.). New York: Taylor & Francis.
Griffin, R. W. (2012). Management (revised ed.). New York: Cengage Learning.
Warren, C. S., Reeve, J. M., & Duchac, J. (2011). Financial & Managerial Accounting. New York: Cengage Learning.
