StudentShare solutions
Triangle menu

Guillermo Furniture Store Analysis - Research Paper Example

Nobody downloaded yet

Extract of sample
Guillermo Furniture Store Analysis

As a result of this, Guillermo realizes that he needs to act quickly or go out of business. The benefits of operating as a sole proprietorship include the fact that Guillermo is able to make decisions without consulting anyone. With this in mind, Guillermo has decided not to merge with other organizations or even to acquire another organization. This led to the consideration of three options – continue as usual; purchase a hi-tech machine; and operate as a broker. However, before any decision can be taken, an analysis of the three options is required. Continuing as usual does not require Guillermo to do anything but to do business in the same manner as before. It is best that Guillermo makes some changes to his current operations. If sales and profits continue to fall then the end result is that the firm would have cease operations. However, with Guillermo’s reluctance to go the way of merger or acquisition closure of the business may be inevitable if the other options are not feasible. Purchasing a hi-tech machine is a very costly option as it requires an outlay of capital. Therefore, Guillermo’s ability to obtain funds as well as the cost of capital has to be a prime consideration. However, there are benefits that can be achieved from going this route. In order to break even, a certain level of sales would have to be achieved. The break-even point is achieved at the minimum level of sales which ensures that the firm neither makes a loss nor a profit. It is a measure of risk that is and s frequently used in making entrepreneurial decisions (Prakash and Deshpande 1982). This is only possible if Guillermo is able to produce furniture at a cost which is lower than the competition. This option of operating as a broker would require Guillermo to become a local distributor for an overseas firm while continuing to manufacture some of the items currently produced. This option will therefore require some changes in the way it has been operating as the main emphasis will be on distribution. This option does not require any capital outlay. An evaluation of the three options will be the focus of this paper. Capital budgeting techniques will be discussed and the very familiar and useful net present value technique will be utilized in order to arrive at a decision. Capital budgeting is the process by which long term capital investments are evaluated (Titman et al., 2011). The value that capital budgeting projects create is its NPV and this is dependent on the cost of capital (Emery et al., 2007). If the cost of capital is high, then the NPV will be relatively low, and if the cost of capital is low, the NPV will be relatively high. Project Evaluation Techniques The main objective of this evaluation is to determine which of the three options available to Guillermo will provide the best return. Some of the techniques that can be used to evaluate projects include the NPV, simple payback, and the internal rate of return (IRR). In making a decision on the feasibility of any project, the cash flows that will arise in future in relation to the initial investment would have to be evaluated (Emory et al., 2007). In the same manner, Titman et al. (2011) indicate that an investment opportunity is valued by evaluating its cash flows. Net Present Value The NPV is the technique that will be used to evaluate the three alternatives available to Guillermo. It is the most preferred capital budgeting technique (Ryan and Ryan, 2002). The primary focus of NPV technique ...Show more


Guillermo Furniture Store Analysis: Alternatives Available to Guillermo Course Name Introduction Guillermo Furniture Store is a sole proprietorship that is owned and operated by Guillermo Navallez. The firm has been operating as a profitable business for a number of years…
Author : lorine75
Guillermo Furniture Store Analysis essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the research paper on your topic
"Guillermo Furniture Store Analysis"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

Marketing Plan on owning a Pet Store
Consumer analysis 8 Demographics 8 Psychographics 9 Behaviors 9 Geographical considerations 9 B. Industrial Analysis 10 Competitor analysis 10 Segmentation 10 Criteria 10 Target 11 Differentiation and Positioning 11 Product Life Cycle 12 Marketing Mix 13 Product 13 Price 14 Pricing strategy 14 Place 15 Channels of distribution 15 Product location availability 15 Physical distribution 15 Cost 15 Promotion 16 Personal selling 16 Advertising 17 Sales Promotion 18 Public relations 18 Website 18 Budget 19 Control/Monitor 21 Feedback mechanism to monitor progress 21 Evaluation process 21 Performance objective 21 Profit margin 21 Market share 21 Promotional effectiveness 22 Market penetration 22 Re
18 pages (4500 words) Research Paper
IKEA and Fantastic Furniture
The companies provide home and office furniture, wooden, plastic and metallic. Though furniture business is expected to be the most successful business ever, owing to the ever-increasing demand for furniture by a growing population and a changed lifestyle, it has not been so.
6 pages (1500 words) Research Paper
Apple Store
In the business empire, marketing is a vital component that seeks to guarantee a business a profitable existence. In essence, marketing is a communicative process towards consumers to which the worth of a product or a service forms the basis of the communication.
5 pages (1250 words) Research Paper
Nike store
It took this name from a Greek goddess of victory. Nike’s first products were track running shoes. A soccer shoe by the name Nike was the first shoe to be sold to the public. Currently,
5 pages (1250 words) Research Paper
IKEA: Furniture retailer to the world,
However, accessing new ventures is challenging and demands creative management (Parker 2005). Additionally, enrolling in the global market meant building IKEA’s stability when trading as a block within the European Union. As such,
2 pages (500 words) Research Paper
Guillermo Furniture Store Analysis
This competition had a negative effect on Guillermo’s operations leading to a reduction in profits. As a result of this, Guillermo realizes that he needs to act quickly or go out of
6 pages (1500 words) Research Paper
Apple Store
This store has gone through a series of expansions. The latest expansion of the store was on February 2012. Residents of Pasadena were looking forward for the new store, and as always, the store did not let them down. The
2 pages (500 words) Research Paper
Compare and Contrast of Renaissance Furniture
The chairs were not rectangular and carved anymore; they were now smaller and more comfortable with wooden seats and cushions on them. Cabinets, wardrobes, and chairs were massive and heavy weighted. They were heavy and thick carved by hand expressing
2 pages (500 words) Research Paper
Consumer Analysis of new video game store in London Ontario
Customer analysis is comprised of two primary aspects: a demographic profile and a behavioral analysis. Demographic profile includes such
3 pages (750 words) Research Paper
Office furniture ksf
Due to the severe competition in the furniture market, furniture manufacturers have been forced to look at the emerging technologies in order to secure a competitive edge. One of these is the adaption of Flexible production processes, that promise to enhance
2 pages (500 words) Research Paper
Hire a pro to write
a paper under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
Comments (0)
Click to create a comment
Let us find you another Research Paper on topic Guillermo Furniture Store Analysis for FREE!
Contact us:
Contact Us Now
  • About StudentShare

  • Testimonials

  • FAQ

  • Blog

  • Free Essays
  • New Essays
  • Essays

  • The Newest Essay Topics
Join us:
Contact Us