Rapid globalization and fast advancing technology are vital ingredients that considerably influence performance outcome of organizations. In such an environment of competitive business, the decision making power of managerial leadership is often determined by the changing socio-cultural and economic paradigms of the region…
Changing cost relationship and behaviour of customers in the fast transforming format of society have become critical elements for making decisions by the managers. In the recent times, the emerging new environment of high competition from overseas businesses has significantly challenged the successful running of Guillermo’s Furniture Store in Sonora, Mexico. The advent of overseas businesses with their hi-tech gadgets and low cost goods has hugely impacted Guillermo’s business. It has not only suffered financial loss but the low cost furniture from its competitors has also resulted in loss of customers who increasingly prefer the new stores as it meets their requirements for inexpensive furniture. The low cost furniture of the competitor has necessitated priority decision making by the manager of Guillermo so it could compete effectively against them. Another important issue that influences managerial decision making is the increasing higher cost of labor which has emerged as a result of large influx of people due to the development of nation’s headquarter in the neighborhood. The development in and around Sonora with new international airport, inexpensive housing etc., has made it highly attractive for myriad businesses and tourists. ...
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(“Guillermo Furniture Store Essay Example | Topics and Well Written Essays - 500 words”, n.d.)
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(Guillermo Furniture Store Essay Example | Topics and Well Written Essays - 500 Words)
“Guillermo Furniture Store Essay Example | Topics and Well Written Essays - 500 Words”, n.d. https://studentshare.net/other/16808-guillermo-furniture-store.
The company had a good business going due to the fact that the firm faced minimal competition, low labor costs, and the firm was able charge a premium price for its products. Then suddenly things changed as a new competitors enter the marketplace.
As indicated in the case investing in robots and expanding the production facility is a very capital intensive exercise and therefore the volume required to make the project feasible is very important. Guillermo is currently producing 2,532 units of the Mid-Grade furniture and 506 units of the High-End furniture
Current Scenario In the wake of globalization and due to philosophy of comparative advantage ruling the roost, Guillermo’s existence has been threatened by one of the overseas manufacturer and marketer ever since it has entered into Mexico. The competitor has been selling the products at competitive prices, which Guillermo is unable to match as that is evident from the text “a high-tech approach, this foreign competition provided furniture to exact specifications and did so with rock-bottom prices” (Guillermo’s Case).
New players came up in the market that was able to produce quality furniture hence a heightened competition. Moreover, the economy grew feebly to an extent the owner might be forced becoming a mere distributor as opposed to a producer. There is a great desire by the company to find the best solution to increase its profitability in the intensely competitive environment.
RECOMMENDED OPTION: Among the given options it is advisable for Guillermo to under-take change in its business model. It shall incorporate the high tech solution for its business to meet the competition and reduce the impact of increasing cost. Among the given options it has mainly been suggested for the reason that with one time investment, it will enable business to reap benefits in the long term unlike other options which would require business to constantly strive to stay competitive.
Guillermo was unwilling to consider merging with, acquiring, or being acquired by, other furniture manufacturers and dealers. He has, however, the option to consider several other alternatives. The case explains what accounting
The competition that entered the Sonora market used automation and robotics in order to lower its production costs. Guillermo needs to find a solution in order to stay in business. The management team of the company has to consider the budgets at hand to