Guillermo Furniture Store Recommendation

Topics: Income statement, Cash flow, Revenue, Generally Accepted Accounting Principles, Net income, Cash flow statement / Pages: 8 (1966 words) / Published: Jan 15th, 2013
Guillermo Furniture Store Recommendation
Guillermo’s Furniture is small size furniture store with a low capital income and a simple business structure located in Sonora, Mexico ("Guillermo Store Scenario," 2012). The furniture store was the only manufacturer in the area before the ninety’s, when a new competitor from overseas entered in the furniture market with a hi-tech approach, and woke up the community of Sonora, increasing the cost of labor substantially, and causing prices to bottom out.
As a result Guillermo watched his profit margin deflate as the price fell and the cost rose. Team B will analyze Guillermo’s alternatives to overcome this situation. The alternatives that will be covered in the analysis will be the current, high-tech, and broker alternatives. After the analysis Team B will select the best alternative for Guillermo’s store, and present a Pro Forma Cash flow budget for the next five years, along with a recommendation based on the results of the analysis.
Current Alternative The current alternative is for Guillermo to continue his operation as he has been for years. This has worked for the store in the past and will continue in the future. Guillermo’s business was going very well until competition moved in. Guillermo needs to think about what he needs to do for his business to succeed. First he will need to analyze his current situation, second he needs to create a budget, and a sales forecast for his business, including his current operations, and the effects of economic trends within and out of the furniture industry.
Benefits of the Current Situation
Guillermo currently has a patented process for creating a coating for his furniture that will make the handmade piece unique, and luxurious. The process creates a common flame-retardant coat for the furniture, and upon further processing, the coating is complete and long lasting stain resistant, improving the product quality, and differentiating its product from the competition. This

References: Emery, D. R., Finnerty, J. D., & Stowe, J. D. (2007). Corporate Financial Management (3rd ed.). Morristown, NJ: Wohl Publishing Inc. Guillermo Furniture Store Data. (2012). University of Phoenix. Guillermo Store Scenario (2012). University of Phoenix.

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