Furniture Guillermo's

Background

Guillermo’s Furniture is currently facing tough competitive opposition; it had been a very successful furniture store in Mr. Navallez town of Sonora, Mexico. Guillermo had the advantage based on location and the climate of the economy and resources in Sonora. With an overseas competitor using a high-tech furniture production approach and larger furniture retailers entering into Guillermo’s current target market, both offering lower prices than what Guillermo can currently afford, there is a significant decrease in his profits however cost is continuing to increase.

Guillermo Furniture Alternatives Analysis

The following is the analysis of the current alternatives available to Guillermo’s Furniture store. The alternatives that will be addressed are the Current Project, High-Tech Project and the Broker Project.

Current Project

Creating a partnership with the Norwegian furniture store in the US, Mr. Nallevez could take advantage of his current network and become the most sought-after representative within the merger. The pros of this alternative are that this could quickly allow Guillermo Furniture store to grow financially. Reason being Guillermo’s will have the resources of the combined two companies, and in turn eliminates his largest competitor. The creation of a partnership would improve performance while cutting the cost of operations. With better performance and lower cost in operations both companies will be able to sell more furniture, without the need of trying to invent new ways of being competitive in the market.

In addition, there is not any additional cost for equipment upgrade on Guillermo’s behalf. Another reason for merging with the Norwegian company is to maintain the pure existences of Guillermo’s furniture. Guillermo is a high-end furniture maker in a market that has a demand for midrange furniture, to stay pertinent with profits in the furniture making business merging with the larger furniture store that has the resources to satisfy the changing market can save Guillermo’s furniture subsistence.

The con’s for the partnership is based on a work/life balance. Mr. Nallavez holds his family as his most important asset with the partnership he presumes that much more time would be spent in managerial duties, and he frowns upon taking away valuable family time. Though the con of this option is intrinsic, it weighs heavy in the decision-making process.

Along with this analysis the supporting calculations, that are being considered for