Guillermo’s Furniture Store Scenario
FIN/571
Earnest Jackson

8/14/2012

In the great vacation spot known as Sonora, Mexico Guillermo Furniture was created. Mexico is none as one of the largest furniture manufacturing areas in North America. Guillermo build his manufacturing plant in Sonora, not far from his home. He was a family oriented person that believed in family time, so his goal was to be close as possible. He also built furniture in Sonora because the area was saturated with timber that was used to build tables and chairs. Guillermo’s was a profitable company for a long time, until mid 1990’s. In the 1990’s two of the major organizations joined companies to make their organization bigger and stronger giving them and edge over smaller companies. They focused on builder better quality products in faster time with lower cost. This concept and others the company used made Guillermo Furniture profit margins drop considerably low with production costs increasing. Guillermo even had to lower his prices Guillermo Furniture desperately needed to create a strategic plan in developing a competitive edge to regain profits in this industry. They started to monitor and survey the competitors observing their operation structure. He was able to discover that smaller companies merged in regaining stability and lowering cost creating higher profit margins. Guillermo’s also discovered that the competitive foreign company used innovative technology in the manufacturing process making them a more efficient and effective company. This technology helped the company in quicker production and less labor cost through the use of technology. Guillermo also discovered that the second competitor from Norway had been searching for companies to distribute in North America. Guillermo decided to try and become a