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Guillermo Furniture Store Concept

In: Business and Management

Submitted By drobinson102006
Words 875
Pages 4
FIN/571
January 09, 2012
Danica Djordjevich

Guillermo Furniture Store Concepts Guillermo has a furniture manufacturing company is Sonora, Mexico. Guillermo has a good location for his business because of the supply of timber for his furniture. Inexpensive labor and slight raise in the price of the furniture had Guillermo making a good profit. The business was going well for Guillermo until a new competitor entered the furniture market. At the same time one of the largest retailers in the nation’s headquarters had a considerable influence on the communities in Sonora. The rise in population and jobs increased the cost of labor causing Guillermo’s business to suffer. This paper will discuss and define the six foundational principles associated with the context of this scenario. The six foundational principles related to the context of the scenario are: the behavioral principle, principle of valuable ideas, options principle, principle of incremental benefits, principle of risk-return trade-off, and the principle of diversification.
The Behavioral Principle The behavioral principle states if a person is unsure of what to do look at what everyone else is doing for guidance. Guillermo needs to determine what would be best for his business to be just as successful as or better than his competitors. Guillermo should consider making changes to his business, such as coordinating his existing distributor network and essentially becomes a representative for this other manufacturer (University of Phoenix, 2010). Guillermo should also reconstruct his company from a manufacturing company to a distribution. When applying the behavioral principle the first step is to decide whether the company you want to imitate is the best company to follow. The second step is to “determine from their action what your best course of action would be” (Emery, Finnerty, & Stowe, 2007)....

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