Guillermo Furniture Store - Recommendation
Today’s business industry, business decisions or transactions are implemented under the principles of financial, ethical, and behavioral decisions. Decisions are prompted from the Principle of Self-Interested Behavior, a course of action most financially advantageous for themselves (Emery, et.al, 2007). According to the scenario, Guillermo’s Furniture Store, Guillermo Navellez, owner of local furniture manufacturing plant, has identified several key alternatives which will affect his decision regarding production, labor costs, organizational management, and organizational stability.
After reading this paper, the reader will have an understanding of two key points. The first point is how
…show more content…
In fact, he must observe what the competitors are doing. This approach is referred to as the “Behavioral Principle” determining the best financial outcome for his business (Emery, et.al, 2007). By applying this principle and accepting the recommendation of consolidating with the competitors, will allow for Guillermo to examine the advantages and disadvantages of the given recommendation. According to the budget, this may be beneficial for Guillermo, considering his overhead, and labor cost.
Justification for the Recommendation
Changes in organizational structure are essential in the operations of Guillermo Furniture Store. Due to economic changes, Guillermo faces a great deal of financial decisions to gain and maintain a competitive edge. Profitability, book, and market value are components, which are analyzed to compare assets, liabilities, dividends, earnings, and prices. The fluctuation of costs is the driver in Guillermo’s decisions.
Advantages of the recommendation identified for Guillermo to consolidate with the business, Norway, are as follows:
1. Save costs by implementing the high-tech method- By implementing the recommendation of consolidating with the competitors, this approach will allow for both companies to save labor costs, salary expenses, materials costs, and other operational expenses.
2. Increases production - By selecting the recommendation of consolidation, both managers can outline a new
This paper was prepared for MKT 120, MODULE 3 CHECK YOUR UNDERSTANDING taught by PROFESSOR K
Stakeholders invest money with the intent to gain return in the future. It is important for stakeholders to gain access to information and evaluate the firm’s performance before they put money in it. On the other hand, it is the firm’s management team job to make decisions that would maximize the long term value of the firm’s common stock. The intent of this paper is to analyze Costco Wholesale Corporation’s financial performance and to assess how efficient the business has been over a five year period as well as to provide recommendation for financial management strategy.
One of the most important parts of a business is the financial management. Each and every other company always strives to have the best management when it comes to its finances. Most organizations have come up with plans and marketing strategies. This is due to the fact tat when companies finances are poorly managed then definitely the whole company is likely to be in trouble or even come down. The financial techniques and principles in most cases comprise of quite a number of aspect for instance those that we intend to look at in this paper-the financial reporting. This will basically comprise of the quality of data and information that the company produced to some of the various stakeholders. Other than that, the paper will also analyze the financial position and performance of the organization using accounting ratios. Another important aspect of financial principles is costing. This basically entails the cost of producing goods and services in the company and how it generally affects the overall performance of the company. The paper will also delve into how important costs in the pricing strategy of the business are. It will further come up with a costing and pricing system that can help the company improve. Last but not least, we focus on the company's budgets and budgetary control. Here there are very important areas that have to be looked into, for
There are three alternatives available to the Guillermo’s Furniture Store. One is they can keep the current position or they can become broker or make it high-tech. Therefore, Guillermo’s furniture store can divide the project into current project, High tech project and the broker project.
Cost has traditionally being a major influence on all business as all businesses desire to achieve maximum efficiency as it is a vital factor for businesses in order to reach the ultimate goal and success. Businesses sees cost as the key value to success and aims to become as much cost efficient as possible, by implementing a cost-leadership style approach to the operations variable cost or fixed cost ,while maintain the expected profit margin, business is able to gain a competitive advantage over their competitors in their target market. This is called cost-based competition. By determining the break-even point and applying cost saving strategies, to reducing cost, businesses who apply cost-based competition in their operations is able to maximize the profits and lead business to success.
Read ONLY the introductory paragraph of this paper. Then answer the following questions about the introduction:
In view of the financial statements attached to this paper, Kohl’s acquired debt increased both in dollars and as a percentage of sales. Gross margin as a percentage of sales was 36.4% in 2014, much lower in 2013. The merchandise margin increased, but was offset by higher shipping losses attributable to growth in the number of on-line orders. Selling, general and administration expenses both increased in dollars and as a percentage of sales. There are numerous factors that impact the success of department stores such as, political and
c. they believe they can increase the efficiency of the acquired unit by transferring capital, technology, or management skills.
The introduction provides sufficient background on the topic and previews major points. The conclusion is logical, flows from the body of the paper, and reviews the major points. Readability and Style 15 percent Percent Earned Comments:
This analysis examines the economic strategy of Vera Bradley. I took a closer look at the strategic moves of this Luxury goods manufacture. The owners going from making colorful patterned duffel bags and suitcases, has now become a household brand. Their decisions to differentiate ultimately shaped the growth of their business. With a declining fiscal year, Vera Bradley decided to implement a new strategy that will be sure to revamp growth. To further explore the challenges that continue to occur throughout this case, I analyze those challenges and suggest tools and techniques that would help improve the economic strategy of Vera Bradley.
In the next section the book presents two types of theories: game theory and behavioral theory. Game theory was created over 2,500 years ago by the Chinese military (Ho & Weigelt, 1997). It has only entered the business environment recently but still uses the same concepts and is a tool for doing strategic analysis. Game theory is essentially a way to make decisions. How will it affect your company? How will it affect your competitor? It takes into account cause and effect, considering all possibilities and what resources will be needed. The second theory offered is behavioral theory. This theory investigates why it is that managers often make irrational decisions that may negatively affect the future of the organization. Often, managers make decisions based on their own biases and not necessarily rational like the game theory.
1. Williams-Sonoma has experienced strong growth in the past year, but this is on the back of a strong economy and in particular a strong new home market. The furniture business is strongly correlated with the strength of the real estate market. In this respect, the company's strategy is largely irrelevant, because within the next five years the real estate bubble will burst and Williams-Sonoma will suffer a major downturn in its own results as a consequence. However, this reality shows that the company perhaps lacks sufficient differentiation, and can only be expected to perform roughly in line with the housing market. It is neither outperforming competitors nor is it underperforming. W-S has sufficient differentiation within the furnishings and home products segment, and has a fairly strong brand name in the segment. The company's status as a mass-market premium company allows it to grow strongly in strong economic times, but also makes it particularly vulnerable to economic downturn, because not only do consumers redecorate at greater intervals, but they will trade down to more affordable stores when they do.
In business it is essential for owners to consider important factors when mapping out their business objectives. Economics used as a tool to solve coordination problems. They include what and how much product to produce, how to produce their product, and for whom they are producing. In order to effectively answer these questions, economics is used. Colander (2006) describes economics as “the study of how human beings coordinate their wants and desires, given the decision-making mechanisms, social customs, and political realities of the society” (p. 4). The foundation of economics is based on several factors that assist in understanding an economy.
Cartwright is a retail distributor of lumber products. It built its competitive edge based on pricing and having a careful control over its operations. The company reported an operating income of $86,000 and $111,000 in 2003 and 2004, respectively. This is a 29% increase in operating income in one year, which shows the firm’s strong ability to generate cash. The firm’s account receivables and inventory are increasing from year to year which is a good sign of a growing business. Cartwright is not an asset intensive company. It does not have to have huge fixed assets; most of its assets are cash, accounts receivable and inventory which all depend on future sales. Sourcing of materials is managed very well, purchased at discounts most of the time and contribute to having lower prices.
The case study is Macy’s Department Store Repositioning. The key problem is that the traditional department stores sales and profits are declining. There are specialty stores, discount stores, and online stores that offer similar products at a fraction of the cost for the most part. However, in the declining market for the department store industry, Macy’s consolidated stores, established a national department store and continues to make a steady profit. It is usually the time to divest, sale,