Guillermo's Furniture Store Scenario

Production: We will significantly increase automation levels on our products. However, because automation sets limits upon our ability to reposition products with R&D, we will postpone automation for the High End and Size products until they arrive in the Traditional Segment. We will prefer second shift/overtime to capacity expansions.

Despite being well-established, over the last three years, sales at Atherley Furniture Company have remained the same while profits have declined by almost 24%. Their chair division produces three different types of chairs, the Atherley, the Caledonia and the Parkdale. Each model has its own production plan and production costs. The increasing production costs, alongside the intense competition the company faces, have become a great cause of concern for John Atherley.

* Sales results over the past 5 years indicated strong growth in forklift and truck sales. The rental market has been in decline. Result in company decided to reposition itself to focus solely on retail sales and service and exit the rentals market.

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.

I came with this question because my Fiancé works with a well-known company in Santa Monica. This company is called “Victory Furniture.” This company from what I seen in person and from what my fiancé has told me, can be in great demand with the right season, but it also has its down side when the season is bad. Which I believe every company faces at some point. The main basis of this company is outside furniture. It was established in 1945, in the State of California. A third generation own company. The store symbolizes the hope and optimism felt by Americans in the post-WWII boom. The store’s name commemorates the sacrifices and glory of a growing nation – and to this day serves to reflect the commitment invested by three generations of family to build and maintain the American dream. The Safran family has created a successful furniture business from its beginnings in a modest, storefront location in West Los Angeles. The family team now operates two dynamic showrooms in Santa Monica and Irvine. Their showcase varies in the luxurious furniture and accessories from a wide range of designs and taste. Although each generation has brought its own talents to the various aspects of the retail environment, through the years a constant has remained, Victory Furniture carries the widest selection, offers the fairest prices, and provides the finest customer service. Victory Furniture pushes its best to provide is their finest customer service, and as a result enjoys the gift of a

IKEA had to start designing more of its furniture in house and found a manufacturer who would produce IKEA-designed furniture. In this process, the manufacturer was in Poland where they found it is 50% cheaper than to manufacture in Sweden, allowing him to cut prices even more. Here the furniture industry continued to evolve with new technology and cost savings.

Located in Sonora, Mexico, Guillermo Furniture has historically done well as a furniture retailer. Its success, however, has been challenged by the introduction of a major competitor, an international chain that has recently opened a store in the community. The result has been a rise in costs, a drop in

Comparing these numbers to the selected industry ratios of the same fiscal years it shows that in the year of 200X the Return on Assets (ROA) for the industry was 7.94% whereas Lamar Swimwear’s ratio was 0.08% higher at 8.02%. This is above industry standards so it shows that the company is thriving in the industry, but that is only one year. In the next two years the ratios show that Lamar Swimwear made a drastic decline of 1.22% in 200Y and another decline of 1.10% to 5.70% in 200Z. With the decline of 2.32% in ROA in two years these numbers tell us that the cost of goods (COG) has increased considerably and that Lamar Swimwear has not adjusted to these changes well. If Lamar Swimwear does not adjust and offset the increase of COG by selling more products then it will continue to decline and not be able to thrive in its industry. While the profitability ratios give a great insight into a company’s ability to maintain, there are other ratios, such as asset utilization ratios that let one know if resources are being used in the best way.

The addition of technological advancement in the business has increased the competition very much. There are several companies that rely totally on the technological development as that helps them control the cost and produce a high quality product. The current environment of the business demand that this advancement should be added to all the factors of the organizations like products and services, processes performances and costs, and all other organizational activities. It is one of the main aims of the company to produce products that are demanded by the customers but on the other hand they should yield profit as well. If a product has high demand as well as very high cost, the company might not produce such product if it fails to earn profit in that.

According to the Scenario Guillermo's competition uses for production computer controlled laser lathe producing exact cuts in wood. Highly automated, the plant uses very little labor as robots even perform the precise movement and assembly functions. Guillermo understand that the cost of the technology is immense but contemplates to make some investment. Today our way of life has changed greatly, because the influence of new technologies. For Guillermo technology represent the reduction in the labor needed for production. This production can move between products quickly, and it runs on a 24-hour basis, as the shift-differentials are more than offset by the reduction in labor.

The process of the design must be cost-efficient in order to maximise the profits of the product. Furthermore, due to the cartoneros’ limited funds, there are few choices for available materials. Due to the plight of unemployment in Argentina (Trading economics, 2014), with 7.1 percent unemployment (19 May 2014), the market price of the product needs to be low enough to motivate the locals’ demand and consumption.

As a popular brands IKEA categorized its unique product lines as Baroto et al., (2012) construed, with the application of differentiation by IKEA’s R&D team they are giving more effort and focus on market research to fulfill the segmented customer’s requirement with low prices, self-assemble and unique product lines. IKEA integrate all of strategies to have a competitive advantage with competitors in the market for a long-run business (Miller & Le Breton,

Application of new technology to generate process efficiencies, and changing market demand for more value- added services.

Either way, the aspect of pricing and finding a niche was particularly important for G. in the town that Seattle had become given that all its benefits had attracted a web of competing industries with laborers able to raise their prices. No wonder, then, that G. had problems with his 'profit margins'.

7. Advances in Information Technology are so rapid that significantly faster, processing speeds and less expensive multi-function computers system are making automation cost- effective