Guillermo_Furniture

Guillermo Furniture Store Scenario FIN/571 July 13, 2010 Thomas Grimmer Guillermo Navellez is a furniture maker from Sonora, Mexico. Mexico is one of the largest furniture manufacturers in North America ( University of Phoenix, 2007). Guillermo makes handcrafted furniture for a slight premium. In the 1990s, Guillermo experienced a large dent in his business. A new competitor from overseas entered the furniture market, and the sleepy communities in Sonora woke up as one of the largest retailers in the nations headquarters. Guillermo also experienced more events in the 1990s that resulted in his sales to slip in the furniture business. Guillermo had a few options to consider for his company during the 1990s. Guillermo however did not want to merge with a larger company, nor did he want to acquire another organization to expand his management responsibilities. If Guillermo considered expanding his management it would reduce and affect his time with his family. Guillermo concerns about his financial principles, market share, family and business ethics led him to the decision to pursue becoming a distributor for a company that needed a manufacture( Emery, Finnerty, and Stowe (2007). The company’s ethics assisted Guillermo with how he could become a distributer for this company. Guillermo’s ethics would help him develop and retain some of the high-end custom work, however he wants to move from manufacturing to distribution. Guillermo’s organizations financial interest, ethics, and his actions assisted him in the making ethical decisions for his company. With Guillermo wanting to secure financial stability, he will patent a coating for furniture that when initially created it was a common flame-retardant; then later the coating become complete and stain resistant. Guillermo could use his budget in decision making process by making wise decision on how he will allocate money for products, direct material, labor time, direct cost, price and plant overhead. Guillermo will use a flex budget along with fixed incomes for his company to manage his funds along with his performance reports to make a profit. Guillermo used sound accounting decision by budgeting out for a cost effective plant overhead. The most relevant information for Guillermo to consider when making decision is assets and liabilities. Guillermo needs to know what his company is producing, at what cost, and how much his company will profit. References Emery, D. R., Finnerty, J. D., & Stowe, J. D. (2007). Corporate financial management (3rd ed.). : Prentice Hall. University of Phoenix. (2007). Guillermo's furniture store scenario [Computer Software]. Retrieved from University of Phoenix, Simulation, FIN/571- Corporate Finance website.