Guillermo_Furniture

Guillermo Furniture Store After years of successful operation, Guillermo Furniture Store is facing its toughest challenge. With the new foreign competitor and the sudden growth in the small community, Guillermo’s business has suffered significantly. The largest retailers in nation have moved their headquarters to Sonora and finally Guillermo has lost competitive advantage due to significant increase in the cost of labor. Guillermo Navallez has realized that he does not have the business advantage with respect to the new circumstances. To create that competitive advantage once again, Guillermo has three alternatives. The decision that Guillermo is facing is whether he should operate as a hi-tech manufacturer, team up with a foreign manufacturer and sell furniture as a broker for a Norway firm and coordinate the distribution channels for that firm or continue with the current operation and use the new-patented technique of coating furniture. The concept of value is one in which the marketer seeks to increase the benefits and usefulness of the product or service to the customer. In the context of Guillermo Navallez, the competitor from abroad is able to make and sell furniture to customers that exactly match the specifications of the customers and that also at rock bottom prices. Similarly, the largest furniture firms in Mexico are able to provide greater value for money to the customers than what Guillermo Navallez is able to provide. Finally, Guillermo Navallez is seeking to increase customer value by coating his furniture with his patented process. The main problem for Guillermo Navallez is that the competitor from abroad and Mexico's largest furniture makers are able to provide far greater value to the customers than what he can provide. The concept of economic efficiency allocates resources across activities in a manner that maximizes the value they create. In case of Guillermo Navallez, clearly the automatic method of the foreign competitor efficiently allocates the resources that are used and leads to greater value. Similarly, the largest competitor in Mexico is possibly making use of economies of scale and is achieving greater value than what Guillermo Navallez can. From another perspective, economic efficiency is the measure of the sum of consumer surplus and producer surplus. It is clear that the competitors of Guillermo Navallez, namely the foreign company and the largest furniture maker in Mexico are having a larger consumer and producer surplus. Guillermo Navallez has used the concept of observing financial transactions to assess the activities of his competitors as well as develop and evaluate his alternatives. Guillermo Navallez has observed the financial transactions of low cost sales by the foreign firm. It has also observed the financial effects of low cost housing, and overall development of Sonora. Guillermo Navallez has also observed the financial transactions that have raised the cost of labor. Guillermo Navallez has also observed other financial transactions. He has observed (evaluated) the effect of acquisition by a larger company. He has observed the financial transaction effect of taking over another company. He has observed the financial transactions of the foreign competitor and his high-tech solution. He has also observed the financial transaction of buying high tech manufacturing facilities. He has also observed the financial transactions related to 24-hour shifts run by the high tech competitor. The concept of observing financial transactions is important from the perspective of Guillermo Navallez because it helps him develop alternatives and make a logical selection of the alternatives. References: www.longviewusa.com/node/521 valueexpectations.com/.../economic-competition-competitive-advantage-period edq.sagepub.com/cgi/content/abstract/10/4/315 www.valuebasedmanagement.net/faq_what_is_value.html library.creativecow.net/articles/kolb_tim/value.php www.wisegeek.com/what-is-value-theory.htm economics.about.com/od/productivity/f/economic_eff.htm www.ingrimayne.com/econ/Efficiency/WhatIsEff.html www.investopedia.com/terms/e/economic_efficiency.asp www.businessdictionary.com/.../economic-efficiency.html