Guillermo Furniture Store Concepts

In: Business and Management

Submitted By bgfish01
Words 686
Pages 3
FIN 571
September 10, 2012
Gurpreet Atwal

Guillermo Furniture Store Concepts
Guillermo’s furniture store is a manufacturer of custom furniture in Sonora, Mexico. The founder and owner, Guillermo Navallez has built up his business over many years and enjoyed success. With recent economic challenges, and pressure from large competitors, Guillermo has to make changes to his operations and how to continue to operate in a competing field as a small business owner directly competing against large national and international chains. Guillermo has researched and used financial concepts to aid his thought process to turn business around and continue to remain open. Some of these concepts will be related in this paper.
Self-Interested Behavior
Guillermo, as a business owner follows one of the first principles of finance that the decisions made in his business are made in his own self-interest. “This principle says that when all else is equal, all parties to a financial transaction will choose the course of action most financially advantageous to themselves” (Emery, Stowe, & Finnerty, pg. 20 2007). Guillermo has kept his operation small over the years and enjoyed his modest success by choice. As a business owner every decision made effects his life. When faced with new competition Guillermo considered expanding through acquisition. He chose not to do so, as “that could affect his time with his family in ways that he will not enjoy” (University of Phoenix Student Portal Corporate Finance, par. 3, 2012).
Behavior Principle
Based on Guillermo’s decision to remain local and independent, he conducted research into his competition to understand how they operate and what made them successful. This was done not only to aid in continued competition but also to see what he could do differently. Guillermo is using the behavior principle by looking at what others are doing…...

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