Guillermo’s Furniture Store Scenario Essay

fiscal rules, monetary markets, and business ethics construct a major(ip) infrastructure for financial decisions that all managers or supervisors must establish on a constant basis. The purpose of this paper is to explain the financial concepts tack together in this weeks readings and how these concepts relate to the Guillermos article of piece of furniture neckcloth Scenario. According to the text reading, the principles of finance, described in this section and the two that follow, be based on logical deduction and on empirical rumination (Chapter 2, p. 20). Until the late 1990s, Guillermos Furniture interpose retained its competitive advantage in the furniture market. The arrival of a novel overseas adversary entering the furniture market, decreased furniture prices, and increased labor cost posed as a new challenge for the organization (University of Phoenix, 2009).For several(prenominal) years, Guillermos Furniture shop class dominated the furniture manufacturing mar ket with the standard supply of timber to piss a variation of types of furniture. As a resolvent, the proprietor did not know how to forecast the new challenges that faced the company. As the new competition starts to enter the furniture market, these competitors have developed an modern technology that produces a more customized product to meet consumer demand. With labor be rising, Guillermo did not realize these changes and how this would affect his current business. Guillermos Furniture Store will exact to consider the principle of self-interested behavior to help smirch the risks associated with the changes in the furniture business to meet customer expectations.The concept of the principle of self-interested behavior basically implies that with a level playing field in the furniture business meaning all aspects of the business equals one another, indeed Guillermo will lack to act or perform in the outdo financial interest of his own company. One option for Guillermos Furniture Store would be to purchase a high-tech laser chew out operating equipment for manufacturing the product. This would be an pillow slip of the principle of self-interested behavior as it is an heavy corollary of this principle (Emery, Finnerty, & Stowe, 2007).This action will bring on a more preferable competing action for the benefit of his organization. Guillermo could also consider becoming a furniture manufacturer for a Norway company by facilitating all distributing pathways and this behavior is an example of the principle of valuable ideas. Emery, Finnerty & Stowe state, new products or go can create value, so if you have a new idea, you might then alter it into extraordinary positive value for yourself (Chapter 2, p. 24). This type of behavior is clear if the owner decides to patent the current process for coating the furniture as it creates new ideas.Guillermo will need to consider ways to create value by developing exceptional customer service with the creat ion of better products and services at the lowest possible price without sacrificing the quality of the product or service. The competition is fierce overseas as a direct result of inexpensive parts and labor. The furniture store will have to create the lowest and top hat quality product to meet consumer demands. Guillermo will need to meet the competition with its market presence by focusing on remaining competitive with the patent process.In order to make a strategic decision on which process will be best for the furniture store, Guillermo will need to take a closer mien at the financial statements to make the financial decision. Strategic analysis of financial transaction is one of the most vital facets of an organization with regard to valuable business decisions. This type of analysis assists any business owner or manager in deciding which type of alternative or send off would be most beneficial to the company. These decisions should also consider the impact on the market a nd the competition as well as the organization. Guillermo will need to discover the financial impact of either choice mentioned above to make the best decision.ReferenceEmery, D. R., Finnerty, J. D., Stowe, J. D. (2007). Corporate Financial Management (3rd ed). Chapter 2 The Financial Environment Concepts and Principles. Prentice Hall, Inc A Pearson Education Company. University of Phoenix. Guillermos Furniture Store Data. Retrieved from University of Phoenix, Corporate Finance-FIN571 website. University of Phoenix (2012). Guillermos Furniture Store Scenario. Retrieved from University of Phoenix, Corporate Finance-FIN571 website