Furniture Store Analysis - Essay Example

Guillermo has looked at a number of alternatives and this paper will explore those alternatives answering the following questions: 2. Guillermo’s saw an opportunity for channels to distribute in North America. That was because the rival was not operating furniture outlets favoring and was relying on chain distributors. That meant Guillermo would be able to coordinate the existing distributor network and essentially become a representative for the manufacturer. 6. The advantage that Guillermo has found has been the production that will be moving the products quickly, and it will be running on a 24-hour basis.

There will be shift-differentials that will be offset by the reduction in labor. There can be an increased effort to increase the profits and that can be meant to automate. That will decrease the cost of labor. The main aim would be to increase the profits and production and that means the cost of labor has to be bought down. That means the alternative that will be looked is Guillermo then spent some time looking at the foreign competition and their high-tech solution. Essentially, their production utilizes a computer controlled laser lathe to produce exact cuts in the wood.

Highly automated, the plant in Norway uses very little labor as robots even perform the precise movement and assembly functions. The cost of the technology is immense, as is the reduction in the labor needed for production. In addition, the 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. Converting his production to this model would be expensive, but he saw how he could also decrease dramatically his production costs.

The first method of calculating the financial value is to determine the market value multiplying the quoted share price of the company by the number of