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STR 581 Strategic Planning & Implementation

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University of Phoenix
Strategic Planning & Implementation
STR/581
Recommendations for Guillermo Furniture
Guillermo furniture is a medium size industrialized company in a small
town in Mexico. The organization enjoys the fact of being one of the
largest furniture manufacturing companies in town and has been a major
player in the local industry for a number of years. With the company
facing many new competitors, Guillermo Navallez is forced to make
some tough management decisions that could potentially make or break
the organization. The new competitors introduce the best technology in
the furniture making business which provided the rivals with an
advantage over Guillermo furniture by offering their products at a
cheaper price to the public. In order for the company to be successful,
management must incorporate and utilize budgets and performance
reports when making critical financial decisions for the company.
Management must also take in consideration the ethical obligations
when making these financial decisions and how this principled
responsibility influence decisions of management. Prior to the new
company entering the local industry, Guillermo is one of the biggest
manufacturing furniture company in Sonora, Mexico. The new
competition is making it complicated for Guillermo to remain the
dominant player in Sonora because the competitors are able to produce
their merchandise at a cheaper cost because of the new technology
which in turn makes it cheaper to offer it to the public. In addition, the
sudden arrival of the competitor caused it to be more expensive for
Guillermo to acquire and retain employees. According to Guillermo’s
budget statements, the overall decrease in sales has made it tough for
the company and the increase in fixed cost because of retaining the
employees has made it costly for the company to keep the production
line running.
The company needed to make some adjustments in order to remain in
business. A business can’t anticipate to remain stagnant in its given

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industry and a manager can’t expect to keep the same business
operations, the company must adjust to the demand of the market to
remain profitable. When a business remains dormant and the manager
doesn’t make any adjustments to the changes of the business
environment, the competitors will make sure to pick up on the
opportunities that are available for the taking. The manager of Guillermo
must be able to predict anomalies in the budget statement to protect the
overall objectives of the company because this can provide
management with strategic ideas on how to protect the company’s
overall wellbeing. There are several options that management can
implement to make certain that the company stays competitive in the
furniture industry. Management can hire a temp agency to accommodate
their staffing needs. This method can potentially decrease the
company’s fixed cost by temporary hiring employees to run the line. In
addition to the upgrades to the staffing system, the company can also
purchase the new technology and incorporate and train the temp
employees to run the new equipment. This new system can potentially
decrease the cost per component but will increase initial cost because of
the purchase.
It’s vital to the company’s success to have ethics incorporated in all
aspects of the business. For the business to accomplish its long term
goals and gain lasting customer relationships the dealings must be
based on ethics. Ethics leave a lasting notion on the consumers that
ultimately build trust to the interaction which then cause them to come
back for more business. It’s important for company to ensure that all the
furniture coming out of the production line has superb quality. This can
be guaranteed by implementing a six-sigma process into the
manufacturing line. It’s also important to utilize ethics in reporting their
financials to internals and externals partners. This practice will protect
the company from potential legal exposure.
Once the following ethical practices and performance recommendations
are implemented to the company’s regular business operations, the
company will maintain and secure its dominance in the furniture industry.

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References:
Horngren et al (2008). Introduction to Management Accounting (14th
ed.). New Jersey: Pearson Prentice Hall.

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