Guillermos Furniture Concepts Paper

When owning a business there are always going to be competitors who are going to want to take or share your market. The market that Guillermo is in is called monopolistic competition; where rivals businesses sell different varieties of the same product or service, as well as close substitutes of each others product or service (ThinkQuest). For example, a lot of manufacturers sell various styles of furniture. Guillermo has to think about how he is going to beat his competitors and include finance concepts that will help his business stay on top. Even with the best product and marketing plan in the world a business can still fail without proper financial planning.

Guillermo should consider that greater return requires greater risk. It is a simple relation between risk and return. For return to increase, Guillermo absolutely must take on more risk. Guillermo did spend time looking at the competitors new technology, and found out that the cost of technology is massive. With this Guillermo can also save money because it will decrease his production costs. Guillermo will have to take risks, and not play it safe. He now has competitors in his market that he needs to be able to compete with. Guillermo might also have to give up some time with his family in order to keep his business successful. This is an example of an opportunity cost. It is the cost of an alternative that must be forgone in order to pursue a certain action. It would be an easy decision if Guillermo knew the end outcome; however, the risk that he could achieve greater "benefits" with another option is the opportunity cost.

Guillermo can also beat his competitors by having the next best thing, or succeeding by his products. Being the innovator and finding ways to gain customers is what Guillermo needs. Make best relation with the customers because customers always win and should always keep in mind that the business has started which is impossible without the customers. So the better customer services Guillermo provides, will increase the market worth and also will beat competitors. Meet the criteria what your customers want. Guillermo should also market himself. With the patented process for creating a coating for his furniture and another product that he could buy that will add the same amount of value for the furniture is a great idea. With these new products, this sets Guillermo aside from his competitors. This is an example of an expected value, because Guillermo has a probability. It is an expression of the long-term average odds that something will happen. He is not sure that the outcome will be positive, but it is worth a try. With this Guillermo will need to show customers that he has new products, so he will need to advertise on his website, tv, billboards, or even in the newspaper.

Competitors are the real way to guide the business because if Guillermo has to make his business successful then he should know what his competitors want to achieve,