Guillermo’s furniture store has been successful for many years because it offers unique and quality service to their customers by designing custom made furniture. Recently the company has been faced with local competition, which has caused a financial hardship to Guillermo’s business. The new local company is using technology that is expensive, yet highly efficient in creating furniture that is specialized and produced rapidly for expedited distribution. Although Guillermo’s furniture store is facing this new competition, his company still has much to offer, but has to find a way to stay competitive. The behavior principals can be applied to Guillermo’s furniture store to help give him ideas to stay competitive.

The behavioral principle of signaling says, “When all else fails, look at what other are doing for guidance” (p. 23 Emery, Finnerty, Stowe 2007). Guillermo has already started doing some research on his competition. This will help him understand what they are doing differently, and how they are able to do it. In this case his competition has consolidated their efforts to double their finances and manpower to be able to afford buying the type of equipment it takes to rapidly produce and distribute. The next step is for Guillermo is to do some research on his competitions’ balance sheets and income statements to get more accurate information.

The second principle is diversification. “To make multiple investments in different entities can benefit the company because the more firms investing in will have a better outcome in case a firm fails” (p. 28 Emery et al. 2007). If Gurillimo will expand his business he will need to consider investing in various outlets. For example one could be the distributor of whoever gives him the materials for is flame-retardant coating.

The self-interested behavior principle “helps to understand the human behavior behind making good decisions” (p. 20 Emery et al. 2007). This principal will help Guillermo’s company be a contender in the furniture business. Guillimo will need to transfer to a distributor to stay competitive, and Guillermo may find the concept to adjust to, however, once the process is started it will benefit his business.

“The principle of valuable ideas is a way to introduce new products and services” (p. 25 Emery et al. 2007). Guillermo possesses a secret weapon with his flame-retardant furniture coating. The new product has potential to raise profits, but just has to be advertised properly. Once it