Guajilote Case Study Essay -- Business Management Strategy Formulation

Guajilote Case Study This essay examines the case study of the Guajilote co-operative, a co-operative with a licence to collect and sell fallen timber in the Honduras. The paper is in five sections; giving an impression of the co-operative as a business venture, conducting a SWOT analysis of the company, looking at any competitive advantage or strategy. Describing the value chain and considering strategic alternatives open to the co-operative. Solution 1. The business is certainly located in rural areas and considerations of how this may affect tribal people should be considered. The use of natural resources can be profitable but environmental considertaions such as the impact of deforestation on the global climate needs are vital. Mahogany is a rare wood and the tree does take a long time to grow. This business venture should plant so many trees for each Mahogany tree it finds felled. 2. SWOT Strengths: 1. Setting up hand sawmills at the fallen trees. 2. Developing a knowledge of markets and business practices. Weaknesses: 1. Massive funding required to drive operations. 2. Size and growth of the company is limited by the amount of mahogany produced. 3. Hard to find and process the trees. 4. Lack of adequate transportation. Opportunities: 1. Contributing to Honduras' economic growth. 2. Establish a good working relationship with distributors like Santos Munguia. 3. Establishing direct links with local furniture makers. Threats: 1. Deforrestation and impacts on the environment. 2. Pressure groups like Greenpeace and CITES. 3. Natural disasters like forest fires. 4. Decline in numbers of trees. 5. Treacherous terrain and wet weather. 6. Lack of co-operation from Honduran authorities. 7. Corrupt distributors not paying the workers for the wood worth. 3. This comapny does have a competitive advantage in that it can develop its links with local furniture manufacturers. It is possible to operate within the constraints of Cites, if transport costs are met by local buyers. Help provided to these local manufacturers may be achieved by setting up IT systems that monitor input and output of wood. Guajilote's strategy is weak in dealing with deforestation issues. It should engage in planting more mahogany trees. Greenhouses could be set up to cultivate the seedlings. The local population ne... ...lso destroy their seeds. Mahogany could therefore be quickly eliminated from a site. Each year, Guajilote lost more area from which it could take mahogany. To make matters worse, many Hondurans considered the area around La Muralla National Park to be a frontier open to settlement by landless campesinos (peasant farmers). In fleeing poverty and desertification, people were migrating to the Olancho province in large numbers. Not only did they clear the forests for cultivation, but they also cut wood for fuel and for use in building their homes. Most of the new settlements were being established in the area's best mahogany growing habitats. Another concern was that of potential restrictions by CITIES (the international convention on trade in endangered species). Although trade in mahogany was still permitted, it was supposed to be monitored very closely. If the populations of the twelve mahogany species continued to decrease, it was possible that mahogany would be given even greater protection under the CITIES framework. This could include even tighter restrictions on the trade in mahogany, or could even result in an outright ban similar to the worldwide ban on ivory trading.