An Investment Analysis of Honduran Teak Plantation Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

An Investment Analysis of Honduran Teak Plantation Case Solution

Problem Statement

In the given case of growing teak by using the fast growth model by the new company Beyond Forestry this will ensure greater return from investment by Cogent Partners however, there is a significant doubt that whether this return can be ensured or not by viewing the risk attached with this investment, which includes the potential of the new company which has no history in the past as well as political, environmental risk as well as the timber specific risk.

Analysis of the problem

In order to analyze the given scenario, qualitative as well as quantitative measures would be checked which can help generate some conclusion for the said problem.

Qualitative Analysis

The best way to analyze the given proposal qualitatively is to analyze its strengths, weakness, opportunities as well as threats, which means the internal as well as external analysis.

Internal Analysis

The internal analysis of the said project required analysis of the project’s strengths as well as its weaknesses which are summarized as below:

STRENGTHS OF THE PROJECT

The first and the foremost strength for the said project is increasing the number of demands for the teak from the customers which are yet to be captured whereas, the supply on the other hand is very limited due to numerous constraints.

Teak as discussed earlier is considered as the diamond among the hardwoods for the reason of its ability to generate excellent returns on investment which is also the key strength for the Cogent Partners as because of this they can efficiently diversify their portfolios by increasing their returns provided in the least cost. The other strength of the project is its strength in saving the environment with the help of plantation which would also help in declining the issues related to global warming. Due to its increasing demand, no more investment would be required to market the products.

The given project would be having the guaranteed future market. Above all there will be very low cost to start up the project, which requires less administrative expense. Due to the increasing global warming, every investor is looking for the projects to be green which is also ensured in the given project.

WEAKNESSES OF THE PROJECT

In order to analyze the weaknesses that are associated with the given project, one of the weaknesses is the timings of returns which the company could expect from investing in the said project as this project, even with the help of fast growth track, could generate returns late.

The minimum time which the Beyond Forestry has committed in growing Teak is almost seven years, therefore there can be significant changes in the future legislation that can have significant impact on the returns for the investors. Moreover, the company is also required to invest in the environmental licensing in order to prevent it from pollution, economic planning process as well as for territorial and land use planning.

External Analysis

OPPORTUNITIES

It can be analyzed from the demand and supply situation of the said project that even with the increasing prices prevailing in the market for Teak, the demand is still rising from the customers whereas, there is no sufficient supply which can cater this rising demand. Therefore, it can be concluded that there is unlimited marketing potential for the said project with the unlimited market growth.

Moreover, the biggest opportunity for the company is that by selling the teak parcel,it can offset the increased initial investment and back up its long term return......................

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An Investment Analysis of Honduran Teak Plantation Harvard Case Solution & Analysis