Answer 1:
Greenwood has been quite successful in the United States, which is why the company has been intensely focusing on expanding the business. In order to expand their business the first and the most significant opportunity that came across was to enter into the Chinese market. Although there were many initial challenges for the company to operate in China, but it also offers some potential opportunities. Tree planting is a new experiment in China and the country offer potential in timber and poplar tree market.
The company’s decision to enter into the market was based on the lucrative market potential of the Chinese market. The company viewed that the market is new and there is less competition, which is almost none in the market that will allow the company to take advantage in the form of a first mover. Secondly, the company can build strong relationships with the government and take on long term relationships and gain further advantages.
On the other hand, the company’s decision regarding the entry selection is also quite critical and has some major advantages. The company decided to make Greenfield investment that will allow the company to start everything from a scratch in this new market. The benefits that the company can gain from this entry mode are the complete control over operations.
Besides that the company can manage the facility and the investments without being dependent on anyone. The decision making and profit margins will involve no complexity. However, the company will face challenges in establishing itself in this new market as the market is totally different from the US.
Therefore the company will have trouble understanding the local demand and prospective and will face hard times in countering the challenges that are present in this market. Furthermore, the risk of failure is there and in such case the loss incurred will be huge.
Answer 2:
The company’s decision to spend some time in the country was impressive in many aspects. The company decided to spend around five years before making a decision of investing in some of the projects is to some a cautious approach, but in a business where the return on investment occurs in long decades, a cautious approach is appropriate. The times that the company spent in assessing the market potential is enough and it made the right decision at the right time.
The decision is accurate and so is the timing because the company had enough time assessing different opportunities, and constraints and obstacles. The market was new and the differences in the culture, economic, political and social condition was huge. Therefore the company’s decision to spend five years before proceeding to an investment is well justified. The company has identified some important criteria before investing in the Luxi and Dongji projects which are essential and enough.
Therefore the company had taken reasonable time in assessing these criteria and any extra time span would have been a waste of time. On the other hand, the cop0amny could have lost the potential opportunities. All the essential factors like the total area, the current standing volume, the estimated expenses, and the investments required are identified and assessed which is why the company has made the decision at the right time.Green Wood Resources A Global Sustainable Venture in Making Case Solution
Answer 3:
Based on the opinions based of the three managers about the two projects, scores are assigned to the two projects by the managers on the bases economic value, social value, and environmental stewardship. In order to decide on the decision and to recommend Jeff and senior management about the right project, a brief analysis of the managers rating must be conducted. From the exhibit 9 it is quite clear that the Luxi project offers great potential in terms of economic value as every manager has rated this project as a very high potential project in terms of economic value. Secondly, in terms of social value every manager has rated this project as a highly potential project as well. However, in terms of environmental stewardship this project offers less value as the ecological system of Luxi has shown drastic improvement in the recent years.
However, the Donji project offers very high potential for environmental stewardship as suggested by all the three managers, but in terms of economic value and social value the potential offered by this project is average. Therefore, keeping all the political and social constraints in the mind, it is suggested to Jeff that investment in the Luxi project will be essential and fruitful for the company. The company has made a Greenfield investment which is why focusing on creating economic and social value will be more valuable for the company. On the other hand, the company has although the low potential for environmental stewardship in Luxi but has a minimal chance to create that as well. Therefore, after complete analysis of the decision the company must pursue investing in the Luxi project. ...............
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