Greenwood Resources Inc.

A brief overview of the case:

Slide 2:

        Greenwood Resources Inc., was established in 1998. Developer of Greenwood, Jeff Nuss, started this business after 12 years of being a bioresources engineer with CH2M Hill. Greenwood Resources, Inc. specializes, “…in the development and management of high-yield, fast-growing tree plantations” (Dess, McNamara, Eisner, & Lee, 2018). These high-yield and fast-growing tree species that were/are growing on plantation farms were poplar and eucalyptus trees. The eucalyptus tree can be found in tropical and subtropical regions whereas the poplar was mainly found in temperate regions. Tree plantations are increasingly important because,

“…tree plantations was attributed to the fact that “less than half of the world’s original forests remain, and ongoing deforestation, is potentially devastating to the environment. Yet population growth and the increasing standard of living in many countries continue to drive the demand for timber products” (Dess, McNamara, Eisner, & Lee, 2018).

Slide 3:

Greenwood resources is a forestry asset management company which deals in bio-diversification and plantation of trees in forest lands. It manages the forestry asset portfolio for institutional investors, funds, family businesses and HNIs. The company also focuses on growing wood for manufacture of energy and other end uses. Jeff started this business because of his education and extensive years of work experience. Jeff’s experience led him to work with poplar tree farms, which lead to investments within tree plantations, which seemingly holds a great promise for the future. Plantation forests have had an increasing role within the timber production. By 2005, shares of global timber production from plantations was approaching 50%. The largest plantation areas are located in Asia (China, India, and Japan), Europe (Russia, Scandinavia, and Eastern Europe) and the United States. Jeff’s plan was to aid in institutional investors along with wealthy individuals to invest in a professionally managed high-yield, short-rotation tree farms.  Jeff wanted to make sure that he was in accordance as well as operating Greenwood Resources with Forest Stewardship Council (FSC) certification.

Applying concepts from Chapter 7 analyze their international strategy (reason for international expansion, entry mode, international strategy, etc.)

Slide 4:

        From chapter 7 it can be learned that firms create value and achieve competitive advantage in the global marketplace. Companies and their managers tend to face several opportunities and risks if they decide to diversify abroad. The text stated, “in a variety of industries…it is almost impossible to survive unless firms scan the world for competitors, customers, human resources, suppliers and technology” (Dess, McNamara, Eisner, & Lee, 2018). The importance of international expansion is a viable diversification strategy. The international expansion strategy of Greenwood focuses on the increased demand for forest assets and wood all over the world. While the company also focuses on better management of forest reserves all over the world, it also simultaneously offers investment opportunities to many. With the vast experience that the company has in the area of plantation and forestry, it offers a globally diversified portfolio to its investors.

Slide 5 - Entry Mode:

Entry strategy for Greenwood allows the company a sustainable growth in various timberland around the world where the environment is good enough to achieve that growth. GWR’s entry mode was through exporting and acquisitions. Exporting consists of products sold from one country to another (Dess et al, 2016). GWR was not only selling trees as a tangible product but was also selling their knowledge in trees as an intangible product. Additionally, GWR also did their expansion through acquisitions. GWR did not merge with an international market but their opportunity to acquire Potlatch tree plantations would make their company more appealing to other markets.

Slide 6 – International Strategy:

Due to the study of global markets, the company can focus on plantation and growth in developed or developing countries depending on the demand for forest commodities. Greenwood, with its international expansion strategy, can reach out to more investors all over the world. It will give them an option to diversify investments and reduce their portfolio risks. Also investing in a natural resource such as wood, which has an ever-increasing demand all over the world, provides a good hedge against losses and gives them satisfaction of participation in conservation of natural resources. GWR knew they could advance their products to appeal to international markets. China had a high yield potential for poplar tree farming. The excessive logging and deforestation made the tree industry appealing to countries that were struggling with the demand in trees.