Environmental Analysis – SWOT
Strengths
Weaknesses
Dedicated members/loyal workforce
Powerful leader/strong leadership
Strong relationship with gov’t/exclusive rights to harvest
Higher wages
Sustainable practices
High morale among employees
Knowledge of the local environment
Cheap labour
Centralized leadership, high power distance between leader and employees
Tension/distrust among membership and leadership
Lack of technology in harvesting procedures
Lack of formal reporting and processes (ie. Financial reporting)
Profitability/Investment power
Heavy reliance on distributor and Government licensing
Lack of education/training of members/no succession plan
Access to financing
Opportunities
Threats
Add value/vertical integration to eliminate need for distributor
Green movement as marketing initiative
Incorporate technology to increase efficiencies
Increasing mahogany prices
Government relations may provide security and provide opportunity for better bargaining position
Internal advancement and training for members to improve opportunities in the future
Climate/slash and burn/illegal deforestation
Losing the permit to harvest from the Government
Migration into the harvesting area
Lack of resources/aid/support
Mahogany may become endangered/restricted
Corrupt government may make exclusive rights unstable
Environmental Analysis - PEST
Political/Legal
Unstable/corrupt government (threat)
Leader involved in politics, could be influential (opportunity)
Trade bans/tariffs (threat)
Environmental legislation (threat)
Economic
No government funding available for the cooperative (threat)
Lack of access to credit to expand the business or improve processes (threat)
Lack of Infrastructure to harvest and move mahogany (threat)
Decrease in supply – scarcity (threat)
High unemployment, low wages, give Guajilote advantage in gaining access to labour pool because everyone wants to work there; however poor economy makes business operations difficult especially when coupled with corruption (opportunity and threat)
Socio-cultural/Environmental
Low education rates (opportunity and threat)
People moving into buffer zone (threat)
Green movement, sustainable practices (opportunity)
Mahogany valued in higher standard of living areas – opens up market opportunities to sell the wood (opportunity)
Possible ban or trade tariffs (threat)
Technological
Mechanics and technology becoming cheaper and more accessible, which may allow more access for Guajilote to obtain better equipment for more efficient harvesting and processing of trees (opportunity)
Environmental Analysis – Porter’s Five Forces
Barriers to Entry: High
Government license required, knowledge of the area, difficult in harvesting, relationship with distributor and ability to access international markets.
Power of Buyers: High
The distributor is our buyer. The distributor is the only distributor available and is possibly corrupt. Guajilote does not have the skills and training necessary to cut out the distributor so the reliance of the organization on this person increases his power substantially.
Power of Suppliers: High
The government for providing the license and nature supplies the material albeit at a very slow pace. Power of suppliers is high because the right to harvest and the availability of the resource is highly dependent on these two factors.
Threat of Substitutes: Med (each section came up with something different so I split the difference)
There are plenty of materials that could be substituted to make furniture (plastic, metal, composite, etc), as well as other luxury products that could replace furniture; however, buyer inclination to substitute decreases the likelihood of such products being substituted.
Competitive Rivalry: Med
There are no other legitimate organizations that harvest mahogany and compete with Guajilote; however, Guajilote is still forced to compete with the black market and in many cases, the legitimate wood is mixed with illegally harvested wood which
