GreenWood essay

To execute its visions, Greenwood tried to create the shared value among society, economy and environment, the three elements of the triple bottom line, and anchor its corporate social responsibility into firm’s Strategy (Porter and Kramer, 2006). The company had many valuable resources and capabilities in its value chain such as the elite plant materials, sophisticated sculpturally approach and seasoned management team which could be the competitive advantages of GreenWood (See Appendix 1).

To better take advantage of and integrate them, firm established a sustainable business del involving five strategic business groups which were Capital and Investment Management, Tree Improvement and Nurseries, Resource Management and Tree Farm Operations, Product Sales and Trading and Ecosystem Services. Afterwards, Greenwood could operate farms in accordance with Forest Stewardship Council (BBS) certification to keep economic viability, maintain the relationship with local workers and communities and create environmental benefits simultaneously. To achieve the triple bottom line, GreenWood could reinforce its own visions and strategies.

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GreenWood believed that to establish a successful tree plantation venture added to achieve the sustainability of people, planet and profits. Thus the more superior project would be recommended after analyzing the triple bottom line using PEST and SOOT analysis (See Appendix 2). From the economic perspective, its advantages are mainly measured by AIR, NAP 1 and initial cash outlay. In terms of AIR, both projects could achieve approximately 15 percent in the ideal situation. The profits of Luis and Donning projects were and 31 2,081 ,RHOMB respectively (see Appendix 3).

Although the profits of two projects were similar, Luis project could only use 7-year to achieve the return compared to 10-year of Donning reject. Therefore, the NAP of Luis may be higher than that of Donning project. Although Luis project had larger initial cash outlay, it might have a higher potential long-term economic value. There was a substantial annual local timber demand in Luis and its neighboring county (2. 2 million mm) that was greater than the annual supply, and local buyers were difficult to import timber from other countries because of the high tariffs and transportation costs.

Furthermore, Lindy would be another market (approximately 3 million mm annual demand) because many local mills closed due to the impact of lobar financial crisis. Nevertheless, Donning had limited demand (2. 0 million mm) that mainly consumed by the local market even Donning experienced severe timber shortage. There were also the potential competition of the flood of Russian timber and the relatively inaccessible export market due to the inland locations. Therefore, owing to the relatively high NAP and potential long-term economic value, Luis project would be superior.

Since the objectives Of triple bottom line should not be viewed separately, Greenwood also had to recognize the interdependent relationships among hose three aspects when considering the social and environmental sides besides the financial returns. To examine the mutual effect between these TV projects and society, Greenwood could analyze the inside-out linkages and outside-in linkages (Porter and Kramer, 2006). In terms of the inside-out linkages, GreenWood could help local farmers in Luis improve forestry management and facilitate local economic development by contributing capital and tree plantation know-how.

Moreover, it would provide local residents employment opportunities through setting up a small wood processing mill that operated gig value-added activities to increase economic benefits. Therefore, the 2 social issues in Luis were related to the GreenWood’s sense of value impact and Greenwood could mutually reinforce its long-term competitive advantages and positive social impact to create shared value. In contrast, Donning aimed at solving continued desertification and severe timber shortage.

Therefore, the project would supplement local timber supply to create economic value, benefit the development of animal husbandry and industry in Donning and improve people’s livelihood by GreenWood’s elite plant trials, leading poplar habitation technology and intensive sculpturally management approach. From the perspective of outside-in linkages, the political risks of Luis project might be higher than that of Donning project. Because sizable volume of poplar tree farms were owned by various local government agencies in Luis, the support of county government was vital for Greenwood.

Due to the slow pace of negotiation and disagreement on land lease price, wood processing mill establishment and an offer to local communities and farmers, Luis project had County government’s complaint and might lose its support. Lack of the government support and coordination, GreenWood was possibly involved in some risks due to Chinese weak contract such as unhappy fame’s’ protest when they perceived that market-based assessment and pricing were unfair to them after economic downturn.

Besides, to find an appropriate partner and to overcome the cultural differences were also challenges waiting for solving. On the contrary, the political risks of Donning seemed to be lower because private firms played an essential role in developing poplar tree cultivation. To negotiate the land purchase with private firms which Were approved by overspent to run poplar tree farms could mitigate the direct conflicts with government. Because of the involvement of private firms, GreenWood obtained a potential partner to address the challenge of partner seeking, Donning Eliding Forestry Development Co. Ltd that had many advantages to assist Donning project. Because the planting technique and accompanying machinery were used by a project that led by the United Nations Food 3 and Agriculture Organization (FAA), Eliding might accept Western procedure more easily to reduce the risks in business cultural differences. Although Greenwood could achieve synergy with Eliding leveraging their advantages, a reputation risk that Eliding had been involved in illegal fund raising and pyramid scheme cannot be neglected.

Due to the relatively weak intellectual property protection in China, GreenWood should prevent its own competitive advantages such as the leading plant materials from being stolen by Eliding that might be unreliable. Additionally, Eliding complained about the undervalued tree plantation assets and lengthy negotiation process, GreenWood also took the risk that Eliding would give up this transaction. Consequently, in terms of potential long-term social value and the possibility to clear away some negative aspects, these two projects seemed similar. In addition, economy is embedded in the environment.

When firms pursue the profitability and social benefits, they need simultaneously concern the natural capitalism that reintegrate ecological With economic and social goals (Porter, Kramer 2007). Luis County was located in Sandhog, east China, with available natural resources and highly favorable conditions that were appropriate for poplar tree farming. The poplar plantation by GreenWood might assist Luis to build a rooster park integrating landscaping, tree plantation and tourism that could create economic benefits and environmental protection.

Furthermore, GreenWood could also use a closed-loop manufacturing system to recycle wastes produced from wood processing into biomass energy to solve the social problem of severe energy shortage in Sandhog and also generate economic revenue (Loving, Loving, and Hawked, 2007). Nevertheless, the manager indicated that the ecological system in Luis had been improved significantly that GreenWood could not create great value of environmental stewardship. Comparatively, Donning was in the Inner Mongolia Autonomous Region, Northeast China.

It was subject to a serious timber shortage and continued desertification. 4 Because of the suitable soil texture and favorable river systems, Donning could be a right place to cultivate poplar. Nevertheless, semi-arid, windy weather and the lower annual tree growth rate (0. 7 mm per mum per year) compared to that of Luis (1. 2-1. 8 mm per mum per year) would be challenges. Therefore, if GreenWood intended to improve the situation, the investment activity was riskier and the payback time might be longer than Luis project.

Nonetheless, Loving, Loving, and Hawked (2007) point out that the business model has SSH fifed from sales of goods to delivering a flow of solutions in current years. Greenwood would not only sell timbers in the local market to seek profits, but also help Doing afforest through integrating deployment of elite plant materials and tailored intensive management practices to nurture the hybrid poplar. In addition, the challenge of the low annual tree growth rate would also be conducive to the progress and even breakthrough of research and development (R). Therefore,

Doing project would give Greenwood an opportunity to capture the long- term environmental stewardship that more conformed to GreenWood’s vision. In regard to environment aspect, Donning project was more acceptable because of the higher potential value creation of environmental stewardship. To sum up, though social and environmental sustainability cannot be achieved without profitability, GreenWood focused more on sustainability rather than financial returns.

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