Guiajilote Cooperativo Forestal; Honduras
Monique Cal Gonzalez
University of West Indies
BADM 435-Business Strategy & Management
Mr. Kevin McLaughlin
January 28, 2015

Guajilote Cooperativo Forestal is located in a small village in Honduras. The cooperative is owned and operated by the members who use its facilities and services. Founded in 1991 with 15 members, it was part of a project that would establish La Muralla National Park as the administrative and socioeconomic model of Honduras’ other national parks.
Internal Strategic Factors
Strengths Issue 1: Employee satisfaction Evidence: Since founding in 1991, three of Guajilote’s original members have quit, and four have joined.
Impact: The members report that the Forestal has had a positive impact on their lives. One member indicates that he earns more money in a month than he used to in six months before joining, and discusses the opportunities that the Forestal has allowed him to consider, such as sending his children to school. The benefits that each member receives seems to bring the members personally closer, building a strong sense of team.
Issue 2: Low costs Evidence: In 1997, expenses included a mile and maintenance of the Forestal’s cross-cut saws. The 16 members of the Cooperativo are paid about $113 per month, and the Cooperativo reported revenues in 1997 of $22,153. Impact: Revenues are high because the company does not spend a lot of money on expenses.
Issue 3: Price negotiation
Evidence: Munguia’s rise to the position of leader occurred in 1995 due to his ability to successfully negotiate a higher sales price for Guajilote’s mahogany, from $0.37 to $0.62.
Impact: Many members believe that the successful negotiation of price is what helped the company to survive.
Issue 4: Little competition
Evidence: Guajilote is the first and only company of this type in Honduras.
Impact: With little to no competition for mahogany in the area, the Forestal can conceivably charge more for the wood, but is forced to take a lower price because three is only one distributor in the area. By distributing its own wood, it could charge more money as the only company with rights to the mahogany.
Issue 5: Defined process
Evidence: Most of the members of Guajilote Cooperativo Forestal have worked for the Forestal since its conception. They are very familiar with the process of finding, cutting, and moving a tree, and they probably know how to do is as quickly and efficiently as possible.
Impact: The members are not only experienced in the field, but there is little cost to recruit and train new members.
Weaknesses
Issue 1: Organizational structure
Evidence: The organizational structure shows Munguia and his nephew at the top with everyone else equally below.
Impact: While many members of the Forestal support Munguia’s position, the rumors that he earns more money are rampant. The organization is bottom-heavy and there are no transitional positions between workers and upper management.
Issue 2: Limited growth potential Evidence: Growth is dependent on such external factors as the amount of rain. The company cannot control these occurrences, and is hampered on its growth. Such internal factors as the ability of the company to easily process a tree are easily controlled, but the company must put plans in place to do so. Impact: The company is unable to grow and realize more revenue if it is hindered by these factors.
Issue 3: Business knowledge
Evidence: Most of the members of Guajilote have only a primary school education, including the leader of the organization. Impact: The growth and success of the organization is hampered by the inability to understand business and marketing and to compete with other organizations at this level.
Issue 4: Transportation Evidence: Transportation of chopped wood is by mule or river. On the treacherous terrain, it could take days for the mule to transport wood to the appropriate place.
Impact: Operations are slowed because of these problems with transportation.
Issue 5: Technology
Evidence: Many restrictions are placed on the company that impedes the company’s ability to do business, such as restrictions to performing work in certain areas of the park and on a certain type of tree. Impact: The restrictions that are placed on the company’s operations slows the progress of growth within the organization.
External Analysis: Opportunities and Threats The Cooperativo has the ability to control its strengths and weaknesses, but many external factors are not so easily avoided. Opportunities present a way for the company to take advantage of its strengths. External Strategic Factors Opportunities Issue 1: Distribution Evidence: Currently, the Cooperativo sells mahogany at a low price because it is unable to handle distribution. Impact: This operation is the Forestal’s only source of revenue and the elimination of the distributor would increase revenue. Issue 2: Expansion Evidence: Guajilote is the only venture of this type in Honduras. The company has the ability to expand its operations to other parks. Impact: This would allow the company to experience growth and to increase revenue. Issue 3: Strategic alliance Evidence: The Forestal could contract with furniture makers and be an exclusive supplier of mahogany. Impact: Selling wood directly to furniture makers would allow the company to charge more for its wood and realize more revenue. Issue 4: Production Evidence: An American exporter reviewed Guajilote’s situation and found that the company would be very successful at making and marketing its own furniture. Impact: This would allow the company to increase revenue by three times, according to the exporter. Issue 5: Process other types of trees Evidence: As part of the USAID project, the Forestal was only given the rights to source wood from mahogany trees. Impact: While the Forestal makes a profit on mahogany partly due to its high value, there are other types of trees in the national park that have fallen and need to be removed. Earning the rights to process other types of trees could increase revenue for the Forestal. Issue 6: Increase efficiency Evidence: The Forestal is currently efficient at the tasks it performs, but could increase efficiency by forming teams responsible for different aspects of the process. Impact: The company would become more efficient and process trees faster. While opportunity presents itself to the Forestal in many ways, there are some factors that threaten the growth and success of the company. Threats Issue 1: Deforestation Evidence: There are many causes of deforestation including illegal logging and forest fires. Often, small fires are set to clear an area for cultivation or to prepare the soil. When the fires are not properly contained, adult mahogany trees and mahogany seeds are killed, quickly eliminating mahogany in the area. Impact: The Forestal only has the rights to remove fallen mahogany trees, so a decrease in this resource affects the Forestal’s supply. Issue 2: New settlements in mahogany-rich areas Evidence: Hondurans consider the areas around the park to be open to settlement and many of them migrate to La Muralla to escape poverty. There, they clear the forest for cultivation and use the wood to build homes and for fuel. Impact: Many of these settlements arise in mahogany-rich areas, removing this resource from the Cooperativo’s supply. Issue 3: Mahogany endangerment Evidence: The International Convention on Trade in Endangered Species (CITIES) protects mahogany. As the wood becomes more rare, restrictions on its cultivation are expected to increase. Impact: Restricting the use of mahogany would decrease the number of trees that the Cooperativo can process. Issue 4: Natural mahogany decline Evidence: Mahogany is naturally becoming extinct. Impact: The decline of mahogany will slow and eventually halt the Forestal’s business practices. Issue 5: Restrictions
Impact: Restricting the use of mahogany would decrease the number of trees that the Cooperativo can process.
Issue 4: Natural mahogany decline Evidence: Mahogany is naturally becoming extinct. Impact: The decline of mahogany will slow and eventually halt the Forestal’s business practices.
Issue 5: Restrictions
Evidence: If restrictions are placed on mahogany, the Guajilote will go out of business. Impact: The restrictions that are placed on the company’s operations slow the progress of growth within the organization.
To experience continued success, Guajilote Cooperativo Forestal must examine its opportunities and threats and use it strengths and weaknesses to exploit or overcome them. To do this, Guajilote must first define its purpose.