ABSTRACT
Ooteel is a forestry company with private land holdings situated on the Pacific Northwest coast of North America. It has been operating a logging operation for several years whose profitability is intimately tied to variations in the market price of its timber. The company is now facing a major challenge. Continuation of its current business model will not guarantee future profitability principally because of the emergence of concerns over environmental sustainability among the general public and its customers in particular. This challenge is manifested in two areas: first, the company’s plans to harvest old growth trees has received a major push-back from environmental non-governmental organizations (ENGOs) and the threat of a boycott of its products if this plan proceeds. Second, a lack of forest certification of its current logging operations may threaten access to markets for some of its products. Ooteel has sought the advice of consultants who have generated an innovative, but potentially risky, strategy that may help the company survive. It is now up to Ooteel to assess this new strategic option and determine its economic viability. The new strategic plan is described below with relevant economic data.
