Holson Forest Products Ltd.: The Challenges of International Markets

Description

Holson Forest Products Ltd.: The Challenges of International Markets: Abstract

Holson Forest Products Ltd.: The Challenges of International Markets is a case study by Jacqueline Walsh, Blair Winsor and Jose Lam.

This case is set in June 2016. Ted Lewis is the owner of Holson Forest Products Ltd. (Holson), one of the largest suppliers of lumber on the Northern Peninsula. In 2008, due to increased shipping costs, Holson’s largest customer, Corner Brook Pulp and Paper Ltd. (CBPPL), decided to stop buying logs from the Northern Peninsula. Following CBPPL’s decision, Lewis was forced to diversify his business.

In 2011, after a feasibility study confirmed the potential of opening a wood pellet plant to produce finished products for local, national, and/or international markets, a pellet plant was completed in a remote area of the Northern Peninsula. Unfortunately, the lack of nearby port facilities to ship the product to international markets prevented the company from launching full production. In addition, because forested lands on the Northern Peninsula were not certified as sustainable forests, Holson’s premium products could not be sold to residential markets in Europe. Lewis was faced with many challenges in an uncertain global market.

Lewis needed a strategy that would allow him to confidently launch production of wood pellets. His strategic analysis had to take into account both external markets and internal issues related to resources, operations, marketing, human resources, and the management challenges of sustaining a business in rural Newfoundland. It also had to consider Lewis’s values and commitment to the people of the Northern Peninsula.

Teaching objectives

Learning objectives include the following:

• Challenging students to consider strategic direction in an uncertain, complex, global environment
• Developing students’ ability to conduct an environmental or external analysis using a variety of strategic tools
• Developing students’ ability to conduct a resource or internal analysis using a variety of strategic tools
• Fostering students’ ability to make a strategic choice with the available information

Main themes covered

• Entrepreneurship
• Owner-operated sawmill
• Wood pellet venture
• Role of external forces on SMEs
• Internationalization strategies

Concepts and theories related to the case

• Internationalization strategies
• Challenges of SMEs, in particular in rural areas
• Use of PESTEL framework to analyze a company’s external environment

Additional information

Teaching notes are available for teachers only. Contact the HEC Montréal Case Centre for more information.