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Greenwood Resources A Global Sustainable Venture

Greenwood Resources decided to expand into China in 2005 due to limited growth opportunities in the US. China was an attractive market due to its fast growing poplar tree farming industry. Greenwood entered China through two methods: strategic alliances with local companies and wholly owned subsidiaries. While alliances provided local expertise, managing a new group posed integration challenges. Wholly owned subsidiaries gave full control but foreign corporations faced high taxes. After five years of research, Greenwood likely made the right decision to thoroughly investigate China's market before investing. A proposed project in Luxi and Dongji was desirable due to expected higher returns than US investments and environmental and social benefits to local communities.

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313 views2 pages

Greenwood Resources A Global Sustainable Venture

Greenwood Resources decided to expand into China in 2005 due to limited growth opportunities in the US. China was an attractive market due to its fast growing poplar tree farming industry. Greenwood entered China through two methods: strategic alliances with local companies and wholly owned subsidiaries. While alliances provided local expertise, managing a new group posed integration challenges. Wholly owned subsidiaries gave full control but foreign corporations faced high taxes. After five years of research, Greenwood likely made the right decision to thoroughly investigate China's market before investing. A proposed project in Luxi and Dongji was desirable due to expected higher returns than US investments and environmental and social benefits to local communities.

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Running head: GREENWOOD RESOURCES: A GLOBAL SUSTAINABLE VENTURE 1

Greenwood Resources: A Global Sustainable Venture

Student’s Name

Institutional Affiliation
GREENWOOD RESOURCES: A GLOBAL SUSTAINABLE VENTURE 2

Greenwood Resources: A Global Sustainable Venture

GreenWood’s decided to enter China in 2005 because of the limited scale of opportunity

in the US. As such, there was a need to seek for opportunities in the other parts of the world.

China became the most preferred as it had potential in a fast-growing, high-yield plantations and

a highly promising poplar tree farming, which was crucial for the growth of GreenWood.

The entry of GreenWood in China took place in two parts. The first method was through

strategic alliance where the company collaborated with local tree growing companies. This entry

method can be considered advantageous as it involved experienced individuals in China and

GreenWood. However, the disadvantage is the issue of sharing management with a new group

that is likely to create challenges of integration and management styles. The second entry mode

is a wholly owned subsidiary, which is advantageous in the sense that GreenWood was expected

to be in full control of the company's management. However, the disadvantage can be on the

adverse business environment such as high taxation of foreign corporations.

Taking more than five years investigating the viability of entering China may appear to

be costly, as more time and resources had to be used throughout the period. However, business

with long-term strategy is expected to take time researching before rushing into investing in a

different market. It is highly likely that the company managed to make the right decision after

the thorough investigation and it will be of great benefit in the long-term.

The Luxi and Dongji project is desirable from an economic perspective as it was

expected to accrue higher average return higher than that of the investment in the US.

Additionally, the project is anticipated to enhance the required ecological environment in China.

The Luxi and Dongji project promotes social and economic development in the individual local

community. Consequently, Jeff and his management should consider pursuing the project.

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