Guajilote Cooperative Case Analysis

Guajilote Case Analysis

1. Some of the strengths that Guajilote Cooperativo holds are that they have an exploitation advantage: they are the only venture in Honduras who have granted permission from the government to exploit naturally fallen mahogany trees. Also, the members of the company show high levels of satisfaction and loyalty. Only three members have quit ever since the cooperative was found in 1991. On average, the members were highly satisfied with the salaries they were receiving (from 2000 lempiras a year prior to working at Guajilote to 1000-1500 lempiras in just a month of being a member). The enhancement of the member’s quality of life also strengthened the personal bonds with each other and the company. Another strength is that there is no competition: Guajilote is the only company who is in the market for mahogany trees, so competition is basically nonexistent. The weaknesses of Guajilote include their lack of technological uses: The cooperative utilized equipment such as a hand saw-mill to disassemble the trees. This process was difficult and would take weeks of effort, depending on the tree’s size. They also used mules to carry the trees, or let it flow down a river. They also had uneducated members among the cooperative: All 16 members of Guajilote only had a primary school-level education, many of them were illiterate and barely knowledgeable of any business practices. Their lack of distributors was another keen weakness: There was only one sole distributor (Juan Suazo) who bought and sold their mahogany wood. A huge part of this was because of their remote location of where their operations took place.

2. Some opportunities that Guajilote have are increasing the price of their mahogany wood: the only, legally-authorized company to sell fallen mahogany trees and there are limited amounts of mahogany, they could increase their sale prices in order to bring up their profits. Another opportunity could be partnering up with highly-skilled furniture makers: Signing a contract with those makers could be another possibility of bringing in