Windhorse Farms

Terry Houston MBA 522-1b2 Professor Watson November 27, 2012 Executive Summary The contents of this case analysis include an overall purpose to provide you, Professor Watson, with an understanding of the business problem that Jim Drescher, owner of Windhorse Farm, must make in a matter of a few days. Without rehashing much of the information that was explained within the case, the bottom line is that Mr. Drescher and his wife must identify how they intend to continue making money owning the farm without them supervising the business anymore.

The reason being, that they are reaching a point in their lives that require retirement and realization that they will not be around forever. Problem Statement Above much, the farm is faced with a few main decisions as to how to attack this problem. Among these involve him deciding which product lines he needs to grow, maintain, and/or harvest. This case analysis will identify what alternatives that Mr. Drescher should consider in going forward, considering the “four filters” (economic, environmental, social, and spiritual impacts) in conjunction with my recommendation on what I feel he should decide to do.

Analysis of Situation Acadian Forest Region The case highlights the importance of the Acadian forest region. Throughout the life of Mr. Drescher’s ownership of the farm, over 95 per cent of the harvesting in the region resulted from cutting trees down, making it 1 of the 6 endangered forests in North America. This comes at an ethical and environmental cost for the farm. Because of the situation, the Dreschers have decided to implement sustainability practices within the region. Among these practices include educating the public about the situation and farm goals through Windhorse Farm School and having “Open Farm Days”.

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They also implemented organic gardening and alternative energy generation. Because of these newly adopted practices, market interest for continuity of such actions have increased and continuing to do so. Wood Products Manufacturing Eco-Woodshop is the main source of income for Windhorse Farm, due to the differentiation and advantage of competition that the farm has. The Dreschers have low overhead costs because they own the farm lands, making it more than possible to make a solid income. Tonewoods Guitar instruments makes up the large majority of wooden instruments made.

Of those guitars, those made from red spruce tonewood proved to be the money makers. Yet still, producing these instruments added the economic and social costs of cutting more and more trees down. In addition, it would take the farm to sell about 200 tops annually just to break even, while in their best year, they’ve sold only 25. Having even the opportunity to be successful in this market requires Mr. Drescher to hire a subject matter expert/organization that had beliefs consistent with the culture of the rest of the farm as well as alternative tonewood that would sell, costing even more money. Evaluation of Alternatives

Within the case, Mr. Drescher understands that the bulk of what his decision comes down to is of two categories. With regards to tonewood, he had to decide if it’d be better to grow the business or exit the market entirely. Growing the business required careful planning for the future. He also needed to identify the marketing of construction/architectural products. Doing so would require him to either grow the business, leveraging green products, or sell, thus making the business fulfill more of a raw material supplying role. Decision/Recommendation There’s obviously a lot going on within each option.

However, it is in my humble opinion that Mr. Drescher and Windhorse Farm should continue its current operation with its Eco- Woodshop. For many years now, the operation has proven to be profitable, allowing the business to stay afloat. Along with the successful application of the various sustainability practices I’ve previously mentioned, there proves to be a bright future for the farm. Accordingly, making the public aware of important environmental factors of sustaining a forest region and providing green alternative avenues to do so will only improve the external and internal morality of the farm, in consideration of the “four filters. Simply “testing the waters” for guitar production will not prove to be enough in considering tonewood. In comparison to the Eco-woodshop operation, tonewood business success is far riskier. Even in considering another organization that can take the helm for Mr. Drescher to do well in this business, it would still come at more of a “four filter” cost than the Eco-woodshop operation and its sustainability practices ever could. Simply put, the majority of the culture for the farm would need to change completely, which is something I believe Mr. and Mrs. Drescher are not willing to do.

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