HE MAJOR STRATEGIC CHALLENGE FACING OOTEEL LTD. is that continuation of its current business model will not guarantee future profi tability be-

cause of a radically different business environment with the emergence of concerns over sustainability among the general public and its customers. A four-pronged innovative strategy has been proposed by consultants that has the potential for both sustainability and long-term profi tability. If successful execution can be realized, this would represent the operationalization of Michael Porter’s seminal hypothesis [see chapter 1] that sustainability is the key to long-run competitive advantage. Figure 22-1 displays the goals and inherent challenges facing the company, and Figure 22-2 presents the detailed business case defi ned by the strategic initiatives, tactical targets, and specifi c constraints, risks and challenges. It is apparent that this strategy is not without risks, and a fundamental issue is whether the company can achieve profi tability through the success of any one or subset of the four initiatives,

Sustainably develop

the land holdings

The goal and challenge: cut back on

harvesting of first growth forest

capitalize and preserve

other natural assets

The competitive cost challenge

selective cutting

(vs. clearcuts)

lower total cut volume, which

decreases economies of


F I G U R E 2 2 . 1

F I G U R E 2 2 . 2

or whether the achievement of all four is necessary for success. This challenge is portrayed using a model from electrical engineering in Figures 22-3a and 22-3b . Model A uses an “OR Gate” where satisfying any one of the independent conditions will suffi ce for success; while Model B uses an ‘AND Gate” where all of the independent conditions are necessary for success. The following sections discuss in greater detail the opportunities and risks associated with each of the four strategic thrusts.