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Genertal Environment For Weyerhaeuser Essay

1128 words - 5 pages

The General Environment surrounding the timber industry and Weyerhaeuser is highly reliant upon six different segments. These segments are: demographics, economics, political/legal, sociocultural, technological and global. The environment within which a company operates is directly influenced by what is going on in each segment. Weyerhaeuser must constantly analyze the surrounding environment through scanning, monitoring, forecasting and assessing, to determine the environments changes and its subsequent effect on the company.
Over the past decades the timber industry has had minimal demographic diversification. However, within the last decade they have recognized a demographic change ...view middle of the document...

One of these indicators has shown a slumping real estate markets worldwide and has greatly impacted all wood production. Many economists predict a rebound in home sales by the end of 2009 and into 2010. Economists also predict that the younger generations who are becoming more economically conscious and those headed towards retirement, will be more interested in building smaller homes which will lessen the demand for wood production.
Many companies within the timber industry are pulling out of the U.S into different countries where wood is abundant and expanses are smaller, this leaves the private forests owners in the U.S. to forgo on paying their property taxes, due to lack of income, which further effects the economy. Many states have different legislation in place to relive tax burdens on private forest owners, but without future contracts with timber companies, many of these owners are selling their lands to developers. Weyerhaeuser’s share of revenues in 2007 was 81.5% from the U.S. market. This over dependence on the U.S. has made is very vulnerable to economic fluctuations, such as the decline in home production.
Weyerhaeuser along with other companies must also comply with numerous environmental laws and regulations, to reduce air emissions and pollutants from facilities and control pollutants that contribute to smog and haze. These regulations have made it difficult for the timber companies to be profitable and continue to push their expansions globally. This is part of the political and legal segment of the timber industry. The timber industry is plagued with constantly changing regulations, antitrust laws, union negotiations, and trade barriers. Companies such as Weyerhaeuser are constantly running into national forest management policies. These policies are meant to protect biological diversity and the old growth forests and force timber companies to cut down small trees which make low value products. Acquisitions and mergers within the timber industry, often turn into antitrust suits. Within the last decade legal actions have been filed against Weyerhaeuser several times for monopolizing the alder market in the Pacific Northwest .
The sociocultural segment of the timber industry is mainly centered on environmental concerns. Environmental issues and global warming has been a hot subject over the past years, and the timber industry is right in the middle of it. Many timber companies have focused their goals and efforts on practicing sustainable forestry, reducing pollutions and conserving resources. Within this segment timber companies experience strong oppositions from conservative groups, which oppose clear cutting...

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