ObjectiveThe National Bank of Canada (“NBC” or “the Bank”) is responsible for making the decision to consider the application of Dawson Lumber Company Limited (“Dawson”) for an increase of his line of credit. up to an amount of $10.8 mm. Dawson intends to finance its inventory and receivables with the line of credit. NBC must remain aware of the competitive landscape of the lumber industry and evaluate whether its focus on the retail segment is beneficial to Dawson's strategic plan. Given that Dawson is one of the region's largest borrowers, NBC must be careful in how it manages this relationship. The Bank cannot afford to refuse the activities of the BNC. However, extending additional credit to Dawson could increase Dawson's default risk and jeopardize NBC's ability to recoup the $4.2 million term loan it is already owed. Industry Analysis Analysis of the Canadian Lumber Industry The Canadian lumber industry can be considered, at best, very unattractive. The expected oversupply of Canadian lumber, increased competition in the industry and increased purchasing power have put downward pressure on prices, negatively affecting producer profitability. With the increase in the number of small and medium-sized lumber producers, competing to sell a commodified product. product, the industry has become very fragmented. The combination of these factors and the slow growth of the industry in recent years has led to a high degree of rivalry among producers, resulting in lower lumber prices. With lumber producers forced to compete on price, buyers reaped the benefits. The high level of information of buyers and their low switching cost added to their high bargaining power compared to producers. Restrictive government measures, combined with high buyer power and a high degree of financial obligations, will improve Dawson's cash position and provide it with the flexibility to take advantage of market opportunities and plan for unforeseen circumstances, thereby reducing its risk. Additionally, given that conditions are more lenient than the industry average, this will allow Dawson to maintain its existing customer relationships by offering more favorable credit terms and higher inventory levels than its competitors. At the same time, Dawson should look for opportunities to sell the retail component of its business. NBC's investment bank could collaborate on this goal. The proceeds resulting from this transaction as well as the improvement in its cash flow could be intended to repay the term loan that Dawson has with BNC, to issue dividends and/or to contribute to the improvements, suggested above, to operations and Dawson organizational structure..