In search of sustainable competitive advantage in the wood products industry : Evidence from China and Finland

Given the dramatic changes such as globalization, increasing energy costs, technology development and climate change that are occurring in the global business environment, the wood products industry faces the challenges of rising production costs, rapid technology transfer and increasing corporate environmentalism. Consequently, the traditional sources of competitive advantage based on economies of scale are no longer sufficient in today s highly competitive and dynamic market. Implementing a purely conventional low-cost strategy has thus become a less viable option for companies to sustain their competitiveness. Wood products companies must develop sustainable value-creation strategies in order to generate firm-level value added and create sustainable competitive advantage (SCA). Although understanding the sources of SCA has become an active area of research in the strategic management literature, research in this area that is specific to the wood products sector is in its nascent stages. This study contributes to the evolution of research on competitive advantage in the wood products industry by approaching it from the dynamic capability perspective (DCP) and natural resource-based view (NRBV) of the firm. Both quantitative and qualitative data and research methods were used to facilitate comparative analysis at multiple levels of decision-making. This dissertation examines the sources of SCA and the corresponding changes in competitive strategies in the wood products industry in two contexts: China and Finland. The results indicate a growing trend in transitions from production to market and to stakeholder orientation, from a cost leadership to a differentiation strategy, and from low value-added to high value-added products in both countries. Along with these transitions, the sources of SCA have changed from focusing solely on tangible resources to integrating intangible resources. This study provides useful references for strategic planning and analysis for producers in both emerging and established wood products markets, and also helps enrich our knowledge of using the DCP and NRBV of the firm as foundation theories to conduct strategic business research. As a preliminary step in understanding business dynamics and future development trends of the wood products industry, this dissertation opens up interesting avenues for future research. Both the type of strategic analysis and the research design used in this study could be applied to analyzing the wood products industry in other emerging or established markets.Puutuoteteollisuuden toimintaympäristö on murroksessa markkinoiden globalisoituessa, ilmastonmuutoksen vaikuttaessa markkinoihin ja energia- ja raaka-ainekustannusten noustessa. Lisäksi ympäristökysymyksillä on yhä suurempi painoarvo monilla asiakasmarkkinoilla. Perinteisten kustannusjohtajuuteen, aineellisiin resursseihin ja suurtuotannon etuihin pohjautuva kilpailukyky on heikentynyt ja puutuoteyritysten arvonluontimalli vaatii uudistumista. Vaikka yrityksen kilpailuetujen merkitys on korostunut strategisen johtamisen kirjallisuudessa, puutuoteteollisuuden koskevaa tutkimusta on kuitenkin niukasti. Teoreettisesti tämä väitöstutkimus analysoi kilpailuetujen kehittymistä puutuoteteollisuudessa dynaamisten kyvykkyyksien ja ympäristölähtöisen resurssipohjaisen mallin (ns. natural resource-based view) kautta. Tutkimus soveltaa sekä kvantitatiivisia että kvalitatiivisia tutkimusmenetelmiä useilla eri päätöksentekotasoilla Kiinan ja Suomen puutuoteteollisuuden yrityksien vertailevaan analyysiin. Tulokset osoittavat lisääntyvää painottumista tuotantokeskeisestä strategiasta markkina- ja sidosryhmäkeskeiseen strategiaan sekä siirtymistä kustannusjohtajuudesta erilaistamisstrategiaan ja alhaisen jalostusasteen tuotteista korkeamman jalostusarvon tavoitteluun. Näiden myötä aineettomien resurssien merkitys kilpailuedun lähteenä on siirtynyt kohti aineettomia resursseja. Tuloksia voidaan hyödyntää yritysten strategisessa suunnitteluun ja markkinoiden analyysiin. Tutkimus auttaa ymmärtämään paremmin puutuotemarkkinoiden toiminnan muuttumista ja yritysten strategisia kehityspolkuja. Kehitettyä analyysikehikkoa voidaan jatkotutkimuksissa hyödyntää analysoitaessa puutuoteteollisuutta myös muilla maantieteellisillä alueilla sekä kehittyneillä että kehittyvillä markkinoilla

Analysis of China's primary wood products market : sawnwood and plywood

China's primary wood processing industry and wood consuming sectors have experienced rapid growth in recent years. Industries like sawnwood and plywood have developed very quickly. The purpose of this study is to: 1) provide an overview of the demand, supply, imports and exports of raw wood and primary wood products in the China market between 1993 and 2007, 2) present quantitative estimates of the relative importance of factors influencing the demand, supply and exports of Chinese plywood, 3) draw conclusions about China's potentials and challenges for foreign enterprises, including Finnish companies. The information, analyses and findings presented in this study can give a reference for wood processing companies, especially for sawnwood and plywood firms, and governmental agencies in China. In addition, the study provides a basis for further study and research. Even though much information has been published in China, academic research in the Chinese woodworking market is scarce, and especially, time-series data is missing and unreliable. This study tries to fill this gap. It is based on secondary data collected from various sources, including literatures, journals, magazines, consulting reports, industry analysis, news, and so on. The annual time-series data obtained for variables in models are mainly gathered from original official Chinese sources. The study increases the information and understanding on the Chinese wood products markets by using descriptive and explanatory methods to analyze the data for background information, markets and empirical modeling. By employing econometric models, based on the elasticity estimates, Chinese plywood demand seems to be income elastic but price inelastic, Chinese plywood supply would be highly elastic with raw material price but scale inelastic, and Chinese plywood exports appear to be highly income elastic

Opportunities and Challenges in the Emerging Bioenergy Business: The Case of the Finnish Sawmill Industry

The resources of currently dominant fossil fuels are limited, and their use causes greenhouse gas emissions. Consequently, the public interest within the European Union has changed toward using renewable energy. Finland’s forest industry is one of the world leaders in producing and utilizing wood-based bioenergy. Hence, it is of interest to evaluate new value-creation opportunities and the consequent challenges that face the Finnish sawmill industry. In order to identify the strategic resources that enable developing competitive advantages in the emerging bioenergy field, we applied the natural resource-based view of strategy to the sawmill industry. In the empirical part, qualitative semi-structured interviews with managers of 23 sawmills based on the Delphi methodology were conducted in two phases. We identified partnerships with local community heat plants as a strategic resource for providing new business opportunities, apart from raw material availability and existing technologies. Although the Finnish sawmills have a long tradition in energy production, most energy-related investments have been made only during the past decade, and the sawmills would be keenly interested in increasing the efficiency of using their by-products through new investments. In conclusion, the Finnish sawmill industry being the local producer of wood-based bioenergy can support meeting the ambitious national target for renewable energy production for 2020. However, the volatile bioenergy policy changes act as a major factor of uncertainty in predicting the future development of the business environment and further increase the risk level for future investments. Keywords: opportunities, challenges, bioenergy, Finnish sawmill industry. Received 27 December 2011, Revised 22 March 2012, Accepted 19 April 2011

Forest Company Dependencies and Impacts on Ecosystem Services : Expert Perceptions from China

Global awareness of sustainability issues is growing rapidly, and business organizations are called to address wider social and environmental concerns along with economic performance. However, limited systematic knowledge exists on the interactions between forest industries and natural ecosystems. We thus investigated the role of ecosystem services in the context of China's forest sector. A qualitative research approach was used to elicit company external expert viewpoints on the topic. Our analysis focused on three themes: (1) forest company dependencies and impacts on ecosystem services; (2) business risks arising from dependencies and impacts; and (3) risk response strategies. The interviewed 20 experts identified a series of forest company dependencies and impacts (including negative and positive impacts) on several ecosystem services. The extent of dependencies and impacts is largely influenced by the business portfolio of the company. The perceived business risks include intense competition and the consequently increasing price for natural resources, which would affect forest company business plans, costs and outputs. The suggested strategies for turning risks into opportunities include outsourcing wood, changing production focus, promoting industrial upgrading and implementing regular assessments of corporate dependencies and impacts on ecosystem services. The findings of our study can guide companies' decision-making in managing forest ecosystems sustainably.Peer reviewe

Temperature Field of Tool Engaged Cutting Zone for Milling of Titanium Alloy with Ball-End Milling

When milling titanium alloy, the cutting temperature has a strong impact on the degree of tool wear and, in turn, tool life and the surface quality of the workpiece. The distribution of the temperature field on a tool’s rake face can be improved through the use of micro-textures, which help to reduce friction and, ultimately, wear on the tool. In this paper we present a new way to measure cutting temperature and examine heat distribution when milling titanium alloy with micro-textured ball-end milling tools. We first establish the heat flux density function for the contact area between the workpiece and the tool and then for the rest of the tool. Thermal stress simulation shows that adhesive wear tends to happen in the contact area and on the flank face, rather than at the tip of the tool, with the temperature distribution gradient for the rest of the tool being more uniform. The maximum value for thermal stress on the cutting edge was 2.0782 × 106 Pa. This decrease as you move away from the cutting edge along the contact area between the tool and the workpiece. Maximum deformation of the tool is also mainly concentrated at the principal contact point, with a value of 1.9445 × 10−9 m. This, too, decreases as you move away from the cutting edge and into the rest of the contact area. This research provides the basis for the optimization of tool structure and further investigation of the thermo-mechanical coupling behavior of micro-textured ball-end milling cutters when milling titanium alloy

Thermal Stability and Flame Resistance of the Coextruded Wood-Plastic Composites Containing Talc-Filled Plastic Shells

Talc is a popular filler for the fabrication of plastic composites. The presence of talc helps improve mechanical, thermal, and flame resistance properties of the composite. In this work, we report the influence of a talc-filled plastic shell layer on thermal stability and fire flammability of the core-shell structured wood high-density polyethylene (HDPE) composites manufactured through coextrusion. The result showed that morphological analysis of the char layer after combustion confirmed the formation of a continuous surface char layer with talc addition in the composites, helping block fire penetration and enhance overall fire resistance of the composites. The shell thickness averaged at 1.0±0.2 mm, which represents a fair thick shell over a 10 mm thick WPC core layer. The surface of regular wood-filled HDPE showed large cracks, allowing more rapid fire penetration and reducing its fire resistance. At 800°C, average residual weight for all composite was 21.5±13.8%, most of which was attributed to the inorganic nonvolatile talc components. With the increase of talc level, THR values of coextruded WPC decreased from 302.47 MJ/m2 (5 wt% of talc) to 262.96 kW/m2 (50 wt% of talc). When talc content in the shell layer was less than 25 wt%, the flame resistance properties were slightly enhanced compared with the composites containing unmodified HDPE shells. When talc content in the shell exceeded 25 wt%, the composite’s total heat release and its rate substantially decreased

Protective Effects of Salvianolic Acid A against Dextran Sodium Sulfate-Induced Acute Colitis in Rats

Salvianolic acid A (SAA) is an active phenolic acid derived from Salvia miltiorrhiza Bunge (Danshen). To explore whether SAA has a therapeutic effect against inflammatory bowel disease (IBD), an acute colitis model was induced in rats by administering 3% dextran sodium sulphate (DSS) for one week. SAA in doses of 4 and 8 mg/kg/day was given by tail vein injection during DSS administration. Both dosages of SAA ameliorated the colitis symptoms, with decreases observed in the disease activity index. A high dosage of SAA (8 mg/kg/day) promoted a longer colon length and an improved colonic tissue structure, compared with the DSS-treated rats not receiving SAA. SAA dose-dependently decreased colonic gene expression of pro-inflammatory cytokines (IL-1β, MCP-1 and IL-6). Moreover, a high dosage of SAA protected against DSS-induced damage to tight junctions (TJ) in the rats’ colons, by increasing TJ-related gene expression (ZO-1 and occuldin). Finally, using 16S rRNA phylogenetic sequencing, we found that SAA modulated gut microbiota imbalance during colitis by increasing the gut microbial diversity as well as selectively promoting some probiotic populations, including Akkermansia spp. Our study suggests that SAA is a promising candidate for the treatment of IBD