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

Abstract

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.

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