Network co-operation as a source of competitiveness in medium-sized Finnish sawmills

Abstract

In the Finnish sawmill industry, inter-firm collaboration has often been brought up as a means of creating a competitive edge in global markets by achieving economies of scale. According to the resource-based view (RBV), a firm can evaluate its current or potential partners by considering firm-level collaboration as a portfolio of complementary strategic resources. The specific focus of the study is on examining the types and forms of sawmill co-operation, how the co-operation emerged and which firm-specific resources are mainly related to cooperation. Based upon this, we can see how the managers of medium-sized sawmills perceive network co-operation as facilitating the achievement of a sustainable competitive advantage. The empirical data for this study were collected by interviewing 16 managers and employees in medium-sized non-integrated sawmills, a joint-venture marketing company and other cooperative partners. The findings of the study show that meaningful and beneficial co-operation partnerships exist in the Finnish sawmilling industry, but the sawmill managers do not perceive this collaboration as a strategic resource. The marketing company was the only firm in this study that relied on its co-operative networks in seeking a sustainable competitive advantage. To make more of co-operative partnerships, the principles of co-operative networking should be understood better in the sawmilling industry in order to know what to expect from cooperation. Furthermore, the managers should have the courage to engage in more extensive co-operation in order for strategic rents to materialize. Since the selection of the right partners is fundamental, further studies could be conducted on the reasons behind failed or terminated co-operative arrangements to gather further empirical knowledge in this subject area.

Strategic business networks in the Finnish wood products industry: a case of two small and medium-sized enterprises

“…Regarding the network B, issues with openness among partners were raised, whereas in the case of emerging network around company A, a higher customer involvement would be fruitful. In comparison to an earlier study of the Finnish sawmilling industry SMEs (Toppinen et al 2011), our findings suggest a more positive attitude towards network-based business models. However, the selected two case companies do not represent the whole wood products industry, but are more as frontrunners in adopting network-based business models.…”

“…In previous research, inter-firm collaboration has often been brought up as a means of creating competitive edge in tightening global competition in which traditional production orientation does no longer seem to pay off (Toppinen et al 2011).…”

“…Despite the potential advantages of networking (Varamäki and Vesalainen 2003), networks have not been in previous studies for sawmilling industry seen as a strategic resource (Toppinen et al 2011). Nevertheless, while benefits from networking in wood industry seem to exist (e.g., Lähtinen et al 2009) there is lack of research on this topic, especially from the service development point of view.…”

Renewing the sawmill industry: studies on innovation, customer value and digitalization

“…While the core offering will remain important for the sawmill industry in the future, the business focus should be targeted toward genuine interest to solve the customer's problems and, most importantly, a collaborative attitude throughout the value chain. Compared to earlier research (e.g., Toppinen et al, 2011;Mattila et al, 2016), this study's findings are congruent and supplementary. In other words, comprehensive understanding of the overall picture and systematic ways to facilitate customer value creation are needed.…”

“…This differs from traditional, production-oriented views, where value is perceived as embedded in goods, and customers "destroy" this value. Improved customer focus has also been increasingly linked to the forest industry's future competitiveness (Niemelä et al, 1996;Uusitalo, 2005;Toppinen et al, 2011;Hansen et al, 2015;Mattila, 2015;Mattila et al, 2016) and innovation Hansen et al, 2017). Also, innovative utilization of the information and communication technologies (ICT) has been noted (Cohen & Kozak, 2001;Hetemäki, 2010).…”