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Value-added strategies and forward integration in the Swedish sawmill industry: positioning and profitability in the high-volume segment
Industrial Marketing, Management and Engineering, Linkping University.
Industrial Marketing, Management and Engineering, Linkping University.
Industrial Marketing, Management and Engineering, Linkping University.
Luleå University of Technology, Department of Civil, Environmental and Natural Resources Engineering, Structural and Construction Engineering.ORCID iD: 0000-0002-3067-9451
2010 (English)In: Scandinavian Journal of Forest Research, ISSN 0282-7581, E-ISSN 1651-1891, Vol. 25, no 5, p. 482-493Article in journal (Refereed) Published
Abstract [en]

The changing market conditions for the Swedish sawmill industry place a focus on a better understanding of the pros and cons of value-added and forward integration strategies. The purpose of this article is to describe and explain recent value-added strategies in the Swedish sawmill industry. The study includes strategies from 13 of the 15 largest sawmill companies for the period between 2002 and 2005, describing a differentiation between value added in primary sawmill production and forward integration into secondary production. It also aims to relate some basic conditions, such as company size, company growth and corporate strategy, to value added and forward integration to profitability. The results show strong positive and significant correlations between forward integration, value added in primary production (somewhat weaker) and unit revenue, and profitability measured as return on investment. There were no strong or significant correlations between size and profitability, playing down the importance of economies of scale (among these already large companies). An interesting result is the much higher profitability of the buying sawmill companies compared with the forest corporations, stressing the importance of both a long-term strategy when investing in value-added activities and ultimately the priorities of ownership.

Place, publisher, year, edition, pages
2010. Vol. 25, no 5, p. 482-493
Keywords [en]
Industrial engineering and economy - Industrial organisation, administration and economics
Keywords [sv]
Industriell teknik och ekonomi - Industriell organisation, administration och ekonomi
National Category
Building Technologies
Research subject
Timber Structures
Identifiers
URN: urn:nbn:se:ltu:diva-12923DOI: 10.1080/02827581.2010.496738ISI: 000282594700010Scopus ID: 2-s2.0-77957791993Local ID: c1231670-d501-11df-8b36-000ea68e967bOAI: oai:DiVA.org:ltu-12923DiVA, id: diva2:985874
Note
Validerad; 2010; 20101011 (lms)Available from: 2016-09-29 Created: 2016-09-29 Last updated: 2018-07-10Bibliographically approved

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