Pekka Mäkinen

Competitive strategies applied by Finnish timber carriers following deregulation

Mäkinen P. (2001). Competitive strategies applied by Finnish timber carriers following deregulation. Silva Fennica vol. 35 no. 3 article id 589. https://doi.org/10.14214/sf.589

Abstract

The present study examines the success of timber carriers and the factors involved in their success immediately following deregulation. In Finland in 1991 the timber trucking sector was deregulated. Means testing was changed to suitability testing, which meant that the Ministry of Transport and Communications, provincial authorities and the trucking association could no longer regulate the entry of new entrepreneurs to the sector. The present research material contains two successful enterprise groups. In the strategically more successful group, good results were obtained with a moderate labour input by the entrepreneurs. The strategic position of this group was considered to be successful because the operating hours of the trucks were fairly high but the work loads imposed on the entrepreneur remained reasonable. The profitability of these enterprises was so good that it was possible to use hired labour to drive the trucks. The work load of close to half of the unsuccessful entrepreneurs had been large or extremely large. In some cases, the obvious reason for failure was their inadequate transportation rates. Others had seemingly satisfactory haulage rates when compared to the average, but still their enterprises performed poorly. In these cases, the explanation lay in the inefficiency of operations or excessive debts, the latter caused, for example, by earlier operations. The results of this study do not support the view that a lot of hard work generally means success in entrepreneurship. The results support the view that both entrepreneurs’ work and management inputs have a significant impact on the success of the enterprise, and that high tariffs alone are not a guarantee of success.

Keywords
timber carriers; competitive strategy; success factors; deregulation

Received 1 July 1999 Accepted 15 May 2001 Published 31 December 2001

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