Current issue: 52(5)
Under compilation: 53(1)
The aim of the study was to determine how timber truck transport business succeeds in the competition within its sector, and the effect it has on profitability structure of the sector. Furthermore, strategic groups were looked at in depth, as well as the competitive strategies of the most successful companies and groups of companies. The theoretical competitive strategy was operationalized.
A total of 53 timber truck transport entrepreneurs were interviewed. The average age of the entrepreneurs was 51 years. Of the businesses, 35% were partnership companies, 6% open companies, and 59% self-employed. The business owned an average 1.5 trucks, and at the time of interviewing their average age was four years. Nearly nine out of ten entrepreneurs had no schooling for the line of business, and four out of five had no short-term training. The attitude of the timber truckers toward their activities was more like that of self-employed persons than that of entrepreneurs. A total of 61.5% of them reporter that they carried on entrepreneurship simply to assure themselves a job.
The operational profitability of the sector has been good in the years 1984 to 1990, and the business profitability fairly good. The median equity ratio in the sector has remained at about 20% and the ratio of debts to turnover about 40%. The sector has been more profitable than forest machine contracting primarily due to the barriers to entry into the sector.
Cluster analysis, using Ward’s method, was used for seeking out strategic groups. The lengths of the customer relationships proved a significant barrier to mobility. The most successful business used the competitive strategy of cost weighted focussing. This was done through optimization of the capacity utilization rate and through choice of correct customers. The strategic position for successful business was judged to be good in the future. Success in the future will require above all activeness and innovation ability.
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