Pekka Mäkinen. (1993). Puutavaran kuljetusyritysten menestymisen strategiat. Acta Forestalia Fennica no. 238 article id 7684. https://doi.org/10.14214/aff.7684

English title: Strategies used by timber truck companies to ensure business success.

Original keywords: kannattavuus; puutavaran kuljetus; strategiset ryhmät; puutavaran autokuljetus; kuljetusyritykset; kilpailustrategia; liikkuvuuden esteet

English keywords: competitive strategy; profitability; wood transport; Timber truck transportation; mobility barriers; strategic group

Abstract | View details | Full text in PDF | Author Info

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.

The PDF includes a summary in English.

Mäkinen, E-mail: pm@mm.unknown

Category : Research article

article id 589, category Research article

Pekka Mäkinen. (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

Keywords: timber carriers; competitive strategy; success factors; deregulation

Abstract | View details | Full text in PDF | Author Info

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.

Mäkinen, Finnish Forest Research Institute, Vantaa Research Centre, P.O. Box 18, FIN-01301 Vantaa E-mail: pekka.makinen@metla.fi

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