Paula Jylhä, Pasi Rikkonen, Katri Hamunen. (2020). Size matters – an analysis of business models and the financial performance of Finnish wood-harvesting companies. Silva Fennica vol. 54 no. 4 article id 10392. https://doi.org/10.14214/sf.10392

Keywords: profitability; business model; business model canvas; entrepreneur; success factor; wood-harvesting enterprise

Highlights: Economic success was related to company’s size, Small companies with a turnover of less than 600 000 € a^–1 are struggling with profitability; Large enterprises continue to grow and innovate new business concepts; The competitive edge of large companies was reflected in large production capacity, efficient operations, versatile supply of services, and power in negotiations.

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The size of Finnish wood harvesting enterprises has grown, and entrepreneurs have become responsible for various additional tasks, resulting in networking with other harvesting enterprises of various sizes and suppliers of supporting services, but the profitability of the wood harvesting sector has remained low. In the present study, the financial performance of 83 wood harvesting companies in Eastern and Northern Finland was evaluated, based on public final account data from a five-year period between 2013 and 2017. The factors underlying economic success were identified based on 19 semi-structured entrepreneur interviews. The Business Model Canvas framework was applied in the analyses. In particular, the smallest companies (with an annual turnover of less than 600 000 €) struggled with profitability. They showed increasing indebtedness, suffered from poor power in negotiations, had typically short-term contracts, and faced difficulties in retaining skilled operators. Most of the small companies were subcontractors of larger wood-harvesting companies. The better economic success of larger companies was likely based on their capacity to provide wood harvesting services in large volumes and supply versatile services, power in negotiations, and more cost-effective operations. The future development of wood harvesting seems to be polarised: larger enterprises are likely to continue growing, while the size of smaller enterprises has stabilised. Enhancing business management skills and practices is required in enterprises of all size groups.

Jylhä, Natural Resources Institute Finland (Luke), Production systems, Teknologiakatu 7, FI-67100 Kokkola, Finland E-mail: paula.jylha@luke.fi
Rikkonen, Natural Resources Institute Finland (Luke), Bioeconomy and environment, Lönnrotinkatu 7, FI-50100 Mikkeli, Finland E-mail: pasi.rikkonen@luke.fi
Hamunen, Natural Resources Institute Finland (Luke), Bioeconomy and environment, Yliopistokatu 6B, FI-80100 Joensuu, Finland E-mail: katri.hamunen@luke.fi

article id 1323, category Research article

Tiina Laine, Kalle Kärhä, Antti Hynönen. (2016). A survey of the Finnish mechanized tree-planting industry in 2013 and its success factors. Silva Fennica vol. 50 no. 2 article id 1323. https://doi.org/10.14214/sf.1323

Keywords: regeneration; boreal; forestry; silviculture; mechanization; planting machines; critical success factors (CSFs)

Highlights: In 2013, 31 planting machines were operated by 22 businesses and planted 4.7 million seedlings on 2663 hectares in Finland; Critical success factors included expertise of planting machine operators, high quality planting, adequate amount of work, stoniness, and removal of slash; Growth of the industry will depend on improved cost-efficiency, appropriate worksites, marketing, development of planting machines.

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The aim of the study was to update the information pertaining to mechanized tree-planting activity in Finland in 2013 and its success factors. All businesses providing a mechanized tree-planting service were interviewed and asked to describe their equipment and activities, identify critical success factors (CSFs), and suggest areas for improvement. In 2013, 31 planting machines (18 Bracke P11.a, 11 M-Planter and 2 Risutec) operated by 22 businesses planted approximately 4.7 million seedlings on 2663 hectares. CSFs included expertise of planting machine operators, high quality planting, adequate amount of work, stoniness, and removal of slash. Based on the survey, some recommendations for improving mechanized planting work can be made. Firstly, improving the cost-efficiency of mechanized planting is necessary to enhance businesses’ profitability. Secondly, worksite selection is crucial as stoniness, stumps and slash debris diminish productivity. Lastly, the popularity of mechanized planting in the future will benefit from more marketing. Many businesses were unwilling to increase the area of service, invest in new equipment, or increase the volume of planting work but they believed that mechanized planting will become more popular in the near future.

Laine, Natural Resources Institute Finland (Luke), Management and Production of Renewable Resources, Juntintie 154, FI-77600 Suonenjoki, Finland E-mail: tiina.laine@luke.fi
Kärhä, Stora Enso Wood Supply Finland, P.O. Box 309, FI-00101 Helsinki, Finland E-mail: kalle.karha@storaenso.com
Hynönen, University of Eastern Finland, Faculty of Science and Forestry, P.O. Box 111, FI-80101 Joensuu, Finland E-mail: hynonena@gmail.com

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

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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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