Opening Up New Strategic Options in the Forest Industry: Case Biorefineries

摘要

Due to the global climate change discussion and drastic challenges within the external operational environment, the traditional forest industry companies are forced to search for new value creating business opportunities. This paper discusses this development in the forest industry and offers some illustrative examples to demonstrate the vital need for opening up new strategic options. To address these challenges, we launch a dynamic strategic framework for a forest firm. This dynamic capabilities- and strategic options- based framework comprises of (ⅰ) sensing the weak signals of the operational environment, (ⅱ) formulating them as strategic options in order to capture their upside potential, (ⅲ) hedging against the downside risks of the options, (ⅳ) exercising these options often related to imperfect intangible knowledge assets markets, and (ⅴ) reconfiguring the existing knowledge base and capabilities to sustain competitive advantage obtained. The framework is illustrated with strategic options possible for the forest industry the main focus being on the interface between the forest and energy industries by means of a forest biorefinery case.