In order to decide which categorization of competitive actions best suits this study, the characteristics of the forestry industry and the characteristics of this empirical study must be taken into account. First of all, as mentioned earlier, it must be acknowledged that it is hard to identify empirically, and especially only through the companies’ annual reports, some of the competitive action types Nokelainen (2008) proposes in his typology. Thus, for practical reasons some categories should be excluded, for example: “forbearing to bring about” (in the majority of cases it would be hard to find evidence that for example the company did not launch some new product or buy a new facility etc.). It would be the same case also with the competitive actions of the type forbearing to suppress (how does one know that the company or the representatives even know about the issue?), preserve (if nothing changes as the company maintains the status quo, it could be hard to detect this action.) and forbearing to destroy (the same as for forbearing to suppress).
Moreover, the domains of actions (financial resources, physical resources, legal resources, human resources, organizational resources, informational resources, relational resources and product attributes) are not all well represented in the forestry industry. Being an
machinery and also informational resources, such as technology (processes and knowledge) , I assume all the other categories would remain largely ignored. Nor does Nokelainen’s (2008) typology take into account the significant amount of vertical integration in the forestry industry. It would be useful to know if an action has been taking place in the sector of sawn timber, pulp production or perhaps in paper production as it might have completely different implications for the study.
There is, in fact, a typology that answers to these concerns. Lamberg, Laurila and Nokelainen have created a typology or a codification for the competitive actions especially in the forestry industry (2006). The codification consists of four parts, namely:
1) The general nature of the action,
2) The functional business area the action is concerned with, 3) International expansion, and
4) Cooperation.
The general nature of the action (1) has been divided into four categories, namely buy/acquire, build/expand/refurbish, sell/divest, and close.
Buying or acquiring takes place when the company acquires (or increases its ownership in) for example land or a production unit from another company. In this case the total production capacity of the whole industry does not increase, only the owner changes.
Building, expanding or refurbishing, instead increases the total production capacity of the industry, for example when the company builds a new production unit. A change in the nature of a production unit belongs in this category, too. Selling or divesting, like acquiring, does not change the aggregate production capacity of the industry. In this case the company sells or decreases its ownership in some entity. Closing happens when the company closes, for example, some of its production units. In this case, the aggregate production capacity of the industry naturally decreases.
The functional business area action is concerned with (2), has been divided into 11 different categories: 1. wood and recycled fiber resources, 2. sawn timber and wood products, 3. pulp, 4. paper production, 5. cardboard and containerboard production, 6. sheet products
7. packaging and converting products, 8. selling and distribution, 9. other related activity, a. several, and b. unrelated (for more detailed descriptions, see Appendix 1).
Field three (3), namely “international expansion” can be assigned one of the two values:
1. “International expansion”, where the action takes place, or is targeted at outside the home country of the company, or 2. “no international expansion” where nothing permits the assumption that the action takes place in or is targeted outside the home country of the company.
The last field, (4) “cooperation” likewise yields two alternatives: 1. “cooperation”, when the action has been conducted in collaboration with some other company or other entity, or 2. “no cooperation”, where nothing indicates that the action would be a joint-venture, an alliance or some other form of cooperation with another entity.
Defining these four fields, one will get a four digit/character code for every single action identified. For example a code 3722 would mean that the company in question has sold or divested (the general nature of the action 3) some unit, facility or similar of packaging and converting products (the functional business area the action is concerned with 7) in its homeland (international expansion 2) by itself without collaboration with other companies (cooperation 2).
These dimensions correspond well to the purposes of the study as they take into account, for example, the fact that the information to be analyzed is to be obtained from public sources (usually the most significant acquisitions, divestments, expansions and closings should be well reported in the annual reports of the companies). In addition, the different business areas in the forestry industry have been taken into consideration.
The categorization of Lamberg et al. (2006) will thus be used in this study with a slight modification. Instead of defining in which of the 11 functional business areas the action has taken place, in this study it will be defined, if the action has taken place in the core functional business area of the company (which will be defined later on in the “company
profiles”- section of the study) or in some other functional business area. In this way, the dimension of diversification of the companies’ operations can be taken into account.