Tomas Nord

Business models in industrialized building of multi-storey houses

The business model construct has been widely used during the last decade, partly because of its potential to provide a holistic view of how companies do business. A test of how prefabrication could form the basis of a construction firm’s business model can lead to an understanding of the potential for the competitiveness and profitability of industrialized building. The aim is to adapt a general business model construct and use it to empirically identify the most frequently used and the most viable business model. The theoretical perspective is employed to examine how a company does business and which activities and resources are mobilized through the distinction between strategic and operational effectiveness. The multiple case studies include five major Swedish companies that produce prefabricated timber building systems and the analysis is grounded in pattern-finding. The business model construct includes: market position, offering, and operational platform. The result indicates five business model elements: prefabrication mode, role in the building process, end-user segments, system augmentation and complementary resources. Applying this construct to the five case companies revealed that one out of seven models was found to be viable in terms of both ‘market share’ and decision-makers’ opinions. One important conclusion is to take the prefabrication mode as the starting point for business model design and then adapt the other elements to a good fit.

Building a new supply chain position: an exploratory study of companies in the timber housing industry

Innovation is an important source of growth for many companies. It is also challenging, as it may require that the companies build a new position in the supply chain. The literature is devoid of analysis of different ways to build such positions in the construction industry. The purpose here is to explore the challenges involved in implementing innovations that require companies to establish new positions in a construction supply chain. Three in‐depth case studies in the Swedish timber housing industry illustrate different challenges that arise with the different modes of repositioning of organic growth, collaboration and acquisition, and with moving either backward or forward in the supply chain. Organic growth is a slow process that prevents companies from taking a first‐mover advantage. Acquisitions can involve difficulties with exploiting acquired competences. Collaboration brings the risks of diversity of interests and transient solutions. Furthermore, and as shown in the cases studied, challenges are associated with pre‐existing competencies and relationships, with technology‐oriented companies facing customer‐related difficulties and market‐oriented companies mainly facing ones involving technological solutions. The construction industry’s idiosyncrasies amplify these challenges, as its fragmentation makes it difficult to connect with external companies at new positions. Stronger ties with business partners are likely to enable construction companies to exploit more easily innovations that require repositioning in the supply chain.

Value-added strategies and forward integration in the Swedish sawmill industry: positioning and profitability in the high-volume segment

Abstract The changing market conditions for the Swedish sawmill industry place a focus on a better understanding of the pros and cons of value-added and forward integration strategies. The purpose of this article is to describe and explain recent value-added strategies in the Swedish sawmill industry. The study includes strategies from 13 of the 15 largest sawmill companies for the period between 2002 and 2005, describing a differentiation between value added in primary sawmill production and forward integration into secondary production. It also aims to relate some basic conditions, such as company size, company growth and corporate strategy, to value added and forward integration to profitability. The results show strong positive and significant correlations between forward integration, value added in primary production (somewhat weaker) and unit revenue, and profitability measured as return on investment. There were no strong or significant correlations between size and profitability, playing down the importance of economies of scale (among these already large companies). An interesting result is the much higher profitability of the buying sawmill companies compared with the forest corporations, stressing the importance of both a long-term strategy when investing in value-added activities and ultimately the priorities of ownership.

Networks and Local Mileus as a Furniture Industry Innovation Platform

Innovation is increasingly recognised as a key factor in environmental protection and sustainable development in forestry and forest-based industries. This volume provides a comprehensive theoretic ...

Role of Policies and National Programmes on Innovations in Timber-frame Construction

The market share of timber frame construction has increased in many European countries after the revision of national building regulations, implementation of national development programs as well a ...

Cooperative engagement to define and deliver client value in the construction industry

Relations in the construction industry are traditionally of arms-length, and client value is realized by contractual arrangements. Partnering, as a concept of strategic and project alliances, has been suggested to change the adversarial behaviour by moving towards a more cooperative climate. In the consumer market there are recent examples of changes from firm-centric view of value creation to a co-creation view, with intimate interaction between consumer communities and producers to jointly define and deliver value. The case study has an explorative purpose of describing a cooperative contracting engagement of a local Swedish contractor, when engaging in a recent project. The result shows the opportunities of applying the building blocks of improved interactions to reach co-creation of value: dialogue, access, risk-benefit and transparency. The early and interactive involvement of the contractor with the developer and end-user established project objectives valued and favoured by all parties before the procurement. Important capabilities of the contractor included project management, cooperative behaviour and design and calculation, and a strive to have a pleasant and friendly realisation of the project.