The global business environment of today requires industries to be increasingly agile in order to create added value. There is a particularly urgent need to innovate and redefine business models in the mature pulp and paper industry, which is continually announcing mill closures and reporting persistent profitability problems. This paper focuses on the emerging forest energy business, which appears to offer many novel opportunities for both the forest and the energy industry. We conducted a qualitative dissensus-based online Delphi study and carried out themed expert interviews in order to identify the main industry- and company-level factors that are most likely to influence the bioenergy sector, its value-creation potential and forest and energy companies' future roles in it. The Delphi technique proved to be a valuable research tool with which we were able to obtain comprehensive information on a subject that lacks historical and financial data, and yet requires input from many quarters. The results suggest that the complementary resources held by forest and energy companies make collaboration in the bioenergy business favorable. Moreover, the procurement and logistics of forest raw material appear to be key success factors in terms of yielding the most synergetic gains. Uncertainty about policy interventions nevertheless causes concern given their relatively rapid effect on the prospects of the bioenergy business.
in the current global business environment, industries need to be increasingly agile and willing to change in order to gain sustainable competitive advantage [1] and [2]. The need to innovate and redefine business models is especially urgent in the mature pulp and paper industry (PPI), with its constant mill closures and persistent profitability problems [3]. One of the most interesting future business opportunities in the PPI, which is addressed in this paper, concerns the processing of forest-based biomass into bioenergy or biofuels, which would potentially allow forest companies not merely to survive but to become competitive [4], [5] and [6]. The knowledge and resources of the multiple actors in the evolving bioenergy chain will be needed in order to exploit this opportunity, however: the forest industry's access to biomass and its expertise in timber procurement and logistics, and of the know-how in the energy sector about producing energy from various raw-material bases and distributing it to the markets. There are also many external factors beyond the industries' control that could relatively quickly change the actors' willingness to tap into the emerging bioenergy business.
In other words, the setting for this research is the bioenergy sector, which is evolving at the interface between the forest and the energy industries (see Fig. 1). By way of theoretical background the paper considers the strategic challenges that currently confront mature, basic industries (forest and energy) in particular. It is suggested that pure cost-based strategies that have long been the tradition in the PPI no longer yield enough value. There is thus a strong need to find new sources of sustainable competitive advantage. The aim here is to assess the new business opportunities related to bioenergy production on both the industry and the company level. In order to do this we conducted a three-round dissensus-based online Delphi study and carried out themed expert interviews. The Delphi method turned out to be suitable for this research for several reasons. Most importantly, it made it possible to collect opinions from experts with a background in different industries. In sum, the primary objective here is to identify the main industry- and company-level factors that are most likely to influence the bioenergy sector and its value-creation potential, and the forest and energy companies' future roles in it.
This paper focused on the emergent bioenergy business, which is assumed to offer many novel value-creation opportunities for both the forest and the energy industry. The key objective was to identify and discuss the key company- and industry-level factors that affect this business opportunity. The data for the paper was collected in a three-round dissensus-based Delphi study and in themed expert interviews.
In this context, the Delphi system proved to be a valuable research method. First of all, we were able to obtain a comprehensive view of the bioenergy sector because the panel of experts included representatives of both the forest and energy industries, as well as of universities and joint industrial organizations associated with the emerging business area. Thus, we were able to avoid time and place constraints. In addition, on account of the anonymity the panelists were able to freely express their opinions on the subject, which given its topicality was quite sensitive and open to contradictory opinions and interests. Secondly, we found the Delphi method useful in gathering information on a subject that lacks historical and financial data. Thirdly, the various iterative rounds enabled us to refine the statements and to look more thoroughly at certain interesting subject areas that provoked the most discussion and the sharpest differences of opinion among the participants. Fourthly, giving feedback to the panelists enabled them to refine their responses and to further justify their opinions. All in all, the Delphi process was fruitful in terms of focusing discussion on this complex phenomenon and thus enhancing understanding of the business opportunities in the emerging bioenergy field.
By way of theoretical background this paper explored the strategic challenges that basic mature industries face with regard to value creation. It was stressed that the potential cannot be increased unless customer-oriented aspects are incorporated into the overall strategies [8] and [12]. Forest energy was presented as a promising value-creation opportunity in the PPI and the energy sector [4] and [6]. In the field of strategic management, however, there are differing opinions on whether the sources of sustainable competitive advantage can be attributed to companies' internal characteristics or their positions in the industry [15] and [17]. This paper therefore included both company-level and industry-level determinants in order to provide a comprehensive view of the value-creation potential in mature and basic forest and energy business. This was considered a valuable perspective in this context because both company- and industry-level factors have a great influence on value creation from forest-based biomass.
On the industry level the results suggest that the depletion of traditional raw-material reserves and increasing prices are among the key factors that are fuelling the global interest in bioenergy, and this is congruent with other research findings [45] and [46]. As far as the energy companies were concerned, the incorporation of renewable energy sources into their palettes was believed to secure raw-material availability and balance the price fluctuations, whereas the interest of the forest industry was considered to stem mainly from the opportunity to create new value-added from forest-based biomass. Nevertheless, uncertainty about the future emanated from several comments made by the panelists. The unpredictability of policy interventions and regulative decisions evoked the most concern because they could relatively quickly change the prospects of bioenergy business. The role of policy and financial incentives in bioenergy development has been addressed in many other studies, and the impact has been considered significant (see e.g., [47] and [48]). Furthermore, Nyström and Cornland [49] concluded from their study of the Swedish forest and energy industries that policy interventions would have a major influence on the role that the forest industry could play in the renewable energy market.
The company-level analysis indicated that versatile use of forest resources outweighed the current production of traditional pulp and paper products. The existing procurement and logistics of forest raw material were considered among the key success factors in the bioenergy business, although the panelists quite surprisingly differed in their opinions on whether pulp wood and energy wood should be separated in the forest and refined in distinct value chains. In particular, environmental concerns were seen to favor the simple use of wood (i.e., wood pellets, billets and chips), whereas greater potential for financial value creation was assumed to be in large-scale bioenergy production that would exploit economies of scale. In addition, if bioenergy production were connected with pulp and paper production it would allow full advantage to be taken of the existing resource endowments and raw material. With regard to the downstream operations of the bioenergy value chain, the results indicated that the commercialization of bioproducts would not be hindered by the lack of a logistics chain from the mill to customers. It was also evident that collaboration was considered more profitable than competition for the forest and energy industries because then the bioenergy business could exploit the existing knowledge and infrastructure. According to Rodden [4], it is imperative for the forest industry to find partners, and the lack of a supply chain for biorefinery products was identified as one of the key reasons. Thus, the expertise of the forest companies was seen to be in the upstream actions of the bioenergy value chain (from the source of raw material to the mill), whereas the energy companies controlled the downstream operations (from the mill to the customer). In terms of cost efficiency bioenergy production still seemed to be lagging behind, but in the long run the cost of energy generated from renewable sources and the cost of fossil-fuel produced energy could be expected to head in opposite directions [45].
It seems that changes happen more quickly on the industry level than on the company level. For example, transforming traditional pulp mills into biorefineries requires persistent strategic planning and commitment due to their risky and capital-intensive nature, and such changes may take years. On the industry level, adjustments to taxation, subsidy policy and other policy measures, for example, may be made relatively quickly. Moreover, because they may happen at short notice their influence on the bioenergy business and the actors' positions in the market is significant. Although it is important to recognize changes on both the industry and the company level, company-level factors may be of more interest to forest and energy companies, not least because external changes in these industries are generally beyond their control. Thus, company-level factors may offer more scope for bioenergy business.
In sum, the key contributions of this paper are as follows. First, it will help managers to recognize the factors that have a key impact on the bioenergy business, and policy makers may find it useful when contemplating policy decisions and financial incentives. It also brings out many perspectives and views on specific aspects of bioenergy that may help in overcoming traditional industry boundaries. In terms of methodological contributions, we applied the Delphi method in a way that valued the panelists' written comments over numerical values. As a result, we obtained a rich view of an emergent phenomenon on which it would not have been sensible to seek consensus. Theoretically, there seems to be controversy over the level of analysis to which sources of sustainable competitive advantage can be attributed. This paper focused on both the company and the industry level. This turned out to be valuable in this setting, in which mature basic industries are facing many structural changes in their industrial and operational environments at the same time as their resource endowments are allowing them to tap into new business opportunities.
This research, like any other, is subject to potential limitations. For instance, one could question whether the panel of experts chosen for the Delphi study was representative, and whether the number of experts was adequate in the later rounds. However, we considered it important for each panelist to have solid relevant expertise, and therefore it seemed advisable to form a relatively small Delphi panel. Another limitation is that the panelists were all of Finnish extraction, which may affect the generalization of the findings. In future it would be interesting to examine the different paths of bioenergy production more thoroughly, and to construct alternative scenarios that would take the role of policy interventions into account. It might also be fruitful to shed light on the potential gap between the existing and required resources for extensive bioenergy production.
