Opening Up New Strategic Options in the Forest Industry: Case Biorefineries, 2009 TAPPI Engineering, Pulping, Environmental Conference

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