Sources of competitive advantage in woodworking firms of Northwest Russia

The existing literature emphasizes the strategic choices of core competencies/capabilities based on intangible and tangible resources, and the combination of these as the base for developing firm‐level strategies. However, little is known about the organizational structure, strategic orientation, and future goals of woodworking firms in the East‐European countries in transition. This paper aims to produce information contributing to these information needs regarding Northwest Russia (NWR).

The largest potential increase in both production of and demand for wood products is in Russia, and this paper examines the issue in a case study of 18 small‐ and medium‐sized wood industry companies in NWR using thematic semi‐structured personal interviews.

The results indicate that closeness to the main markets, good logistics connections and access to large markets, i.e. other than raw‐material related factors, are the main perceived sources of competitive advantage among the Northwest Russian woodworking firms. Intangible resources are valued over tangible assets in case companies.

The companies target to shifting their production from commodity products, towards more specialized products and focusing on increasing the exports to the European Union. This is likely to intensify competition in the international markets for wood products in the future.

The paper provides new information about forest industry small and medium‐sized wood industry enterprises and their current business environment in NWR.