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Abstract
Political and economic development in Russia and other Eastern European countries have
been the major driving force of the changing European markets for wood products since the
early 1990s. However, very little is known about the organizational structure, strategic
orientation and future goals of woodworking firms in Russia. Theoretically, an increasing
body of literature emphasises the strategic choices of core competencies/capabilities based on
resources, and the combination of these with firm-level strategies. This study examines the
issue in the case of 18 small/medium-sized wood industry companies in the emerging
markets of Northwest Russia using thematic structured interviews. The interviewed Russian
woodworking firms emphasised closeness to the markets, good logistic connections and large
market size as the main sources of competitive advantage. Therefore, other than raw material
based issues appear to provide competitive advantage or disadvantage to the Northwest
Russian woodworking companies. High taxation, corruption and lack of capital strongly
characterized the problems in their business environment. In the future, these companies
wanted to change from commodity products towards more specialised products and focus
more on export markets in Europe than the domestic markets. If the results are more
generalizable, competition on the European markets for wood products will intensify,
extending also to the markets for higher value added wood products.