Towards a new business paradigm - A study of the paper packaging industry

An organization aiming to survive on a more challenging or changing market has to adapt or fundamentally change the way it is doing business. For the Swedish forest products industry, and more specifically the paper packaging industry, the market challenges range from saturated home markets, competing materials and increasing production costs, to growth of new markets and more powerful actors in the retail supply chain. In order to ensure a profitable and sustainable development in the long term, they have to continuously adapt or change. A number of scholars point at the need to reinvent or re-comprehend many of the existing and dominating business paradigms or models in contemporary industries that impede sustainable development in the long term. In practice, as in theory, there are two attributes that are intimately connected to long term success, namely customer orientation and innovation. These prerequisites are often synonymous with putting the customer at the heart of business strategy, and the ability to continuously identify and develop new products and services to match the market needs. But what may seem easy in theory is not always so straightforward in practice. The paper packaging industry, characterized by its capital- and know-how intensive production processes, has a long history of developing and excelling on a changing market place. By default, however, production has been the orientation, and innovation during the last decades has been tied to optimizing the production processes and lowering the costs of existing products, not primarily developing new products, services, or business models. To ensure the next generation competitive advantage on a more challenging and changing market, the industry itself is searching for new opportunities where customer orientation and innovation are two important cornerstones. Hence, the purpose of this thesis has been to explore and contribute to the understanding of a strategic change process towards customer orientation and innovation within the paper packaging industry upstream in the supply chain. Based on action research and a qualitative approach, two case studies have been conducted with two actors upstream in the paper packaging supply chain. The findings show that there are challenges related to the ability to implement a strategic change process towards customer orientation and innovation, namely: Domineering Perspectives – the production rather than customers being in focus; Tools and processes – the lack thereof yet their being important prerequisites for customer orientation and innovative product development; Strategy and Strategic decision – when non-aligned with what is intended in practice, and non-aligned with what is suggested in theory; and Implementation approach – when based on assumptions that do not support the purpose. Furthermore, the findings demonstrate how a strategic change process for increased customer orientation and innovation could be facilitated through an extension of the perceived supply chain boundaries to include downstream actors, while still regarding the challenges or prerequisites needed for directing the change efforts. The findings also show how an action research process allows for studying the process of change itself as well as the dialogue on the identified challenges through illustrating the gap between the intentions and perceptions in reality, and between theory and practice. For practice it is argued that these findings are important, not least when considering why and how to re-invent or re-comprehend existing business assumptions, models and tools. In particular, the actors within the forest products industry are considered here. For theory, it is suggested that there is more to be achieved in identifying the challenges and in studying the bridging process itself