Innovation in buyer-supplier relationships : an international study of the wood industry

Abstract

Abstract This thesis is an international study of wood impregnation and fire protection in the wood industry and is the first of a series of research articles related to this topic. The aim of the thesis is to close the gap in the literature regarding the nature of buyer-supplier relationships in the wood impregnation industry and how these relationships affect product and process innovation. This thesis is based on data collected from the USA, Central Europe, and Scandinavia, with a focus on the chemical supplier side of these relationships. Data were collected through semi-structured interviews of 14 managers in predefined roles. The sample frame of three supplier companies was selected with the help of industry experts based on set criteria. Customers of each supplier were chosen based on snowballing methods through dialogs with the chemical suppliers. The results of this research demonstrate that both the suppliers and customers view these relationships as beneficial. Managers noted that the industry has been rather conservative and focused on research and development (R&D) for a long time. However, over the past several years, the wood industry has shifted toward more market-driven innovation. This study’s findings indicate that buyer-chemical supplier relationships in the wood industry are often informal and based on handshake agreements instead of formal contracts. The level of formality depends on the duration of the relationship and the level at which the two organizations interact with each other. The findings also indicate that the main aim of both parties is to create a long-term relationship. Findings from Scandinavia, Central Europe, and the USA indicate that customers affect innovation by providing suppliers with market intelligence about end-user needs for product and process innovation. A small portion of customers in the wood industry focus on performing innovation on their own, and they mainly conduct process innovation. Chemical suppliers are the main drivers of product innovation in their relationships with the wood industry, but these suppliers depend on selected customers to test new product innovations in the customers’ full-scale facilities. The key findings of this thesis have managerial implications and suggest topics for further research.