Conceptual Model for Mapping Service Innovations: Case of Forestry Services in Finland

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1 Conceptual Model for Mapping Service Innovations: Case of Forestry Services in Finland Osmo Mattila 1 *, Mikko Tervo 1, Anne Toppinen 1 and Pekka Ripatti 2 1 University of Helsinki, Department of Forest Sciences, Latokartanonkaari 7, 00014, Helsingin yliopisto, Finland * corresponding author, [email protected] 2 Forestry Development Agency Tapio, Soidinkuja 4, Helsinki, Finland

Department of Forest Sciences, Latokartanonkaari 7, 00014, Helsingin yliopisto, Finland *

2 Contents 1. Introduction 2. Theoretical background 3. Methods and data 4. Results 5. Discussion

3 1. Introduction Major changes in the Finnish forestry service sector: Demand for Centres services - ageing Forest - urbanization Forest Management Associations - new industrial customers Forest Industry Companies Forest Service Enterprises Banks & Insurance Companies FORESTRY OPERATIONAL SERVICES Full forestry service package (1) Single item forestry services - 1 (1) 1-1 Landscaping and environmental management 1 1 (1) 1 - (1) - the market oriented organizations more towards Other Wood Buyers diversified needs Sales and rental of equipment - 1 (1) Forest fertilization decreasing dependence on forests Forest improvement 1 1 (1) 1-1 Special area forestry services Experimental forestry services Energy wood - markets (1) (1) WOOD TRADING SERVICES Wood trading service contracts (1) - new raw material Wood procurement and harvesting Financial services for wood trading Marking stands for harvesting Household wood harvesting and processing - (1) (1) 1-1 PROPERTY ADMINISTRATION SERVICES - new service organizations Forest planning Estate agency and valuation services (1) (1) Finance and investment services Changes in (1) public financing - of 1service organizations Forest insurances (1) 1 - Monitoring of forest estates growing stock information forestry planning Supplementary consumer services INFORMATION SERVICES Education and extension Consulting, advocacy etc. services Publications education and extension Accounting services Certification

Landscaping and environmental management 1 1 (1) 1 - (1) - the market oriented organizations more towards Other Wood Buyers diversified needs Sales and rental of equipment - 1 (1) 1 - - Forest

4 2. Theoretical background Service Dominant Logic (Vargo and Lusch 2004) Service is the fundamental basis of exchange Operant resources are the fundamental source of competitive advantage Customer creates value and a company can participate in value creation process by offering resources Client s competences Service provider s direct competences [C] Client s technical characteristics [C ] [T ] [Y] Final or service characteristics [T] Service provider s tangible and intangible characteristics Gallouj, F. and Savona, M. 2010

creation process by offering resources Client s competences Service provider s direct competences [C] Client s technical

5 2. Theoretical background Typology of service s (van der Aa & Elfring 2002) (1) Multi-unit organization s - Learning between units - Standardization - Close to the markets (2) New combinations of services - Larger assortment, cross-selling - Novelty from the way the components are combined (3) Customers as co-producers - Motivating and giving instruments to integrate - Better understanding of customers (4) Technological s - Can enable various service s

assortment, cross-selling - Novelty from the way the components are combined (3) Customers as co-producers -

6 2. Theoretical background Conventional Quality-based improvement Operation-oriented productivity Focused on internal people Product-based Supplier-dominant Collaboration-based Process improvement among diverse organizations From internal organization to collaboration with external organization Focused on back-end systems Customer-oriented Focused on front end systems such as web interface Customer requirement becomes important Diverse business models are developed Service dominant System approach The role of resource integrator is important Integration between back-end and front-end systems The Degree of Co-Creation Customer-oriented Conventional Service-dominant Collaboration-based The Degree Networked Collaboration Typology of service s (Nam and Lee 2010)

as web interface Customer requirement becomes important Diverse business models are developed Service dominant System approach The role of resource integrator is important Integration between

7 3. Methods and data Qualitative approach Earlier study: analysis of markets and offerings through web pages, other marketing material and 13 interviews More interviews going on Case firms of forerunner companies are focused on

other marketing material and 13 interviews More

8 4. Results Service category Definition Private/public Forestry operational services Wood trading services Management planning and property administration services Information services Managing forest to grow in a certain way Services aiming to convert wood into monetary terms Planning the usage of the forests; financial assistance Education and extension of forest owners to enable self-employment; better understanding of basis for buying services Public Private Private Public (1) Multi-unit organizations Largely used in big companies, trend among public organizations (2) New combinations of services Forestry still separated sector (3) Customers as co-producers Role is changing due to urbanization (4) Technological s Conventional in productivity

owners to enable self-employment; better understanding of basis for buying services Public Private Private Public (1) Multi-unit organizations Largely used in big companies, trend among

9 The Degree of Co-Creation High Low Personalized forest planning Customer-oriented Full scale forest property administration Forest estate generation changes Forest resource information bulletin Conventional Machined timber harvesting / Energy wood trading Web-based work exchange services Education and extension Service-dominant Cooperative networks of entrepreneurs Collaboration-based Low High The Degree Networked Collaboration

Machined timber harvesting / Energy wood trading Web-based work exchange services Education and extension

10 5. Discussion Reasons for lack of service-dominant s Ensuring current customerships Offering full service requires multiple resources Many resource integrators in the markets - Mostly dependent on wood trade conflicts of interests Changes in forest owners competences and technical characteristics changes in final services Difficulties to find information about prospective forest owners

dependent on wood trade conflicts of interests Changes in forest owners competences and

11 References Gallouj, F. and Savona, M Towards a theory of in services: a state of the art. In Falloj, F. and Djella, F (ed.): The Handbook of Innovation and Services A Multi-disciplinary Perspective. pp Ingold, K. and Zimmermann, W How and why forest managers adapt to socio-economic changes: A case study analysis in Swiss forest enterprises. Forest Policy and Economics Volume 13, Issue 2. pp Mattila, O Forestry services for Finnish private forest owners Service offerings, service organizations and the markets. Master s thesis Van der Aa, W. and Elfring, T Realizing s in services. Scandinavian Journal of Management, 18. pp Vargo, S. and Lusch, R Evolving to a new dominant logic for marketing. Journal of Marketing, 68 (January),1-17

How and why forest managers adapt to socio-economic changes: A case study analysis in Swiss forest enterprises. Forest Policy and Economics Volume 13, Issue 2. pp. 97-103. Mattila, O. 2010.

12 Thank you! Any questions?

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