Epsilon Archive for Student Projects

Abstract

An increased demand for processed goods on the property market has contributed to
investments within the Swedish sawmill industry. The purpose with this study is to make a
market investigation of pre cut lengths within a defined geographic area. The constituent for
this investigation is HAL (AB Hilmer Andersson) who invests in a new plane facility and two
finger jointing machines in affiliation to their sawmill in Lässerud, the vest part of Värmland.

To investigate the demand of pre cut lengths and identifies the value creating factors and cost
factors which the customer within the segments industry and property market perceive, have
different customer value theories been used. Theories of customer value and the theory about
offering has been the source of creating the qualitative interview with a selection of current
and new potential customers for HAL.

The result of the study first gives an introduction of HAL’s new offering and a description of
HAL’s current customers, which gives the reader an understanding of why searching for new
customers is made in the defined area. The result of the visit interviews (which were made
with a selection of current customers) concretises the value creating factors and cost factors
which they perceive in current business relation with HAL. An analyse of the result were
made with a customer-value-model. The just-in-time and product attribute together with a
good personal relation was the main value creating factors, while the price of the product was
the conclusive cost factor.

A register of interesting Swedish and Norwegian customers were constituted. HAL made a
selection of new potential customers from the register that I made visit interviews with. HAL
also made a selection of new customers which was called to prove the reliability of the result.
The customer which HAL didn’t select can be used as a future customer database. A match
was made between the new potential customers and the value HAL has approved that they can
deliver their customers. It was shown in the analyse that all the new potential customers in
general matched the value HAL can deliver. Though one of the new potential customers
demanded products that HAL cannot produce in their new facility, however there was other in
the range of HAL’s products that could be of interest instead.

Demanded assortment for the industry customers was pre cut (in millimetre precision) lengths
which were direct adapted for their own production. The mostly demanded pre cut lengths of
interest were approximately 2,5 m for weathering and structural timber. Plank which are used
for the course of logs or roof construction are demanded pre cut in longer lengths (more than
5,4 m). However lengths up to 12 m are today (2010) low. This is mostly apparent in the
property market where the most of their own customers are DIY (Do-It-Yourself) and pro
customers and they often demand shorter lengths than 6-7 m.

The roof truss manufacturer (which is a part of the industry segment, due to HAL’s definition)
has neither stock capacity for lengths over 6 m nor handling capabilities in their own plants.
They demanded timber package that were cut in module lengths which they cut with the
angels needed for their own roof truss constructions.

The conclusion is therefore that the demand seems to be highest both for pre cut lengths and
lengths up to 12 m in the industry segment.

Finally in the study there is a review of the usefulness of qualitative research methods for
market investigations within the sawmill industry. If HAL takes part of understanding both
value creating and cost creating factors the investment will be a successful choice at a
customer perspective, because there is a demand big enough to reach HAL’s increase in
production capacity in the geographic studied area.