Adapting to the Digital Age: Strategic Change in the Pulp and Paper Sector

Abstract

With the rise of the internet and electronic media, the first two decades of the 21st century have seen a rapid decline in demand for graphic paper. This study examines the strategic actions pulp and paper companies have been taking to adapt to such changes in their business environment, with the aim of providing a comprehensive description of both the leading firms and the smaller players in the industry. Public documents of 40 public and privately owned pulp and paper manufacturers in North America and Nordic Europe were examined for a range of change-related activities, such as repositioning efforts and changes to leadership, financing, and/or firm structure. Companies have been gradually reducing their production of graphic paper and increasing production of other products, thereby illustrating the twin turnaround concepts of retrenchment and recovery. Due to the capital outlay required to switch from one product to another, larger, integrated companies have generally been more successful at adapting than smaller companies that make mostly graphic paper. An unexpected observation was that declining demand was just one of many pressures on the pulp and paper industry; company documents also frequently mentioned fiber supply shortages and government regulations as drivers of change.