Part I – enterprise: 3 Description of the enterprise and the business area: 3




Дата канвертавання26.04.2016
Памер37.77 Kb.



by: Matej Vovk, University of Ljubljana, Slovenia

date: 20.06.2005


Part I – enterprise: 3

Description of the enterprise and the business area: 3

1.short history 3

2.main ratios (turnover, personnel), 3

3.main products, markets and customers, 3

4.main trends in the business area 3

Present situation regarding innovation aspects 3

1.present innovations 3

2.resources and working methods/strategies for innovations 3

Description of the business goals of the enterprise 4

Future innovations the enterprise is planning to work with 4

Analysis and recommendations for the enterprise how to enhance the innovations: 4

1.market analysis: potential, competitive circumstances 4

2.resource analysis (non-material): knowledge, networks 4

3.resource analysis (financial and other material resources) 4



List of recommended tasks to do 5

Part II – innovation case: 5

Chronology and subject of the innovation: 5

1.What was the problem situation before the innovation? 5

2.Development and implementation of the innovation process (milestones) 5

3.Detailed description of the innovation and outcome 5



Actors network analysis: 6

1.Which actors involved? (public administration; extension services; interest groups/NGO’s; education and research institutions; firm networks and cooperation) 6

2.Roles of actors (who contributed ideas/impulse/information/support?) 6

3.What kinds of business cooperation? (horizontal/vertical/lateral) 6



Analysis of the innovation process and evaluation: 7

Coordination and cooperation of actors 7

Sources/flow of information 7

Sources/flow of financial means (internal/external/relevance of support programmes) 7

Objectives of the innovation 7

Economic outcomes (profit/turnover/productivity gain) 7

Positive and negative results and outcomes of the innovation (economic performance and other/unintended effects) 7

Challenges and problems, strategies 7

Fostering and impeding factors 7

Future plans 7



Conclusions: 9

Lessons learnt/recommendations 9




Part I – enterprise:

Description of the enterprise and the business area:

  1. short history

Slavko Rabic is having a small family business. Decision to have business on his own came when the firm, where he worked before, went bankrupt. He registered himself as a farmer, while he had (and still has) some cows and became the owner of 72ha large forest which he inherited from his parents. Decision to produce something by himself came when he needed the construction material (wood material) for his own house, which he intended to built. While this kind of material is quite expensive, he bought machine for making logs and wainscot.


  1. main ratios (turnover, personnel),

Having 9.000 € annual profit (and rising) from selling logs and wainscot, which he makes from his own woods, it is enough for having an average monthly salary in Slovenia (which is about 700 €), especially concerning the fact, that the entire job is done by himself and with the family help. Because of that fact, there can’t be any discussion about annual turnover.


  1. main products, markets and customers,

While the business is rather small, he has his personal customers. He is selling some logs and woods to another sawmill owner, while the wainscot is sold to other private customers.


  1. main trends in the business area

There are no special trends in the business area where Slavko Rabic is. Customers always demands quality of the product.



Present situation regarding innovation aspects

  1. present innovations


Investment in new machine for making wainscot in year 2000. Instead of just selling the logs, he can now offer the final product to his customers. Buying a new machine enforced him to renew an old stable for storing the wainscot or lumber.

Investment in GPS which will ease his work in forest, while the borders of owners’ lands are not so clear on the terrain. With this innovation he intends to help other owners as well.


  1. resources and working methods/strategies for innovations

No special budget is dedicated to the innovation activities. The ideas for new innovations come with different needs. Information needed for implementing them are gathered via internet, forestry oriented magazines (although good ones are little too expensive), visiting forestry (and other) fairs, taking part in courses, having conversation with others…



Description of the business goals of the enterprise

His business goals are to at least keep the productivity he is having now, but to even increase the quality of the product (if possible). Because of the conditions of climate in his home valley, he is thinking about installation of biomass for heating the house and drying the lumber and wainscot.



Future innovations the enterprise is planning to work with

As said before, future innovation will be the installation of biomass for heating the house and drying his products.



Analysis and recommendations for the enterprise how to enhance the innovations:

  1. market analysis: potential, competitive circumstances

There are no serious competitors in the area, while majority of the people that live in the same valley as mister Rabic, worked in the same factory as himself (because it was the only one in the area as big) and when they were left without the job, they didn’t manage to have a business like him (even if they own a forest, they just sell the woods) or (in most of the cases) business at all. Therefore Slavko Rabic has a potential to even make his business bigger than it is.


  1. resource analysis (non-material): knowledge, networks

Information needed for implementing them are gathered via internet, forestry oriented magazines (although good ones are little too expensive), visiting forestry (and other) fairs, taking part in courses, having conversation with others…



  1. resource analysis (financial and other material resources)

Though having only 72ha of private forest, it is enough for making family business, considering the fact that average size of private forest in Slovenia is only 2,5ha (350.000 owners, having 80% of forests). The activity is not registered as a firm, while he is registered as a farmer, the activity is like supplementary business. Having 9.000 € annual profit (and rising) from selling logs and wainscot, it is enough for having an average salary in Slovenia (neto average salary is 700 €), especially concerning the fact, that the entire job is done by himself and with the family help.

Avoiding the loans from the bank, the financial help was received from his father so he established some kind of financial independence.

List of recommended tasks to do

My opinion is that one way to get bigger business from what it is today, mister Rabic should consider buying some new forests, while enlargement of forest properties is a kind of trend of modern forest holdings.



Part II – innovation case:

Chronology and subject of the innovation:

  1. What was the problem situation before the innovation?

The idea for innovation (buying a new machine in the year 2000) came when he started building his own house. While he was in need of house material, he decided to make it on his own; otherwise the building process would be too expensive for him. That is the reason he decided to have a business of it.

Because of relatively low cost of the investment in the innovation, there were no financial problems, while mister Rabic’s father in law represented the source of money needed for investment.

Main problem was to find the proper machine, but still not so expensive.


  1. Development and implementation of the innovation process (milestones)





    • buying a machine for making wainscot in 1997

    • renewing the old stable for drying and storing the products in 1997

    • investment in GPS



  1. Detailed description of the innovation and outcome

The innovation itself is investment in new machine for making wainscot. The investment cost 1300€. The price for spruce (as raw material) is about 32€ per cubic meter and he sells 150 cubic meters of this kind of wood. If he sells it directly to the sawmill, the price is about 50€ per cubic meter. By making a prefabricated wood component (wainscot), he gets more than 200€ per cubic meter and he sells 30 cubic meters of this product.

From the facts written above, it is clear that the investment was a good idea. Outcome from the spruce that he sells as a raw material is four times smaller than the outcome of sold wainscot no matter the costs for producing the final product (electricity and similar).

Actors network analysis:

  1. Which actors involved? (public administration; extension services; interest groups/NGO’s; education and research institutions; firm networks and cooperation)

Actor that (apart from mister Rabic himself) had main role from the beginning of the business is owner’s father in law (the whole family actually) because of his help in investment. His father in law also represents kind of capital support, so he doesn’t need any loans from the bank – he prefers smaller investments, which he can afford. Avoiding the loans from the bank, he established some kind of financial independence.

Help in raising the forest is given by the Forest management Bled. They are suggesting what kind of works should be done in the forest to get as good quality of the wood as they can get.

  1. Roles of actors (who contributed ideas/impulse/information/support?)

As already said before, the main actor was the whole family where the whole impulse came from (internal impulse). Idea was brought by mister Rabic himself. He also gathered the information from the forest fairs (technical fairs and conferences), magazines, internet and some seminars (institutional level information sources), practical and useful information came from talking with other forest and sawmill owners. Support was also given only by his family.


  1. What kinds of business cooperation? (horizontal/vertical/lateral)

The business cooperation is horizontal (with direct customers for wood) and vertical (cooperation with sawmills)



Analysis of the innovation process and evaluation:

  • Coordination and cooperation of actors

  • Sources/flow of information

  • Sources/flow of financial means (internal/external/relevance of support programmes)

  • Objectives of the innovation

  • Economic outcomes (profit/turnover/productivity gain)

  • Positive and negative results and outcomes of the innovation (economic performance and other/unintended effects)

  • Challenges and problems, strategies

  • Fostering and impeding factors

  • Future plans

It is a case of vertical innovation process model in personal level. Investment in new machine for making wainscot in year 1997. Instead of just selling the logs, he can now offer the final product to his customers. Buying a new machine enforced him to renew an old stable for storing the wainscot or lumber.


Fostering and impeding factors:

impeding factors:

  • lack of forest institutions (or enterprises) in the region

  • no flow of information between institutions (no cooperation between institutions)

  • afraid of taking credits

  • no information from chamber of Agriculture’s forestry advisory services

  • unavailability of financial means

  • no innovation & development support programme

  • high introduction costs

  • financial/tax expenditure

  • lack of information on innovation support schemes

  • technical standards and regulations

  • collaboration with administration and chamber


fostering factors:

  • cooperation with costumers

  • direct customers – no ‘middleman’

  • prefers small scale business – independence

  • cooperation with other forest owners

  • forestry subsidies from public funds

  • large forest (concerning the average size of forests in Slovenia, which is 2,6ha)

This case is somehow kind of process innovation, which is about labour saving, if the same amount of output can be produced with less labour. But while the initial idea wasn’t about saving labour (rather than that, it was increasing the price of the product), it is also a new forestry wood product innovation where the product is the sum of the physical, psychological and sociological satisfactions that the buyer derives from purchase, ownership and consumption. It is an existing product, but offered to a new market and is able to reach more buyers through a lower cost.

Though some estimates indicate that as many as 60 or 70 ideas are necessary to yield one successful product, this case shows that with little luck there is no need of having so many solutions. Because of that, the idea screening was not necessary. In fact, all the specific stages of the new product development process is rather different or partly left out. Because of the fact, that he has his own personal customers, there is no need for intensive project planning and commercialization or test marketing (there is only test of product).

Though having only 72ha of private forest, it is enough for making family business, considering the fact that average size of private forest in Slovenia is only 2,5ha (350.000 owners, having 80% of forests). The activity is not registered as a firm, while he is registered as a farmer, the activity is like supplementary business. Having 9.000 € annual profit (and rising) from selling logs and wainscot, it is enough for having an average salary in Slovenia (which is about 700 €), especially concerning the fact, that the entire job is done by himself and with the family help. Because of that fact, there can’t be any discussion about annual turnover.

To have a better picture of the profit he is having, here are some country data:


Surface size: 20.000 km2
Inhabitants: 2 million
GDP: 24, 3 billion €, economic growth in 2004 was about 3% (information varies from source to source)
EU member
AVERAGE MONTHLY SALLARY IN SLOVENIA (in year 2004):


      • BRUTO: 1119,5 EUR

      • NETO: 703,8 EUR

The share of income from forestry work (and making wainscot) is higher than it is usually the case. His prevailing goal is to maintain capital, like it is in most of the cases of forest owners that have between 10 and 100ha large forests (Rametsteiner). Nevertheless the strategy of Slavko Rabic is similar to the majority of the strategies of forest owners in central Europe: business as usual.


Innovation systems are compromised of:

        • actors (the owner himself with the family)

        • institutional background (seminars, fairs…)

        • and their interaction

Institutional background in terms of administration interest groups (forest administration) is missing.


Conclusions:

  • Lessons learnt/recommendations

To be successful in the modern world of business economics, the discontinuous intentional change in the inputs, outputs and process of an enterprise = INNOVATION is needed! Innovation brings economic growth, rises competitiveness and employment.

Innovation must be the main stimulating factor especially for small scale business – they are the one who can make smaller unemployment and higher standard.

Concerning the innovations in forest sector I think that more forest holders should think how to make their business better with implementing the innovations instead just selling the wood.

The case of Slavko Rabic shows that it is worth to innovate, especially in the forest sector, because you don’t need as much of financial support, you just need a good idea and you have to find a niche in the business.

My suggestion to mister Rabic would be that he should consider buying some new forests, while the investigations in EU shows that only holdings with large forests are profitable. Also big opportunity for mister Rabic is certification, which didn’t yet started in Slovenia.





База данных защищена авторским правом ©shkola.of.by 2016
звярнуцца да адміністрацыі

    Галоўная старонка