Strategy Formation in the Swedish Forestry Industry: Comparing SCA and MoDo

Abstract

SCA and MoDo have been two of the most important actors in the Swedish forest industry in the 20 century. Modo represents a family-owned and family-managed company with long traditions. The company has survived several threatening situations as management was willing to take on challenges and initiate adventurous ventures. However at the end of the 1980s management took on one challenge too many, resulting first in the family losing control of the company and eventually the company losing its independence. SCA illustrates a different role in the development of the industry. SCA was founded at the end of the 1920s when financial crises opened up an opportunity to restructure the forest industry. After a stumbling beginning the company gradually became one of the most influential actors in the industry. Especially since the late fifties and onwards the company is recognized as the leading pulp and paper company in Sweden. To understand the strategy formation processes in these two companies it is vital to apply a perspective characterized by a longitudinal, processual and holistic approach (Pettigrew, 1987). The problem, however, is how to fulfill these ambitions, especially within the format of a paper! In this paper the choice is to first provide the reader with a brief longitudinal overview of the historical developments. This overview is then extended into a qualitative and a quantitative part. The qualitative part is a summary of the major strategic actions undertaken in the two companies for the periods of 1955-2000 (SCA) and 1945-1999 (MoDo). The quantitative overview includes the relevant parts from the companies’ profit and loss statements and the balance sheets spanning the years 1960-2000 (SCA) and 1945-2000 (MoDo).