Diversification and its reflections on profitability - strategic change in pulp and paper industry in the years 1996 and 2006

The purpose of the thesis was to analyze diversification in pulp and paper industry (PPI), which is an industry facing enormous strategic challenges as many of the basic parameters of its operational environment are rapidly changing. The objective was to explore, how PPI companies have reacted to these changes by adjusting their strategies in terms of diversification and how the adjustments have affected their profitability. The study was statistical in nature. The results indicate that PPI companies in deed had reduced the degree of unrelated and related diversification , but the positive performance implications of the changes were debatable. In light of the data used in the study lower level of diversification did not lead to better profitability, in fact, the companies with the highest level of diversification had the best profitability. By contrast, reducing the level of unrelated diversification improved the profitability development; whereas reducing the level of related diversification deteriorated the profitability of the company. The results were not statistically significant and they cannot be generalized outside the data of the study.

Russian mobile telecommunications market: players and trends

Objective of this work was to clarify the competitive situation of Russian mobile telecommunications market: who are the main players, are there many regional operators, what is the possibility of new entrants and how intensive is the competition. In the beginning the history of Russian mobile telecommunications sector is described. In the next chapter environmental factors of the market are examined with the help of PESTEL analysis. After that, players of the market are introduced to ease the following of next chapters. The main theory for this work was industry analysis of five competitive forces by Michael Porter, which is presented before the theory related industry analysis of Russian mobile telecommunications industry. Research for the industry analysis is mainly based on up-to-date articles describing Russian market. As a result of the industry analysis, competitive situation of Russian mobile telecommunications industry and the future prospects are described with the help of factors coming from the PESTEL-analysis. Finally development and future prospects for Russian 3G are reported. As a result of this work, it can be said that Russian mobile telecommunications market is not likely to maintain the growth of previous years, because the market is near saturation. According to passive SIM-cards it has already received saturated. The saturation will also make the market share game between operators more volatile. The market is dominated by three national operators that covered 88% of the income in the first half of 2007. In addition to these three, there are also several regional operators. Structure of the market is likely to consolidate.

Clustering and international competitiveness of information technology industry in the Saint Petersburg area

The main objective of this study is to assess the potential of the information technology industry in the Saint Petersburg area to become one of the new key industries in the Russian economy. To achieve this objective, the study analyzes especially the international competitiveness of the industry and the conditions for clustering. Russia is currently heavily dependent on its natural resources, which are the main source of its recent economic growth. In order to achieve good long-term economic performance, Russia needs diversification in its well-performing industries in addition to the ones operating in the field of natural resources. The Russian government has acknowledged this and started special initiatives to promote such other industries as information technology and nanotechnology. An interesting industry that is basically less than 20 years old and fast growing in Russia, is information technology. Information technology activities and markets are mainly concentrated in Russia’s two biggest cities, Moscow and Saint Petersburg, and areas around them. The information technology industry in the Saint Petersburg area, although smaller than Moscow, is especially dynamic and is gaining increasing foreign company presence. However, the industry is not yet internationally competitive as it lacks substantial and sustainable competitive advantages. The industry is also merely a potential global information technology cluster, as it lacks the competitive edge and a wide supplier and manufacturing base and other related parts of the whole information technology value system. Alone, the industry will not become a key industry in Russia, but it will, on the other hand, have an important supporting role for the development of other industries. The information technology market in the Saint Petersburg area is already large and if more tightly integrated to Moscow, they will together form a huge and still growing market sufficient for most companies operating in Russia currently and in the future. Therefore, the potential of information technology inside Russia is immense.

Strategisen johtamisen omistajalähtöinen näkökulma

Tämän tutkimuksen tavoitteena oli analysoida strategisen johtamisen omistajalähtöistä johtamismallia kirjallisuuden valossa. Tutkimusmenetelmänä käytettiin olemassa olevaan tekstiaineistoon perustuvaa tulkitsevaa käsitetutkimusta, jolle on ominaista, ettei tutkija ole vuorovaikutuksessa aineiston tuottajan kanssa. Työ oli luonteeltaan teoreettinen, kuvaileva ja laadullinen Tutkimuksen aineistona toimi neljä omistajalähtöistä johtamista käsittelevää teosta, joista kahdessa annettiin kokonaiskuva omistajalähtöisestä johtamisesta, yhdessä aihetta lähestyttiin arvonmäärityksen näkökulmasta ja yhdessä riskien-hallinnan näkökulmasta. Strategiaviitekehys muodostettiin käyttäen hyväksi Chaffeen kolmea, Mintzbergin yhdeksää sekä Volberda ja Elfringin kolmea koulukuntaa. Koulukuntajakoa hyödynnettiin strategisen johtamisen historiallisiin taustoihin tutustumisessa. Yrityksen arvonmääritykselle muodostettiin viitekehys strategia-kirjallisuuden määrittelemistä arvostrategioista. Kasvustrategian viiitekehys muodostui monialaistumisesta ja kansainvälistymisstrategiasta. Tutkimustulokset osoittavat, että omistajalähtöisesti johdetun yrityksen kaiken toiminnan lähtökohtana on omistajien varallisuuden kasvattaminen. Omistajien yritykseen kohdistuvat odotukset ovat yrityksen markkina-arvossa. Hallituksen merkitys johdon ja omistajien rajapintana lisääntyy. Johdon palkkiot on kytketty osakekurssiin. Osakkeenomistajat voidaan jakaa kahteen ryhmään: pääomasijoittajiin ja pörssisijoittajiin. Pääomasijoittajat odottavat yritykseltä tasaista kasvua, maltillista osinkopolitiikkaa, kannattavaa liiketoimintaa sekä riskienhallintaa pitkällä aikavälillä. Pörssisijoittajien odotukset ovat yrityksen markkina-arvossa ja pikaisissa voitoissa.

Russian Enterprise Restructuring - the Effect of Privatisation and Market Liberalisation on the Performance of Large Enterprises

The fundamental question in the transitional economies of the former Eastern Europe and Soviet Union has been whether privatisation and market liberalisation have had an effect on the performance of former state-owned enterprises. This study examines the effect of privatisation, capital market discipline, price liberalisation and international price exposure on the restructuring of large Russian enterprises. The performance indicators are sales, profitability, labour productivity and stock market valuations. The results do not show performance differences between state-owned and privatised enterprises. On the other hand, the expansion of the de novo private sector has been strong. New enterprises have significantly higher sales growth, profitability and labour productivity. However, the results indicate a diminishing effect of ownership. The international stock market listing has a significant positive effect on profitability, while the effect of domestic stock market listing is insignificant. The international price exposure has a significant positive increasing effect on profitability and labour productivity. International enterprises have higher profitability only when operating on price liberalised markets, however. The main results of the study are strong evidence on the positive effects of international linkages on the enterprise restructuring and the higher than expected role of new enterprises in the Russian economy.

Use of innovative High Voltage components in GOST standard market

In Russian there are more than twenty thousand primary substations 35/110 kV and 10/110 kV. According to the Government Plan of Power Industry Development until 2020 year more than hundred new substations will e installed every year and even more renewed. The goal of this Thesis is to find out in this business environment what are the technology opportunities of prefabricated substation modules in new substation or in modernization of old substations in Russia.

Market orientation and performance in entrepreneurial SMEs

Market orientation is the organizational culture that creates the necessary behaviors for continuous additional value for customers and thus continuous superior performance for the business. The field of market orientation has been studied repeatedly during the past two decades. Yet research has concentrated on large firms in large domestic markets creating a need for diversifying research. The master’s thesis at hand examined the general incidence of market orientation among SMEs from five different industries as well as its consequences on SME performance. The empirical part of the thesis was conducted with a web-based survey that resulted in 255 responses. The data of the survey was analyzed by statistical analysis. The incidence of market orientation varied among dimensions and market orientation did not show any direct effect on firm performance. Customer orientation was the only dimension that showed a direct (positive) effect. On the contrary, moderating effects were found which indicate that the effect of market orientation in SMEs is influenced by other factors that should receive further attention. Also industry specific differences were discovered and should be further examined.

Mittausvirtoihin liittyvä standardointi- ja kooditusehdotus uusilla energiamarkkinoilla

Sähkömarkkinaosapuolet ovat havainneet lukuisia puutteita ja haasteita tietojärjestelmien tiedonvaihtoon liittyvissä kysymyksissä. Tässä työssä käsitellään tiedonvaihdon ongelmaa mittausvirtojen kannalta. Tiedonvaihdon lisääntyminen ja sanomien monipuolistuminen on johtanut siihen, että läheskään kaikki tarpeelliset sanomat eivät ole standardoitu, ja jo luoduissa tai ehdotetuissa standardeissa on huomattavia eroavaisuuksia mm. eri maiden välillä. Tässä työssä kuvataan nykyinen automaattisen mittarinlukujärjestelmän ja jakeluverkkoyhtiön mittaustietovaraston välinen tiedonvaihtoratkaisu ja siihen liittyvät mittaustietovirrat. Työssä esitellään myös älykkäiden mittarien tuomia hyötyjä ja pohditaan uusien mittausten tuomia mahdollisuuksia. Lisäksi pohditaan nykyisten tietovirtojen koodituskäytäntöjen toimivuutta ja niiden puutteita ja ongelmia. Työssä laaditaan esimerkki standardi mittausvirtakonfiguraation mallintamiseksi sähkömarkkinoilla. Työn painopiste on energiamittaustietojen tietovirroissa lähtien laskutuksen tarpeista. Tavoitteena on automaattisten mittarinhallintaprojektien tuomien älykkäiden mittarien uusien mittausten aiheuttaman ja mahdollistaman tietovirran standardointi. Työssä pohditaan, kuinka tietovirta saadaan eheästi siirtymään mittauspalveluntarjoajan ja jakeluverkkoyhtiön järjestelmien välillä sekä miten uudet tiedonkäyttötarpeet tulisi koodittaa. Uudet sanomastandardiehdotukset esitetään XML-mallein, ja lopuksi pohditaan mallien toimivuutta ja niihin tarvittavia jatkokehitystarpeita.

Time-varying Risk Premiums and Conditional Market Risk: Empirical Evidence from European Stock Markets

This study investigates the relationship between the time-varying risk premiums and conditional market risk in the stock markets of the ten member countries of Economy and Monetary Union. Second, it examines whether the conditional second moments change over time and are there asymmetric effects in the conditional covariance matrix. Third, it analyzes the possible effects of the chosen testing framework. Empirical analysis is conducted using asymmetric univariate and multivariate GARCH-in-mean models and assuming three different degrees of market integration. For a daily sample period from 1999 to 2007, the study shows that the time-varying market risk alone is not enough to explain the dynamics of risk premiums and indications are found that the market risk is detected only when its price is allowed to change over time. Also asymmetric effects in the conditional covariance matrix, which is found to be time-varying, are clearly present and should be recognized in empirical asset pricing analyses.

Modelling of North-West Russian market behavior considering technical restrictions of transmission grid

Nowadays the Finnish-Russian electric energy interaction is carried out through the back-to-back DC Vyborg substation and several power plants working synchronously with Finnish power system. Constant amount of energy flows in one direction — from Russia to Finland. But the process of electricity market development in Russian energy system makes the new possibilities of electrical cooperation available. The goal of master's thesis is to analyze the current state and possible evolution trends of North-West Russian system in relation with future possible change in power flow between Russia and Finland. The research is done by modelling the market of North-West Russia and examination of technical grid restrictions. The operational market models of North-West region of Russia for the years 2008 and 2015 were created during the research process. The description of prepared market models together with modelling results and their analysis are shown in the work. The description of power flow study process and results are also presented.

Quantitative market and sales forecast accuracy analysis

The main objective of this master’s thesis was to quantitatively study the reliability of market and sales forecasts of a certain company by measuring bias, precision and accuracy of these forecasts by comparing forecasts against actual values. Secondly, the differences of bias, precision and accuracy between markets were explained by various macroeconomic variables and market characteristics. Accuracy and precision of the forecasts seems to vary significantly depending on the market that is being forecasted, the variable that is being forecasted, the estimation period, the length of the estimated period, the forecast horizon and the granularity of the data. High inflation, low income level and high year-on-year market volatility seems to be related with higher annual market forecast uncertainty and high year-on-year sales volatility with higher sales forecast uncertainty. When quarterly market size is forecasted, correlation between macroeconomic variables and forecast errors reduces. Uncertainty of the sales forecasts cannot be explained with macroeconomic variables. Longer forecasts are more uncertain, shorter estimated period leads to higher uncertainty, and usually more recent market forecasts are less uncertain. Sales forecasts seem to be more uncertain than market forecasts, because they incorporate both market size and market share risks. When lead time is more than one year, forecast risk seems to grow as a function of root forecast horizon. When lead time is less than year, sequential error terms are typically correlated, and therefore forecast errors are trending or mean-reverting. The bias of forecasts seems to change in cycles, and therefore the future forecasts cannot be systematically adjusted with it. The MASE cannot be used to measure whether the forecast can anticipate year-on-year volatility. Instead, we constructed a new relative accuracy measure to cope with this particular situation.

Performance persistence of equity funds in the Russian stock market

This thesis investigates performance persistence among the equity funds investing in Russia during 2003-2007. Fund performance is measured using several methods including the Jensen alpha, the Fama-French 3- factor alpha, the Sharpe ratio and two of its variations. Moreover, we apply the Bayesian shrinkage estimation in performance measurement and evaluate its usefulness compared with the OLS 3-factor alphas. The pattern of performance persistence is analyzed using the Spearman rank correlation test, cross-sectional regression analysis and stacked return time series. Empirical results indicate that the Bayesian shrinkage estimates may provide better and more accurate estimates of fund performance compared with the OLS 3-factor alphas. Secondly, based on the results it seems that the degree of performance persistence is strongly related to length of the observation period. For the full sample period the results show strong signs of performance reversal whereas for the subperiod analysis the results indicate performance persistence during the most recent years.

Market Potential of Northwest Russia for Telemedicine Applications

The level of health care in Russia is mostly still below the western standards, but lately it has been developing quite positively. Many ICT solutions (telemedicine applications) have been developed for health care in Finland, but since the domestic market is so small, it’s necessary to expand to foreign markets to make the Finnish R&D projects more profitable. Telemedicine applications are not yet widely used in Russia, but since the health care system is going through fast changes, leapfrog effects can be expected and new modern applications and technologies will be implemented. This will open numerous business opportunities for Finnish technology developers. This thesis aims to be the first evaluation of the market and form an outlook of the health care system and telemedicine applications already utilized in Russia. The results of this study can be used for focusing further research ultimately aiming at technology implementation. The study showed that there is potential for many types of telemedicine solutions, e.g. electronic patient records and home monitoring systems; providing that further research in this field is needed.

Market Potential of Northwest Russia for Telemedicine Applications

The level of health care in Russia is mostly still below the western standards, but lately it has been developing quite positively. Many ICT solutions (telemedicine applications) have been developed for health care in Finland, but since the domestic market is so small, it’s necessary to expand to foreign markets to make the Finnish R&D projects more profitable. Telemedicine applications are not yet widely used in Russia, but since the health care system is going through fast changes, leapfrog effects can be expected and new modern applications and technologies will be implemented. This will open numerous business opportunities for Finnish technology developers. This thesis aims to be the first evaluation of the market and form an outlook of the health care system and telemedicine applications already utilized in Russia. The results of this study can be used for focusing further research ultimately aiming at technology implementation. The study showed that there is potential for many types of telemedicine solutions, e.g. electronic patient records and home monitoring systems; providing that further research in this field is needed.