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This research will look into competitive advantages of the Croatian wood industry. The paper provides an explanation of potential sources of competitive advantages as well as positive and negative aspects of the selected generic strategies, followed by examples of companies using these strategies. The subject of the research encompasses characteristics, the area and the impact of competitive advantages on the company’s market position and business success. The aim of the paper is to define the term competitive advantage and to bring it into correlation with the wood industry. The methods used in the research include description, compilation and classification, and use of comparative and genetic method to interpret the phenomenon in its origin, i.e. in this case, a competitive advantage in its source, namely in costs or differentiation.

Hrvatske sume d.o.o. (limited liability company) is a state-owned enterprise for forest and woodland management in the Republic of Croatia. The area under its governance provides for annual increment of 9.6 million m3 of gross wood mass, whereas 5.4 million m3 is on a yearly basis. This cut wood mass needs to be transported to designated destinations. Wood mass transport has continuously increased, with 4.8 million m3 transported in 2013. Out of this quantity, the company Hrvatske šume d.o.o. transported 12.8% of wood mass using its own facilities, and the rest was transported by subcontractors. For these reasons, a transportation model can be an important part of operations. The paper aims to analyze transport-related issues in the company Hrvatske šume d.o.o. The insight into the current situation in wood mass transport will provide a basis for the proposed optimization of operations. Key factors of transport will be considered in devising an optimization proposal.

In the last eighteen years in Croatian wood-working industry, respectively wood protection industry, many good changes happened. In such a short period of time Croatian industry changed their “product philosophy”. After the fatherland war and acquisition of independence the most logs and sawn wood products have been exported from Croatia. With such “kind of philosophy” Croatian wood-working industry stopped in 2000 when Croatian Government decided to “force” producers (particularly small and medium sized saw mills and owners) to invest own money in kiln drying chambers. As the result of these economy measures, today Croatian firms mainly export semi-finished and finished wooden products. In spite of recession, which is everywhere recognised as the “bad thing”, at the top of the export list are parquet made from solid wood (or nowadays thermally modified wood), partly or completely kiln dried wooden elements for furniture and wood construction industry, solid wood furniture (cabinets, kitchen furniture), and smaller amount of joinery. The quality of those products mostly depends on the quality of protection and preservation. In the same time, knowledge on the wood protection and preservation arise, as among professionals and technicians in industry, as among scientist and researchers at the Forestry Faculty. The use of new technologies (such is modification methods) and new preservatives is greater than was twenty years ago. We hope that the new equipment in new wood preservation laboratories will encourage further research not only scientifically but even more for Croatian wood industry.