Businessmodel of Weyerhaeuser

Customer Segments

Weyerhaeuser provides a broad range of products and services that target commercial and industrial customers across multiple business sectors. These customers can be organised broadly into the following categories:

• Construction and Property Development, including various contracting, specialist construction, and real estate and property development companies – including residential, multi-family, industrial and light commercial operators – to which the Company provides lumber, wood products, structural panels, and other specialty products:
• Retail, including wood products dealers, and do-it-yourself retailers to which the Company sells various wood products;
• Consumer Goods, including producers of consumer items such as sanitary disposable products, food, and beverages, as well as specialist packaging companies, to which the Company provides absorbent products, and specialist packaging products; and
• Industrial and Manufacturing, including producers of paper and pulp, textile manufacturers, oil and gas companies, and energy companies to which the Company provides oils, gases, cellulose fibers, and other products. Weyerhaeuser primarily serves customers across the US and Canada. It is also a significant exporter of products, serving customers across Asia and Europe, in particular customers in Japan and China.

Value Propositions

Weyerhaeuser provides value to its customers in the following ways:

• Its industry standing and reputation, with the Company established as leading operators in its field, having a track record for providing high-quality products reliably and efficiently;
• Its broad portfolio of products, with the Company offering a broad range of products – including lumber, wood products, cellulose fibers, and packaging products – to customers across a diverse range of industries;
• Its development of innovative solutions, with the Company dedicating a portion of its funds to the development of innovative processes and solutions that allow it to serve customers quickly and effectively;
• Its international sales reach, with the Company serving an extensive customer base across the US and Canada, as well as exporting products to customers in Europe and Asia, particularly China and Japan; and
• Its commitment to sustainability, with the Company committed to developing and utilising sustainable and environmentally friendly processes. ### Channels

Weyerhaeuser operates a website at www.weyerhaeuser.com, through which it provides information on its products, services, target industries, and operating locations. The Company does not, however, operate an online sales channel, nor does it provide an online customer portal trough which customers can manage transactions and orders.

Weyerhaeuser makes sales to its clients through an in-house direct sales organisation, which deals directly with the Company’s clients. This sales force is organised by business segment and by geographic region, with the Company’s sales personnel operating out of an international network of dedicated sales and liaison offices across the US, as well as in Japan, South Korea, Brazil, Uruguay, Ireland, and France.

Weyerhaeuser operates its own network of manufacturing facilities and lumber mills across the US and Canada, as well as a facility in Poland. This infrastructure is supported by the Company’s in-house network of distribution centres and facilities.

Customer Relationships

Despite its online presence, Weyerhaeuser does not offer any of its products and services to customers on a self-service basis. The Company’s in-house sales personnel deal directly with clients, agreeing the details of individual sales and distribution contracts on a case-by-case basis. The Company seeks to establish longstanding relationships with its commercial clients, with a view too securing recurring business.

Weyerhaeuser has relationships and account management teams that are able to provide ongoing support to its larger clients. Customers can also make more general enquiries with the Company over the phone or via an online contact form, and receive personalised responses to queries and complaints. The Company also provides technical support resources to its customers, including product information, installation guides, and news articles.

Additionally, Weyerhaeuser operates social media accounts with Facebook, LinkedIn, and Twitter, through which it is able to update clients with company development and interact with customers directly.

Key Activities

Weyerhaeuser operates as a real estate investment trust, and an owner of timberlands. The Company is principally engaged in the growing and harvesting of timber, as well as the manufacture, distribution, and sale of products made from trees.

Weyerhaeuser aligns its operations into three reportable business segments: Timberlands, which produces logs, timberland, timber, minerals, oil and gas, and other products, as well as plywood and hardwood lumber; Wood Products, produces and sells structural lumber, engineered wood products, structural panels and complimentary building products; and Cellulose Fibers, which produces pulp and liquid packaging board.

The Company owns approximately seven million acres of timberlands, primarily in the US, and manages additional timberlands under long-term licenses in Canada. It serves an international customer base, spanning multiple industries, including the oil and gas, the construction and development, energy, and manufacturing sectors.

Key Partners

Weyerhaeuser works in conjunction with various companies and organisations in the manufacture, sale, and distribution of its products. These partners can be organised into the following categories:

• Supplier and Vendor Partners, including suppliers of materials, tools, and equipment used in the Company’s manufacturing and milling operations, as well as suppliers of services and technologies that are utilised across the enterprise more broadly;
• Joint Venture Partners, including manufacturing and timber companies with which the Company jointly manufactures and sells products around the world, through mutually owned entities;
• Community and Sustainability Partners, comprising various non-profits and charitable organisations, with which the Company collaborates on various community and sustainability projects at home and abroad; and
• Strategic and Alliance Partners, including market leading companies across multiple industries, with which the Company collaborates on various marketing and alliance projects. Weyerhaeuser has a number of partnership in place. This includes a sustainability partnership with World Vision, a joint venture with Nippon Paper Industries that produces primarily high- brightness publication papers and newsprint, and a community partnership with United Way of the Coastal Empire.

Key Resources

Weyerhaeuser’s key resources are its intellectual properties, its equipment and materials, its supply chain, its manufacturing and milling facilities, its sales and distribution operations, its partnerships, and its personnel.

Weyerhaeuser owns and or leases a number of properties that are key to its operations, this includes its network of sales and liaison offices, as well as its various manufacturing facilities and wood mills, including in the US, Canada, and Poland.

Weyerhaeuser also owns and licenses a number of patents and trademarks which are important in its manufacturing and delivery of products. Searches of records published by the US Patent and Trademark Office identified a number of patent applications filed in the name of Weyerhaeuser, including applications entitled ‘Modified fiber, methods, and systems’, ‘System and method for differentiating type of vegetation from remotely sensed data’ and ‘Sorting green lumber’.

Cost Structure

Weyerhaeuser incurs costs in relation to the development of its solutions and processes, the procurement of supplies and materials, the operation of its manufacturing facilities and wood mills, the implementation of marketing campaigns, the operation of its sales and distribution infrastructure, the management of its partnerships, and the retention of its personnel.

In its 2015 annual report, Weyerhaeuser recorded total selling expenses in the amount of $113 million, and general and administrative expenses totalling 289 million. The Company recorded research and development costs totalling $24 million.

Revenue Streams

Weyerhaeuser generates revenue through the production and sale of lumber, wood products, and cellulose fibers to companies across multiple industries. The Company’s products include softwood lumber, cellulose fibers, engineered wood products, structural panels and other specialty products.

In 2015 Weyerhaeuser recorded total net sales across its three operating segments in the amount of $7.2 billion, down slightly on the $7.4 billion recorded by the Company in 2014. The Company’s largest revenue generator was its Wood Products segment, which recorded net sales for the year of $3.9 billion. The Company’s Timberlands and Cellulose Fibers segments recorded annual net sales of $1.4 billion and 1.9 billion.