The central purpose of the current paper is to identify the factors influencing the structure and business performance of the wood pellet business. To that end, this research is based on the empirical results coming from participation in actual problem-solving processes of a wood pellet firm. Ethnographic interviews helped identify the value chains and detailed business units of the wood pellet business. Also, the system dynamics technique was adopted to explore the cause-and-effect relationships among a variety of factors. First, it was found that the wood pellet business can be categorized into supply of raw materials, manufacture of pellet, global logistics and distribution/marketing. Each business unit is interdependent and mutually reciprocal. Second, the success of business depends on its ability to produce quality products, secure price competitiveness and steady supplies. In particular, it is required to systematically manage government policies and market information as well as the value chain of securing raw materials, manufacture competitiveness and logistics/marketing. Third, a set of 6 action plans are proposed for successful business performance: localization of backward integration, quality-based forward integration, stabilization of inline processes, strategic collaboration with logistics businesses, preemptive responses to government policies, and management of global information. The significance of the current research might be recognized in that it defined the essence of the wood pellet industry, identified the factors influencing business performance, and presented a set of practical actual plans to enhance business performance.