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Jabwood

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by

mariam soufi

on 11 December 2013

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Transcript of Jabwood

Problem identification
Jabwood is facing several problems:

Jabwood closed its subsidiaries in KSA and lost 50% of international revenues.
Risk of loosing Tanita exclusivity
Syrian conflicts impacted Lebanon's economy
Rigid managerial structure
Internal analysis
Current strategy
Jabwood has manu strategies:

Cash customers: only accepts cash deals
Closely monitors its clientele
The company sells only high volumes of timber
JABWOOD INTERNATIONAL
Jabwood carries large-scale timber operations of 400,000 CBM covering all the Middle East territories
PESTEL
Background
"touch wood, buy mood, from JABWOOD"
Recognized as one of the leading companies in the Arab World and among the top world timber trading companies World Wide.
Established in the 1930's
Family-run business
Value chain
Input/Raw material (strong)
Different suppliers
Exclusivity, due to it's scale advantage
Big bargaining power, due to it's healthy cash position
Processing (very strong)
Repackages products to meet customers need
Owns its own fleets

Output/sales (weak)
Increased competition
Only family members
Market saturation
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Strengths
Weaknesses
Opportunities
Threats
PORTER 5 FORCES
Threat of entrants
Threat of substitutes
Bargaining power of suppliers
Bargaining power of customers
Competition
Alternative #1
Expand to China
Alternative #2
Expand to KSA
Alternative #3
Expand to both: China+KSA
Alternative #4
Scope expansion
Recommendation
Conclusion
Jabwood has an established brand name in Lebanon
Large amount of regional networking
Vast knowledge of the wood industry
Very solid processing department
Good financial strength
The company relies on one supplier mainly: Tanita
rigid managerial structure which leaves no space for diversification
Scope expansion such as furniture department or kitchen cabinets
Ability to enter new markets due to Jabwood's indepth knowledge of the wood industry
Political situation in Lebanon threatens the whole wood industry in Lebanon
A high increase in new entrants
Lack of regulation and legal enforcements
High barriers to entry
High capital investment is needed to compete with Jabwood
Strong brand name
Higher developed technology is needed
LOW
High
Large number of substitutes such as: steel, Aluminum, and plastic
Low switching costs
Low
Large number of substitutes
Volume is critical to suppliers to reduce costs
High competition between suppliers
Low
Large number of customers
Limited information available fr customers
High demand of wood
Medium

Requires economies of scale to be able to make profits
Increased competition
Cost to exist in the market is almost normal
Political
High political instability in Lebanon
Rise of the revolution in the middle east
Economical
Rapid increase in globalization
Free trade between countries
Increased average household income percapita
Social
Different religions sects
different values
Technological
Rapid growth of technological methods
Better processing machinery/tools
Environmental

Increase awareness of green peace in the society
Wood industry is being closely watched
Legal
New regulations concerning cutting down trees
Increased taxes
PESTEL framework
PORTER's 5 forces
SWOT analysis
Exports
Joint venture
Move operations
PESTEL framework
SWOT analysis
PORTER's 5 forces
Exports
Joint venture
Move operations
Forward integration
Horizontal integration
Jabwood is faced with 3 decisions to make:

Whether to expand to China or KSA?
Which means of entry should they use to enter these markets?
Should it Horizontally integrate?
Jabwood should re-enter the Saudi arabian industry.
Exporting seems the best mean of entry
Jabwood should consider HORIZONTAL INTEGRATION simultaneously
Full transcript