Case Study: Jabwood

1172 Words5 Pages
This project deals with the reality of Jabwood – a wood trading company, based in Lebanon that has four branches in Middle East countries adjacent to the first one. The company faces a difficult situation as TANITA – its main wood supplier and a reference brand on the market – has just announced its decision to work with other Middle East firms. This immediately takes away the advantage of Jabwood as being its exclusive importer and results on the former deciding it is time to expand. The choices it has to consider are China and Saudi Arabia – it could expand to one of them only, both of them or even decide none of them is a good choice. That decision requires a proper analysis of the markets.
Analysing the markets Jabwood would potentially expand to there are factors that need to be taken into account. The group examines China and Saudi Arabia through the prism of two theories: the International Investment Theory and the Transaction Costs Theory; and focuses on the most important factors the company has to watch out for - availability of cheap: capital, natural resources, and labour & knowledge of
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Using the analysis of specific country & company advantages and disadvantages for these factors also helps to draw a conclusion on the better choice of a market to enter.
In China the company has the advantage of the product itself being made according to the Chinese standards for quality, however, the big challenge is facing liabilities of foreignness and outsidership.
In Saudi Arabia the advantage is that the language and culture are familiar to the firm as well as the close relationship Jabwood has with its customers. Nevertheless, there is the disadvantage of the firm having to compete with many big local companies along with the numerous international ones constantly coming to the market’s

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