Jabwood International: The Risky Business of Expanding East SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Jabwood International: The Risky Business of Expanding East
Jabwood, a wood trading company with four branches in Lebanon owned by the Jabado family, is contemplating international expansion into new markets - specifically, Saudi Arabia and China - to compensate for a decline in revenues. This case examines the macroeconomic environment of Lebanon, China and Saudi Arabia as well as the wood industry in those countries. The characteristics of a successful international expansion are considered. In addition to identifying the criteria of attractiveness for each country, the case requires a decision on a market entry strategy that would ensure a successful expansion for the company. Given the risks and tradeoffs in each country, Jabwood has to decide whether it should expand in either market or both and on the mode of entry it should adopt to increase its chances of success.
Swot Analysis of "Jabwood International: The Risky Business of Expanding East" written by Marina Apaydin, Rami Jabado, Hiba Obeid, Balsam Danhash includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Jabwood Lebanon facing as an external strategic factors. Some of the topics covered in Jabwood International: The Risky Business of Expanding East case study are - Strategic Management Strategies, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Jabwood International: The Risky Business of Expanding East casestudy better are - – increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, technology disruption, supply chains are disrupted by pandemic , geopolitical disruptions, cloud computing is disrupting traditional business models,
challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Jabwood International: The Risky Business of Expanding East
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Jabwood International: The Risky Business of Expanding East case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Jabwood Lebanon, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Jabwood Lebanon operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Jabwood International: The Risky Business of Expanding East can be done for the following purposes –
1. Strategic planning using facts provided in Jabwood International: The Risky Business of Expanding East case study
2. Improving business portfolio management of Jabwood Lebanon
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Jabwood Lebanon
Strengths Jabwood International: The Risky Business of Expanding East | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Jabwood Lebanon in Jabwood International: The Risky Business of Expanding East Harvard Business Review case study are -
Effective Research and Development (R&D)
– Jabwood Lebanon has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Jabwood International: The Risky Business of Expanding East - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Strategy & Execution industry
– Jabwood International: The Risky Business of Expanding East firm has clearly differentiated products in the market place. This has enabled Jabwood Lebanon to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Jabwood Lebanon to invest into research and development (R&D) and innovation.
Training and development
– Jabwood Lebanon has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Jabwood International: The Risky Business of Expanding East Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Successful track record of launching new products
– Jabwood Lebanon has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Jabwood Lebanon has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Operational resilience
– The operational resilience strategy in the Jabwood International: The Risky Business of Expanding East Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
High brand equity
– Jabwood Lebanon has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Jabwood Lebanon to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Jabwood Lebanon is one of the most innovative firm in sector. Manager in Jabwood International: The Risky Business of Expanding East Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Jabwood Lebanon is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Jabwood Lebanon is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Jabwood International: The Risky Business of Expanding East Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Strategy & Execution field
– Jabwood Lebanon is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Jabwood Lebanon in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Jabwood Lebanon is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Marina Apaydin, Rami Jabado, Hiba Obeid, Balsam Danhash can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Low bargaining power of suppliers
– Suppliers of Jabwood Lebanon in the sector have low bargaining power. Jabwood International: The Risky Business of Expanding East has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Jabwood Lebanon to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Jabwood Lebanon has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Weaknesses Jabwood International: The Risky Business of Expanding East | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Jabwood International: The Risky Business of Expanding East are -
Need for greater diversity
– Jabwood Lebanon has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Jabwood Lebanon is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Jabwood International: The Risky Business of Expanding East can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High cash cycle compare to competitors
Jabwood Lebanon has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Interest costs
– Compare to the competition, Jabwood Lebanon has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High bargaining power of channel partners
– Because of the regulatory requirements, Marina Apaydin, Rami Jabado, Hiba Obeid, Balsam Danhash suggests that, Jabwood Lebanon is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Skills based hiring
– The stress on hiring functional specialists at Jabwood Lebanon has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Lack of clear differentiation of Jabwood Lebanon products
– To increase the profitability and margins on the products, Jabwood Lebanon needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As Jabwood International: The Risky Business of Expanding East HBR case study mentions - Jabwood Lebanon takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Slow decision making process
– As mentioned earlier in the report, Jabwood Lebanon has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Jabwood Lebanon even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Jabwood International: The Risky Business of Expanding East, is just above the industry average. Jabwood Lebanon needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Capital Spending Reduction
– Even during the low interest decade, Jabwood Lebanon has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Opportunities Jabwood International: The Risky Business of Expanding East | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Jabwood International: The Risky Business of Expanding East are -
Using analytics as competitive advantage
– Jabwood Lebanon has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Jabwood International: The Risky Business of Expanding East - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Jabwood Lebanon to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Jabwood Lebanon can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Leveraging digital technologies
– Jabwood Lebanon can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Developing new processes and practices
– Jabwood Lebanon can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Buying journey improvements
– Jabwood Lebanon can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Jabwood International: The Risky Business of Expanding East suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Jabwood Lebanon can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Jabwood Lebanon can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Creating value in data economy
– The success of analytics program of Jabwood Lebanon has opened avenues for new revenue streams for the organization in the industry. This can help Jabwood Lebanon to build a more holistic ecosystem as suggested in the Jabwood International: The Risky Business of Expanding East case study. Jabwood Lebanon can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Jabwood Lebanon to increase its market reach. Jabwood Lebanon will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Jabwood Lebanon can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Jabwood Lebanon can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Jabwood Lebanon to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Low interest rates
– Even though inflation is raising its head in most developed economies, Jabwood Lebanon can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Jabwood Lebanon in the consumer business. Now Jabwood Lebanon can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Jabwood International: The Risky Business of Expanding East External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Jabwood International: The Risky Business of Expanding East are -
Shortening product life cycle
– it is one of the major threat that Jabwood Lebanon is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Jabwood Lebanon with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Jabwood Lebanon in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Environmental challenges
– Jabwood Lebanon needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Jabwood Lebanon can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Jabwood Lebanon can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Jabwood Lebanon high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Jabwood Lebanon.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Jabwood Lebanon will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Increasing wage structure of Jabwood Lebanon
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Jabwood Lebanon.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Jabwood International: The Risky Business of Expanding East, Jabwood Lebanon may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Jabwood Lebanon in the Strategy & Execution sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Jabwood International: The Risky Business of Expanding East Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Jabwood International: The Risky Business of Expanding East needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Jabwood International: The Risky Business of Expanding East is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Jabwood International: The Risky Business of Expanding East is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Jabwood International: The Risky Business of Expanding East is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Jabwood Lebanon needs to make to build a sustainable competitive advantage.
