1-What motivated Chami to expand Chabros’s operations internationally? What strategy did he follow: International, Multinational, global, or transnational?
Big motivational factor regarding the business expansions was to become the global player in the worldwide wood industry. Due to decline in sales in Lebanon and Dubai due to economic crises, the firm identified its potential and capacity and decided to expand the business. The economic condition of the country was unstable, which increased the threats to the business of this wood giant. Interestingly, that was a big chance for the management to emerge in both, wood and veneer industry, and it seemed another motivational factor. Chabros’s contained the global strategy, as it intended to expand the business in Dubai, Saudi Arabia, and suppliers from different countries such as the United States, China, and Ghana (P4, Para 4).
2-What were strategic options available to Chabros to overcome the financial crises? Which strategy option would you recommend? Why?
A 30 % decline in sales in Dubai was a big financial crisis for the company. Additionally, the management decided to invest $11 million in buying the sawmill and increasing the capacity (P 7, Para 4). It hit badly in the 2008 economic crises, and it was also converted into the 2009 financial crises. There were different options for Chabros to overcome this problem. For Instance, the first option was to reduce the capacity of the mill. Reducing the number of employees could help the company save$400, 000. Other options were market penetration and diversification strategies (P 7, Para 6). It was an expansion in countries such Morocco to boost the sales and increase the revenues. I would like to recommend the reduction in the capacity of the mill. It could recover the cost of the crisis; it seemed a good strategy to make further decisions such as expansions and development.
3-If you decide to follow a market development growth strategy, into which new country would you expand? Rank the candidate countries. Explain how you derived your ranking?
If I decide to follow a market development growth strategy, I prefer Egypt. Ranking of different countries for this strategic choice is Egypt, Saudi Arabia, and Serbia respectively. The big reason for this country selection is the market, as there is a demand for lumber, veneer. The management can expect the immense sales in this market due to the high demand and moderate competitive rivalry. Egypt comes on top, and I derived this ranking due to the demand for thin slices of woods. Second, several competitors are working in Saudi Arabia, which also creates business growth risks. Serbia ranked last because intentions are towards the export (P 10).
4-If you decide to follow a market penetration growth strategy, which country, where chabros is already present, would you further penetrate?
Regarding the market penetration, growth strategy, Chabros must have to penetrate the United Arab Emirates. Obviously, the big measure of the company is the sales growth through the specific wood products. Chabros is already present here; it seems right decisions to collaborate with the Italian suppliers to integrate with the local culture (P 2, Para 2). The market penetration in Saudi Arabia is triggered by the cultural integrations, which can help to sell high-quality wood products in different industries. As far as the market share and financial crisis are concerned, the sale of existing products can help the company increase the market share. For Instance, according to the ranking, provided in the case, Dubai ranked first due to its sales, and it can also justify the market penetration strategy (P3, para 5).
5-Would Morocco be a good country to expand into?
Morocco is a good country to expand the business for this company due to the demand for lumber and veneer. However, it is necessary for this company to conduct the SWOT analysis to derive strengths, weakness, opportunities, and threats. Of course, there is a need for a perfect marketing intelligence and financial estimates to initiate the business in this particular market (P 8, Para 1). In Morocco, the biggest strength of the company can be the customers which can lead towards the reasonable sales and market share. Visibly, the company has potential, and through an appropriate market and financial analysis, the management can make the difference. Chabros, being a prominent wooden giant has to design the course of actions, and Morocco should be the main preference.
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