Jabwood International

878 words 4 pages
Mesaab Ismail
International Management 3680
9/22/14

Problem Statement
Jabwood International is contemplating international expansion into new markets specifically, Saudi Arabia and China to compensate for a decline in revenues.
Problem Causes

The Middle Eastern situation, specifically the uprising in Syria.

The borders between Lebanon and Syria being closed causing the company’s main wood supplier TANITA to expand to other timber companies.

Jabwood’s market share and sales volume had a drop of 20 %.

Jabwood does not have any business in Saudi Arabia which has the Biggest Market in the Middle East for wood products.

Jabwood does not have any business in China which the potential for wood products have increased every year due to the
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No exclusivity to sell TANITA products in China.
Establishing a representative office in a foreign country in $60,000.
The Chinese wood market is known to have stringent requirements with regard to wood sizes and quality.
The Communist laws in China might lead to issues in business practices.
Staff must know Chinese regulations and speak Chinese to have an easier time trying to cope with the strict business administrative procedures.
Chinese people are afraid that houses made of wood are prone to natural disasters.
Decision
Jabwood International should make the decision to re-establish its connections in Saudi-Arabia and began working there immediately.
Justification
Even though the Market in China is more in demand since there are 13 billion people. There are much more cons to expand there than there would be in Saudi-Arabia.
Also expanding in China would be very risky, since Jabwood International never did any type of business there before.
Jabwood International has experience in Saudi-Arabia and they made about 50% of their sales when they did do business there, which justifies why they should return there.
Action Steps
Fayez Jabado should conduct a meeting with Imad and Mahmoud Jabado since they are familiar with the Saudi market and begin plans to expand out there as soon as possible.
Adnan Jabado should be head leader or in charge of the operations in Saudi-Arabia since he has

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