Business Development: Strategic Analysis of Tavazo Case Study

This case study analyzes the expansion strategy of Tavazo, a dry-fruit company, focusing on its potential entry into the Canadian, US, and Dubai markets. The analysis includes the factors considered in selecting these cities, such as ease of doing business and the presence of target demographics. T...Read More

Strategic Analysis
Strategic Analysis: Tazo Case Study
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Strategic Analysis
Table of Contents
Tavazo Expansion Strategy.....................................................................................................3
Criteria to Evaluate Expansion..............................................................................................3
Expansion Strategy..................................................................................................................4
References.................................................................................................................................5

Strategic Analysis
Tavazo Expansion Strategy
After Tavazo reached a certain height and popularity in Iran, it was obvious for the company
to expand and vertically integrate itself to make more profit and further sustain itself. hence,
the company finally started growing, manufacturing and exporting a lot of their products to
ensure that they never run out of business if one of the segments take a hit. Because of its
reputation and success in the dry-fruit industry, it soon became a trusted brand. Hence, the
three brothers owing Tavazo finally decided to expand starting with Canada, USA and Dubai.
Specifically, the cities of Dubai, Los Angeles and Vancouver. These cities were chosen based
on their ease of doing business and the population which will be likely to have their products
(1). Now since these countries have a good enough population of Muslims, who will require
their products during the holy month of Ramadan and Parsis to require these nuts and
condiments during their festival, this market was the best possible market for Tavazo to have
entered in. the geographical locations of these places too played a major role in the fact that
they were being considered for the new location of the stores. The important variables to be
considered during this decision is making the cost they will incur on the rent, salary, labour
cost and most importantly the taxes and the export duties as well. these costs will
significantly decide the costs of the products to be sold here, and eventually the market as
well.
Criteria to Evaluate Expansion
The best two strategic analysis that can be used are the PEST analysis and the Porter’s Five
forces.
PEST
Political: Tavazo has to consider the policies of the three countries it is considering to expand
to and the business support policies they have
Economic: Tavazo has to look if the countries it is expanding are economic and feasible via
FOREX, taxes and the import rates it will have to pay
Social: the most important thing is the desired social market for the company and if the goods
that are being sold by Tavazo will be culturally acceptable and required or not

Strategic Analysis
Technological: Tavazo has to focus on maintaining a good MIS system and a technological
aided quality check system for all its goods, along with solutions to maximise its efficiency
Porter’s Five Forces
The next strategic analysis tool is the Porter’s five forces. This will tell us if the external
environment of Tavazo is well functioning in the new countries or not.
 Bargaining power of suppliers: here, Tavazo has the upper hand since it is already
into production and manufacturing of its own goods
 Bargaining power of customers: these three countries are culturally quite diverse and
so is the consumer behaviour. it is expected that Tavazo will find a little difficult to
manage the customer expectation.
 Threat of new entrants: this is going to be always there considering there are a lot of
business models such as that of Tavazo
 Threat of substitution: this will be tough provided Tavazo maintains its quality service
throughout and add to it the branding it does for itself
 Competition: there are already many local players in these countries hence, Tavazo
will have to work hard in the first year to make its place
SWOT Analysis
Strength:
 the biggest strength of the Tavazo is
its brand value, brand equity
 the quality of the product that it
provides in an affordable range.
 An exceptionally well-functioning
team
 Product range
Weakness:
 has a lack of knowledge for the
expansion that it is aiming
 the lack of flexibility in work culture
and organization approach
Opportunity:
 collaboration/ventures with
companies such as TESCO and
Threats:
 the trade barriers imposed by the
wester nation will be a huge threat in

Strategic Analysis
Walmart to ensure that it can start
somewhere and then move in full
time to the countries
 Month of Ramadan will be ideal to
start the venture at an initial level in
these countries
this matter
 competitors are constantly working
hard to diversify their offerings
The SWOT analysis has explained quite clearly how Tavazo has to work hard to ensure that it
is able to expand well in the foreign market it is planning to.
Expansion Strategy
The best expansion strategy for Tavazo for expanding into these countries can be as that of a
Foreign Direct Investment. This type of expansion strategy serves the best considering the
nature of the political situation in all these countries. While Tavazo has a pretty good
financial state for now, and FDI will further help it since they will not get some tax
exemption in the initial years, but there are chances that few countries can even extend it the
special status for some time (3). Furthermore, as an obligation under the FDI arrangement,
the company will have to hire the people from the country. This can be advantageous to the
company considering the fact that this will help them find good and cheap labour in a foreign
land as well. Furthermore, FDIs do not have much intrusion from the government and enjoy a
relatively independent way of working
The company can also enter these markets in a joint venture as well. The company with
whom they will enter the joint venture will be responsible for all major investments such as
infrastructure and marketing. This will help the organization in having a good head start
ahead and will also help the organization in managing its finances as well (4)
References

Strategic Analysis
1. Gabrielsson P, Gabrielsson M, Seppälä T. Marketing Strategies for Foreign
Expansion of Companies Originating in Small and Open Economies: The
Consequences of Strategic Fit and Performance. Journal of International Marketing.
2012;20(2):25-48.
2. Myler L. Market Segmentation: Sell More By Selling To Fewer [Internet].
Forbes.com. 2019 [cited 3 June 2019]. Available from:
https://www.forbes.com/sites/larrymyler/2016/01/19/market-segmentation-sell-more-
by-selling-to-fewer/
3. Iamsiraroj S. The foreign direct investment–economic growth nexus. International
Review of Economics & Finance. 2016;42:116-133.
4. Suttle R. Growth Strategies in Business [Internet]. Smallbusiness.chron.com. 2019
[cited 3 June 2019]. Available from: https://smallbusiness.chron.com/growth-
strategies-business-4510.html