Introduction

Jabwood International was established in the early 1930s near the Beirut Harbor which deals with timber trading. The company is a family owned business and was founded by Mahmoud Jabado. The company started as a seller of small wood retail planks and sold around 4,000 CBM of wood to clients residing within a radius of 10-km near the harbor. With the passage of time, the company became a huge success and transformed itselfinto a matured multi-division which now deals in exporting of lumber to Middle East Asian countries such as Saudi Arabia, Jordan, Iraq and few others.

In the year 2012, the company was handed over to Mahmoud Jabado’s son Fayez who along with his siblings ran the operations of the company. Other than providing awide range of lumber such as hardwood, softwood, and wood-based panel, it also offered other timber-related services such as panel sizing, thermal pressing, milling and few others. Jabwood International Timber Company headquarterswereestablished in Tripoli and havearound 3 branches which were established in Choueifat, Sin El Fil, and Chiyah. Although having several branches, it primarily deals from Lebanon for supplying wood to other Middle Eastern countries.
Jabwood International The Risky Business Of Expanding East Harvard Case Solution & Analysis

Jabwood International became the biggest timber trading company in Lebanon and hugely contributed to the country’s economy. The vision of the company was to become the largest supplier in the Middle Eastern countries and a recognizable brand in the Middle East. In the year 2009, after the financial crises, the company took a huge blow as its profits started to decline due to low purchases of wood from other countries. Other than this, another issue arose when the boards of Lebanon and Syria were closed and this impacted on the company’s main wood product TANITA. This caused the rejection of the rights to sell TANITA to other timber trading companies. TANITA was a softwood which was imported primarily from Russia and was used for the construction of houses and making furniture.

For bringing the company back to its profitable state, the owner of Jabwood Fayez immediately called his son and his brother for immediate action. After a brief discussion among the family members, the company came to a conclusion that it could expand its international market by either selling to China or penetrate back intothe Saudi Arabia market or target both these countries. Both of these countries had their pros and cons, and there wasdifficulty for the owner in making the appropriate decision.

Key Milestones since the start of its internalization

1930: Mahmoud Jabado who founded Jabwood and started as small wood planks retail shop.

1940-80: The Company grew from 4000 CPM to 400,000 CPM

1990-2004: The Company expanded its distribution channels in Middle Eastern countries and significantly enhancedits growth.

2007: Jabwood International left Saudi Arabia and closed its exporting of wood

2009: Company had around 100 sales and the revenues had exceeded $50 million

2010: The Company had been experiencing adecline in its growth due to increase in bargaining power of buyers.

2012: The Company added a wide range of wood services in its portfolios such as milling, thermal, panel sizing and others...............................

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