Paper Example on Strategic Triumphs: Tavazo Brothers' Cost Leadership and Global Expansion

Case Study Questions

What is Tavazo's Brother’s Current Business-level Strategy?

Tavazo brothers use the cost leadership strategy, which entails ensuring that they are ahead in most of the activities within the market. Their company uses this tactic to ensure that they increase efficiency and reduce their production costs while maintaining relatively high sales and profit margins. Consequently, they have been able to gain the largest market share in nations such as Iran and Canada, where they are making significant efforts to penetrate. Cost leadership manifests itself when the company has managed to attract all the clients in Iran keen on getting premium nuts (Kurt & Zehir, 2016). High-quality manufacturing and good relationships with suppliers are something the entity has focused on over the years, enabling it to obtain the largest market share. Their strategic entry into Canada is also proof of using cost leadership as a business-level strategy. The same entailed maximizing the client base they had in the country. Cost leadership strategy has a direct impact on the quality of goods produced and the financial performance of the entity (Kurt & Zehir, 2016). Through this strategy, the Tavazo brothers have managed to attract specific segments of their respective markets.

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What Criteria did the Tavazo Brothers use to Decide on the Countries in which to Expand when they Originally Expanded Outside of Iran? Which Variable was most Important in their Decision Ranking?

The decision to expand a business requires a careful evaluation of the costs involved with the venture. The logistics may involve financial preparedness, analyzing government regulations, and the competition that an entity is likely to face after international expansion (Kurt & Zehir, 2016). The criteria that the Tavazo brothers are that they analyzed the global demand for pistachio products. Given that there was an increasing demand for one of their products in a country with no strict regulations, they stood a chance to excel. They made entry into Canada and also secured a position by purchasing warehouses for their imported products. They were able to minimize their storage and distribution costs in their new territory. Ideally, they used market demand, and the availability of trade barriers to assess how favorable the macroeconomic conditions in Canada were. In their assessment, the variable that was most important in decision ranking was the impact that their brand was making in the international markets (Richard Ivey School of Business, 2010). In their evaluation, their brand was viable and relevant since they were allowed to participate in trade fairs in Canada as they showcased the quality of their work.

What Alternatives are Available to Tavazo? Use a Decision Matrix to Evaluate the Options. What Would You Recommend?

Tavazo should exploit the current geographical markets and obtain a significant market share in Canada. This option would allow them to focus on the value chain as a wholesaler. The other option is for the company to explore other locations worldwide while relying little on the Iranian diaspora. The most recommendable option is for the business to remain in the Iranian and Canadian markets. According to the BCG Matrix, the stars of the company have allowed the firm to achieve a considerable market share in the market (Mohajan, 2017). Occupying Canada is allowing them to expand within the local market, and they should maintain it to ensure that they occupy the most considerable portion of the same. Therefore, their expansion should focus on maintaining consistency and enlarging their market share. They are also competing effectively with Bulk Barn and leveraging their ability to sell their nuts at a relatively lower but stable price (Richard Ivey School of Business, 2010). Hence, the company should focus on enlarging and maintaining its market share since it will form a base for continuous exports to any other nation it seeks to penetrate.

References

Kurt, A., & Zehir, C. (2016). The relationship between cost leadership strategy, total quality management applications, and financial performance. http://openaccess.dogus.edu.tr/xmlui/handle/11376/2454

Mohajan, H. (2017). An analysis of BCG Growth sharing matrix. https://mpra.ub.uni-muenchen.de/id/eprint/84237Richard Ivey School of Business. (2010). Tavaz Co. The Univesity of Western Ontario.