Questions:

1. Does the entry mode suggested in the article help Wooden Bakery mitigate risk factors in your CAGE analysis?

2. Does the entry mode and strategy help Wooden bakery defend its VRIO?

Wooden Bakery started in Lebanon in the early 1970s as a small traditional bakery and, over the course of four decades, went on to become one of the leading companies in the industry. Bou Habib could clearly see further growth opportunities in Lebanon and the Arabian Gulf, where cultural differences were insignificant and resources were readily available. In early 2015, in the companys busy headquarters, which were situated 10 kilometres north of Beirut, the board of directors had to meet and vote on a major strategic decision that would determine Wooden Bakerys future success or failure. How should Wooden Bakery implement its growth strategy and secure and allocate the required resources? In 2015, 16 years after its introduction, this location remained the most successful among Wooden Bakerys 32 branches. How should Wooden Bakery go about entering the U. The management of Wooden Bakery believed that capturing 7 to 10 per cent of the pita bread market in Chicago would be sufficient to break even, while anticipating that revenues from pita bread would constitute only 10 to 15 per cent of the companys total revenues. To that end, in the late 1970s, Bou Habib initiated the cooperation of a Lebanese bakery-equipment manufacturer called Saltek, and this partnership ultimately paid off. To sustain its rapid growth, Wooden Bakery also underwent a major restructuring and reorganizing process. Through his early insight, and taking action accordingly, Bou Habib managed to significantly increase Wooden Bakerys production capacity , and the consistency of the quality was secured. The new concept was immensely successful and went beyond all expectations, with the new bakeryconvenience store gradually evolving into Wooden Bakerys flagship store. Chains like Panera Bread, Marianos, and Corner Bakery Cafe would no doubt be among the potential competitors. This state-ofthe-art factory processed 60 to 70 metric tons of flour per day and operated on three shifts a day. Its stronghold was the Kesrwen district in the Mount Lebanon governorate, which was Wooden Bakerys stronghold as well. Its competitive strength was in the production of French bread, sweets, and pastries. Pain DOr produced a wide range of products , had a catering department, and operated 18 branches spread across Lebanon. THE COMPETITION Aside from Wooden Bakery, a few other bakeries had also grown and become strongholds across different parts of the country, particularly the Chamsine Bakery, Moulin DOr, and Pain DOr. Franchising and a New Factory In 2002, three years after the introduction of the first retail store, Wooden Bakery launched its first franchised operation in Lebanon, and two other franchised stores opened in 2003. In 2007, to support its aggressive growth strategy, Wooden Bakery opened a large, central factory in Antelias, a northern suburb of Beirut, just a few kilometres away from the flagship store. But was he? As Bou Habib contemplated the various options for Wooden Bakerys future, he was fully cognizant that the family-owned company had managed over the span of a few decades not only to become a leading bakery chain, a powerful brand, and a fast-growing company in Lebanon and the surrounding region but also a professionally managed company with sound corporate governance and a competent management team. Frustrated with the inefficiencies in production and the long hours of hard work from 3 a. , Bou Habib soon realized that automation of the production process was the only way to grow his business. Since that time, Wooden Bakery had been pursuing an aggressive growth strategy by opening, on average, two or three franchised branches per year. The company had built a new factory in the Halat area to strengthen its competitive position in the governorates of North Lebanon and Mount Lebanon. In 1980, the first automated pita bread production-line equipment was ready for use, and the first unit was reserved for Wooden Bakery. He wanted to buy it way before it was produced. Just a few months later, thanks to Saltek, Wooden Bakery ushered in a new era of bread-making. A second area-development agreement was signed in early 2015 with KAF GroupUAE. Situated on a main highway with a heavy traffic flow linking Beirut to the northern residential suburbs and north Lebanon, Wooden Bakery targeted and attracted people crossing this busy thoroughfare, whether on their way to or back home from work. For example, Wooden Bakerys stronghold was the Mount Lebanon governorate, where 25 of its 32 branches were located, while one of its main competitors, Chamsine, had a stronger presence in South Lebanon and the Beqaa Valley, two other large governorates. However, the decision-makers were well aware that a No vote would imply narrowing the horizons of Wooden Bakerys growth opportunities to Lebanon and the region, while a Yes vote would mark the beginning of a new era and possibly the start of a metaphorical roller coaster ride, with the accompanying apprehensions and exhilaration. The related development was intended to cover the Riyadh area, and the development rights were initially granted for a period of 10 years, renewable for another 10 years after that. The company owned the real estate, and the store offered easily accessible parking space, which accommodated 3,000 cars per day. The factory also housed a central kitchen that supplied products to all the branches. In fact, the 20142015 monthly surge in bread production and consumption was gauged through the 17,000 metric tons of flour used by the industry. In 2015, six years after signing the first area-development agreement, Wooden Bakery had established a strong presence in the Riyadh area, with six franchised branches supported by a central factory. Almost half the population lived in the capital city of Beirut and in its immediate suburbs, which were part of the Mount Lebanon governorate. Chamsine Bakery was owned by the El Kaderi family and was the largest traditional pita bread producer in Lebanon . By 2015, Wooden Bakery had grown significantly, mobilizing 750 employees, a sales and distribution team of 60 employees, and a fleet of 100 vehicles and operating 32 branches scattered across Lebanon . Its primary focus concerned the production of traditional pita bread and kaak, which constituted the primary source of Chamsine Bakerys competitive advantage, unlike its competitors, who had more-diversified product offerings.