THIS IS A STRATEGIC MANAGEMENT QUESTION

Please assume you were a consultant to the organization's leadership team, and advise what they should do. Specifically, please identify the most important strategic issue/decision facing the organization, develop and assess your alternatives, make a recommendation, and develop an action plan for the leadership team.

ALSO,

please provide your six most important insights from your Diamond-E assessment of the organization's current strategy.

ECP001612_pcu (3).pdf X C O File | C:/Users/User/Downloads/ECP001612_pai%20(3).pdf O r Update E ECP001612_pcu (3).pdf 95 / 171 70% + Page 2 9B 10M093 Page 3 9B 10M093 business his father had years ago. After Iran's 1979 revolution, the two younger sons came back from Italy, Iran's diverse climate and agricultural lands made it a source of high-quality agricultural products which where they had completed their higher education. The unstable institutional environment and unfavourable shaped a significant pillar of the Tavazo business in Iran and later in international markets. Iran was the job market in Iran led them to decide to continue their father's business, despite the fact it was unrelated to largest producer of pistachios in the world followed by the United States, Turkey, Syria, and China (see their education. Exhibit 2). Pistachios were a major contributor to Tavazo's sales, accounting for about 20 per cent of total sales. Other nuts and fruits for which Iran had a substantive worldwide market share were berries, apricots, dates, cherries, apples, figs, almonds, and walnuts. Exhibit 3 illustrates Iran's worldwide rank in the THE CURRENT SITUATION production of select fruits and nuts 1 5/912028 1/9480920823/31/2022 By 2010, the family business was vertically integrated as grower, manufacturer, retailer and exporter. The current mark-up figures, as well as the sales contribution of each section in the value chain, are illustrated Manufacturing/Processing in Exhibit 1. Dried fruits and nuts, the two main categories of Tavazo products, had different manufacturing processes. Historically, nuts and dried fruit had been considered commodities in Iran. The three partner brothers felt an advantage in continuing their ancestors' way of differentiating the Tavazo products and tried to provide For nuts, time was of the essence once they were picked. They needed to be hulled promptly for proper nuts and dried fruits as a branded product as opposed to a commodity product. The store had loyal dehydration. If the outer shell was left on too long, the quality of the nut (and, in turn, the price it could customers who came to Vali-E-Asr Street just to buy nuts from Tavazo. command) would decline. The next stage was sorting the nuts and categorizing by size. Then, if some nuts such as pistachios were supposed to be roasted, they would go through the salting and roasting stage and In mid-March, before Nowrouz , the first day of the New Year in the Iranian calendar, the nuts and dried eventually be ready for delivery to retail stores. fruits market in Iran would experience a seasonal surge in demand in addition to the steady demand throughout the year. Iranians had been celebrating Nowrouz for more than 2,500 years. Families had the copyright violation Tavazo conducted all manufacturing operations in-house. Advanced drying and roasting machines were tradition of getting together, visiting senior family members, and exchanging gifts. Guests were served acquired to keep the quality of the products to a high standard. mostly nuts, cookies and fruit during the Nowrouz parties. Yalda night, the longest night of the year, was the other occasion that created a seasonal demand for Tavazo. The night was celebrated by going to the The manufacturing process for dried fruits was different to some extent. After the fruit was picked from the house of the eldest person in the family, eating nuts, and reading Hafiz poems. tree, collected and transported to the manufacturing site, it was washed, sorted, had its stones removed, and was chopped or sliced. Then it was spread in pots and placed in shelves in an area which was smoked by Use outside these parameters is a copyright violation. burning sulphur and other drying materials. Growing The company grew only a small portion of what it sold, and this mainly focused on fruits. Most supplies Tavazo Retail Store were purchased from gardeners and farmers across Iran. The relatively strong financial resources of the Use outside the business, as well as its insistence on high-quality products, had made the company's network of suppliers a Retailing was the main focus of Tavazo Co. in Iran. The Tavazo brothers believed that presenting and valuable asset. The company purchased the farmers' products months in advance of the harvest season. arooBU Stinegio S selling nuts and dried fruits was a special skill that only retailers specializing in nuts and dried fruits held 700BUStazo This was considered an advantage against rivals who could not do so for financial reasons. Also, Tavazo Therefore, they devoted a significant effort to presentation, in-store packaging and sales at the retail store. knew that high-quality products were not abundantly available. Farms or gardens with high-quality nuts Customers could browse the store, choose a product, fill special Tavazo bags with the desired amount and and fruits were limited. Therefore, the company did its best to develop a long-term relationship with its have the bags sealed with a packaging machine available in the store. Also, they could choose among the suppliers so that they would see little advantage in switching to Tavazo's rivals. gift packaging boxes or baskets offered in the Tavazo store. Exhibit 4 illustrates decorative handicraft pots and some gift boxes and baskets specifically designed for presenting Tavazo products at its store in As part of a heart-healthy diet, many people ate tree nuts with some regularity, either as a snack, as part of Toronto. Gift boxes/baskets carried a modest additional cost for customers. a recipe or as some kind of treat. Unlike many vegetable plants, nut trees grew for a long time before their first harvest. A walnut tree, for instance, performed best after 30 years and a pistachio tree took approximately seven to ten years to reach significant production. Year-to-year production levels were not Tavazo Brand and the Case of Imitators consistent, even after a tree had reached its prime. Many nut trees that produced a large crop one year would have a smaller yield the following year in order to build up internal nutrients. The store was known to offer slightly premium-priced products. However, customers who had quality as Authorized dous their first priority would choose Tavazo for their purchases both year-round and for special occasions. By 2010, the brand was more of a retail brand and did not have as much strength in the upstream of the value chain. However, Naser Tavazo believed that the company's relationship with growers and its tendency Nowrouz is the Persian word for new Iranian year and means "the new day." towards careful and high-quality manufacturing had a significant impact on its success in retailing. Hafiz was a prominent Irani prominent Iranian poet who lived from 1320 to 1389 AD. His poems are intriguing and complex. In addition to Focusing on customer satisfaction and excellent product quality made the Tavazo brand well known reading the oems, some Iranians open his poem book and use the dom poem that comes up for fortune-telling among nuts retailers in Tehran, a city which had about 10 million of the 70 million people in Iran. purposes. Although the majority of Iranians do not believe in the slieve in the ability of poems to predict the future, they still do it for fun. Type here to search O a 99+ W Ai 2:44 PM 27-Jul-22 25ECP001612_pcu (3).pdf X C O File | C:/Users/User/Downloads/ECP001612_pai%20(3).pdf O r Update E ECP001612_pcu (3).pdf 97 / 171 70% + Page 4 9B 10M093 Page 5 9B 10M093 Trained in a traditional business environment, the Tavazo brothers were not originally aware of the ENTERING CANADA importance of brand management. While the performance of the Tavazo nuts store was strengthening the brand, imitators started to pop up all around Tehran using Tavazo as the name of their stores. After a short In the 1990s, Tavazo Co. was steadily moving forward and although it had started exporting nuts, time, there were 28 such stores in Tehran and other cities in Iran. This caused the family to register the especially pistachios, to some countries like the United States, it had not planned any significant growth. In brand and take imitators to court. Naser Tavazo remembered a quote by one fake Tavazo store owner in 1988, after their father passed away, the three brothers decided to leave Iran in search of a more stable and court: developed environment in which to live, and to further their children's education. They began to consider whether they could expand their business into a foreign market. Among the countries on their list were the Well, I thought every store that sold nuts should be named Tavazo! :5/912029 6/9310120823/31/2022 United States and Canada, the two major destinations for the Iranian diaspora. Due to a lower government 5/912028 6/9340 020823/31/2022 tariff on nuts and dried fruits, they chose Canada. The U.S. government had encouraged aggressive growth The fake stores were banned from using the Tavazo name as a result. However, afterwards each used a in domestic U.S. pistachio production during the past three decades, the result of which was a tariff of prefix or suffix to Tavazo both to keep the name and to obey the lawful order of the court." Further follow- around 400 to 500 per cent on imported pistachios. Coupled with the increased global demand, pistachio ups required more legal expenditure, which was recognized as uneconomic at the time.* production had jumped from 1,179 tons of production in 1978 to around 175,000 tons in 2009." The Tavazo partners believed that by entering Canada, they would have access to its southern neighbor too. Iran's Economy A friend helped the family to go to Canada and believed that the overall living conditions as well as the business environment fitted their situation well. As a result, the three owner/manager partners of Tavazo After Iran's revolution in 1979, the economic as well as business environment in Iran became volatile. Co., together with their families, immigrated to Canada in 1995 under the business immigration program Many large companies were nationalized and the economy moved toward more government intervention. After their initial settlement and adjustment to life in Toronto, the brothers contemplated starting a similar Later, the Iranian government tried to change its policy towards more privatization and encouragement of business in Canada foreign firms investing in Iran, a policy that met with little success. rs is a copyright violation. Since they did not have an already developed market in Canada, and since the majority of their products Iran's economy had been performing relatively strongly in recent years, supported by high oil prices and were to be imported from Iran in bulk, they had to consider a warehouse to store the imported products to expansionary fiscal and monetary policies." Notwithstanding this, many believed the growth was not be sold over time. To be exported, nuts and dried fruits were to be packed, kept in industrial fridges, and proportionate to the country's resources and potential. Iran's economy was marked by reliance on the oil transported by ships equipped with fridges." The destination warehouse had to have refrigerators too. The sector, which provided the majority of its revenue. After oil, which constituted 80 per cent of the country's brothers bought a warehouse facility in Richmond Hill (a suburb of Toronto) and equipped it with the revenue, chemical and petrochemical products, fruits and nuts, and carpets held the next rankings in the necessary requirements. country's sources of revenue. As of 2009, the country's major export partners were China (16.6 per cent), Japan (1 1.9 per cent), India (10.5 per cent), South Korea (7.5 per cent), and Turkey (4.4 per cent), and the For some products, the manufacturing process was split between Iran and Canada. A major example was major import partners were the United Arab Emirates (15.1 per cent), China (13.5 per cent), Germany (9.7 roasted pistachios. In order for the product to be of the highest quality, the roasting process was to be done per cent), South Korea (7.2 per cent), Italy (5.3 per cent), Russia (4.8 per cent), and India (4.1 per cent). as close to the point of sale as possible. Therefore, pistachios were refrigerated and transported from Iran to Use outsic Canada, and the roasting process was done in the company's facility in Richmond Hill. An additional The country had been using a managed floating exchange rate regime since unifying multiple exchange advantage was that raw nuts could be kept in the refrigerated warehouses for up to two years without rates in March 2002. The rial, the local currency, had been pegged to the U.S. dollar ever since. This policy changing taste or color. Later, they could be roasted based on the demand from the market. made the exchange rate unrealistically low and caused imports to seem more profitable and attractive than local production and exports." The brothers started by wholesaling the imported products and distributing them to retail stores. Although the majority of the target retail stores at that stage were those with ethnic products, mainly Iranian and Afghan stores in Toronto, the Tavazo brothers did their best to familiarize others with their high-quality Iranian nuts and dried fruits as well. In 2010, on average 70 per cent of the Tavazo retail store customers were Iranians and 30 per cent were other nationalities. Naser Tavazo was surprised at the growth of the number of Chinese customers, who constituted around half of non-Iranian customers. We had participated in trade fairs in Canada and the United States during our stay in Canada. When we presented samples of Iranian high quality pistachios and dried fruits, Authorized dot some said they had not seen such large pistachios before and they doubted if they were really pistachios. 3Examples of the new names were Tavazo-North and Tavazo-Bazaar. $200,000 to $300,000 was the estimated legal cost for the follow-up at that time. International Monetary Fund's Country Report No. 10/74, www.imf.org, accessed September 23, 2010. The inflation rate was 13.6 per cent as of 2009 and 25.6 per cent as of 25.6 per cent as of 2008. The local currency would depreciate against the U.S. dollar each year by approximately these figures, whereas the controlled exchange rate policy would not let it http://taostat.fao.org. happen in reality. The products were exported to Canada through a trading company based in Iran. Type here to search O O a 199+ W Ai 2:44 PM 27-Jul-22 25ECP001612_pcu (3).pdf X C O File | C:/Users/User/Downloads/ECP001612_pai%20(3).pdf O r Update E ECP001612_pcu (3).pdf 99 / 171 70% + Page 6 9B 10M093 Page 7 9B 10M093 Notwithstanding this, the Iranian diaspora in Toronto was a proper starting point. The majority of Iranians COMPETITORS abroad knew the brand and the quality positioning that the company had. They understood that the premium-priced high quality of Tavazo products compared very well to the extant Iranian and American Retailing accounted for the majority of the Tavazo business. No significant Iranian competitor existed. Of pistachios and nuts available in the market. Naser Tavazo noted: course, the remaining Tavazo imitators in Iran sometimes attracted uninformed new customers by claiming that they were the original Tavazo. In Canada, the closest retailer to Tavazo in terms of product When we were in Iran, we had export orders from Canada that were very price sensitive. presentation was Bulk Barn. The market and product positioning of the companies, however, was quite They requested very low priced pistachios regardless of the size and quality. When we different. For example, in October 2010 the average retail price for natural, salted, unbranded pistachios offered higher quality pistachios, they were wondering if the market would pay for the 1 5/912022 (/9320020828/31/2022 was $26 per kilogram at Bulk Barn, while Tavazo sold its pistachios for $20-$30 per kilogram, depending 18 5/912629 5/981 020823/31/2022 higher price. It took time and effort since we entered Canada to establish a market on size. receptive to higher quality and premium priced products. In wholesale, there were a few companies in Canada which could be considered Tavazo's competitors." Meanwhile, the Tavazo brothers had to consider the management of the Iranian side of the business. On Naser Tavazo, however, believed that the limited strength of the company in the wholesale area had made one hand, Tehran's retail store was still active and manufacturing facilities in Karaj needed supervision and it more cooperative than competitive. In fact, North American Co. and Tavazo sometimes sold Iranian and control. With the expansion of the business, someone needed to be physically present in Iran to facilitate American nuts and pistachios to each other. the day-to-day issues that could come up. Good relations with suppliers was historically a valuable asset for the company, but needed close supervision and maintenance. Another need for a physical presence of a decision maker was plausible change in regulations (e.g. customs tariffs, or other restrictions) in Iran. On THE FUTURE OF TAVAZO the other hand, the brothers had all moved to Canada with their families. They decided to solve the need for managing Iran's facilities in a rotating way. Each of the three brothers would spend four months of the After a successful entry into Canada, the Tavazo family business was contemplating further growth. The year in Iran and the rest in Canada. The respective brother's family had the choice of staying in Canada, or challenge was to determine the direction of future business expansion. One option was to exploit current s is a copyright violation. having a trip to Iran to reconnect with family and friends. geographic markets, expanding more inside Iran and Canada and focusing more on the upstream of its value chain as a wholesaler. Alternatively, the business could pursue more geographic diversification and Dealing with retailers had its own challenges and difficulties. Many retailers were grocery stores with a entry into other international markets with or without Iranian diasporas. variety of products and were not as specialized in the presentation and sales to customers of nuts and dried fruits. Retailers' poor sales performance together with their financial weakness resulted in an increase in the number of non-sufficient funds (NSF) cheques received by Tavazo. Many of the products were Iranian Diasporas returned as a result. A more important factor for Tavazo that made its relations with retailers weaker was the harm to the Tavazo brand. Weak presentation and shelving of Tavazo products in stores made the For Tavazo, Iranian diasporas could be a solid starting point at the time of entry to a new geographic brand decline, which was not in accordance with what Tavazo had strived for over the years. market. The Tavazo brand recognition among Iranians was an asset that differentiated the company from Use outside the se pa Use outside the its export and retail competitors. Iran had a vast diaspora abroad. Some had gone abroad in search of The difficulties of dealing with retailers led the brothers to think of having their own retail store, as they higher education and quality of life. Others had done so for political reasons. The United States hosted over had in Iran. They knew that they should have the store somewhere on Yonge Street near where the a million Iranians, whose socioeconomic characteristics were reported to be significantly above average." majority of Iranians were residing and where the Iranian Plaza was located. A Thornhill store (near de dajer 00BU Staneg The United Arab Emirates, due to its proximity to Iran and its being a convenient hub for Iranian Richmond Hill) was chosen after an attractive offer was received. The store was decorated like the businessmen and tourists, hosted some 400,000 Iranians. Canada was third with some 120,000 Iranians, company's retail store in Iran and products were presented similarly. The company stopped distributing to followed by Qatar and Germany, with numbers fast approaching 100,000 each. Other countries with large the stores that were harming the brand through poor sales performance and presentation. Later, in 2010, the concentrations included Sweden, with approximately 54,000 Iranians; the United Kingdom, home to some company's second retail store in Canada was inaugurated in Richmond Hill. 43,000 Iranians; and Israel, home to some 48,000 Persian Jews. Exhibits 5 and 6 illustrate the statement of earnings and the balance sheet of the company in 2009. Candidate Cities Products By 2010, the three brothers had had frequent discussions about how to expand their business. Whenever they discussed more geographic expansion (see Exhibit 8 for the top pistachio importer nations in the Nuts, dried fruits and vegetables, spices, cookies and other Iranian ethnic food products such as saffron and Authorized dou world), cities such as Vancouver, Los Angeles, and Dubai were mentioned. Business expansion in the caviar were the main products of Tavazo in Iran and Canada. Exhibit 7 includes some rough estimates of current geographic markets of Tehran and Toronto often had its proponents in the family discussions as the sales contribution of each category. Among the products, pistachios were the largest contributor in the sales figures. North America Co., Genesis Co. and John Vince Co. were some examples. " The percentage of Iranians over 25 years old who had obtained a bachelor's degree or higher, for example, was 57.2 per cent in comparison to 24.4 per cent for the rest of the U.S. population. Percentage-wise, Iranian-Americans held five times the number of doctorates than the national average. Also, the per capita average income for Ira ge income for Iranian-Americans was 50 per cent higher than that of the nation (Source: Iranian Studies Group at the Massachusetts Institute of Technology). Type here to search O O a 99+ W Ai 2:44 PM 27-Jul-22 25ECP001612_pcu (3).pdf X C O File | C:/Users/User/Downloads/ECP001612_pai%20(3).pdf O r Update E ECP001612_pcu (3).pdf 101 / 171 70% + Page 8 9B 10M093 Page 9 9B 10M093 well. While the brothers were aware of the match between the company's capabilities and the opportunities Exhibit 1 for further geographic diversification, they were often concerned with the financial and managerial resources required for diversification. They had the experience of entering Canada and were therefore TAVAZO CO. VALUE CHAIN PRICE MARK-UPS AND CURRENT BUSINESS FOCUS aware that each market entry entailed initial set-up and market penetration costs. Recently, on a trip to visit some family and friends in Los Angeles, the city with the largest population of Iranians in the United States, Parviz Tavazo had collected some data on start-up costs for a new store and Farms & Manufacturing Wholesale & Retail Stores 1622 6/9820@20828/31/2022 discussed these with his brothers when he came back to Toronto. The monthly rental cost for a store in a Gardens Exports decent neighborhood and the required warehouse space cost were $2,500 and $1,500, respectively. He had estimated some $20,000 for store renovation and decoration and around $30,000 as the required financials for store and warehouse inventory. Furthermore, for store management, one of the family members would have to move and live in the new location. The other major restriction for Tavazo in the U.S. market was Mark-up (in %) the challenge of importing Iranian products (especially pistachios) into the United States. % of current 12 Having the second-highest population of overseas Iranians, Dubai was the other alternative on the table. business Apart from the Iranian diaspora there, many Iranians traveled to Dubai for business, vacations, and shopping. The number of Iranians travelling to Dubai was 970,000 in 2009. The generally rich Arab population of Dubai could contribute to the potential target market as well. The costs and challenges of starting and running a business in Dubai were to a great extent similar to those in Tehran. Exhibit 2 A major disadvantage of Dubai for the Tavazo family was its rather similar living environment to Tehran. Although the city was famous in the Middle East for its modern infrastructure, attractive entertainment and TOP PISTACHIO PRODUCER NATIONS IN THE WORLD se parameters is a copyright violation fancy shopping malls, the higher education system was no stronger than in Iran, if not weaker. No members of the Tavazo family seemed interested in moving to Dubai on a permanent basis. Top Production - Pistachios - 2008 Use outside these parameters is a copyright violation. Family Business Limitation 700000 As in every family business, the number of family members was considered to be a limited resource. The 600000 three partner brothers had four children between them, who were mostly university or college students. Only one of them had a business-related education. The three others were studying law and engineering. 500000 Further expansion of the business would probably require the family partners to bring in a non-family 400000 OBUSta Production (Int $ 1000) member partner or manager. The traditional family ambiance in the business would require a radical 300000 change and adjustment to accommodate a non-family member. 20000 The Tavazo brothers had to decide whether to enter new geographic markets, or to focus on the current 100000 markets and expand within them as retailers. They could also vertically integrate and expand by focusing more on the wholesale side. As a family, they had to contemplate their limitations and strengths in order to exploit opportunities and respond to threats to the business that they had inherited from their grandfather Turkey epublic China Greece istar Tunisia italy Republic Authorized dousscootyyib United States of Am Iran (Islam Syrian Source: http://faostat.fao. org/site/339/default. aspx, accessed October 6, 2010. Type here to search O O a 99+ W Ai 2:44 PM 27-Jul-22 25X ECP001612_pcu (3).pdf C O File | C:/Users/User/Downloads/ECP001612_pai%20(3).pdf O r Update E ECP001612_pcu (3).pdf 103 / 171 70% + Page 10 9B 10M093 Page 11 9B 10M093 Exhibit 4 Exhibit 3 TAVAZO COMPANY'S STORE APPEARANCE AND GIFT BASKETS IRAN'S RANK IN GLOBAL PRODUCTION OF NUTS AND FRUITS 16/98030020828/31/2022 Global Production Global Production Rank Commodity Rank Commodity 5/912022 19820120823/31/2022 (Value-based) (Value-based) Pistachios Pumpkins, squash and gourds Berries Sour cherries Watermelons Onions, dry Apricots Grapes Cucumbers and gherkins Tangerines, mandarins WNNN Dates Kiwi fruit Cherries Oranges Apples Lemons and limes Figs Lentil A Almonds, with shell 8 Spices Walnuts, with shell 10 Potatoes Use outside these parameters is a copyright violation. Use outside these parameters is a copyright violation. Indigenous sheep meat 10 Persimmons Peas, dry 10 Tea Hazelnuts, with shell 10 Natural honey Chick peas 12 Plums and sloes Peaches and nectarines 13 Melon seed Favaro TIMEC Tomatoes 13 Eggplants (aubergines) Source: http://faostat.fao.org. Authorized dou 2:44 PM Type here to search O a 99+ W Ai 27-Jul-22 25ECP001612_pcu (3).pdf X C O File | C:/Users/User/Downloads/ECP001612_pai%20(3).pdf O r Update E ECP001612_pcu (3).pdf 105 / 171 70% + Page 12 9B 10M093 Page 13 9B 10M093 Exhibit 5 Exhibit 7 TAVAZO CANADA CO. STATEMENT OF EARNINGS (2009) TAVAZO CANADA CO. PRODUCT SALES CONTRIBUTION (in '000) Sales $495 Product Sales Cost of sales $250 Contribution (%) Gross margin $245 Pistachios 20 Expenses Almonds 10 Administrative and selling expenses $70 Walnuts 15 Interest and bank charges $5 Seeds 10 Depreciation $2 $77 Hazelnuts 5 Total expenses $168 Cashews 5 Net profit (loss) before income taxes Dried fruits, vegetable, spices, etc. 35 Source: Company estimates. Note: Financial figures are estimates. Exhibit 6 Exhibit 8 TAVAZO CANADA CO. BALANCE SHEET (2009) TOP PISTACHIO IMPORTING NATIONS (2007) (in '000) geolder ige Menttried Meiversity Lbfi Newifguoid Current Assets Rank Area Quantity (tons) Cash $80 China. Hong Kong 55.031 Use outside these parameters is a copyright violation. Use outside these parameters is a copyright violation. Accounts receivable Germany 41.373 Inventory $60 China 29.915 Property, plant and equipment $600 Russian Federation 20.749 Subtotal $750 Netherlands 16.729 ON aDAWN Current Liabilities United Kingdom 15.040 Bank indebtedness $400 Spain 13.101 Accounts payable and accrued liabilities $45 Subtotal $445 Italy 1 1.533 France 11.073 Retained earnings $305 10 Luxembourg 10.612 11 Belgium 9.235 Authorizell dousscootyjibgh Richards Badger 80BU Stinegie Street 12 Note: Financial figures are estimates. India 7.777 13 Saudi Arabia 5.426 14 Mexico 1.879 15 Lebanon 4.613 16 apar 3.742 17 Israel 3.478 18 Pakistan 3.359 19 Canada 3.241 20 Lithuania 3.180 Source: http://faostat.fao. org/site/342/default. aspx. Type here to search O O a W Ai 2:44 PM 199 + 27-Jul-22 25ECP001612_pcu (3).pdf X C O File | C:/Users/User/Downloads/ECP001612_pai%20(3).pdf O r Update E ECP001 612_pcu (3).pdf 94 / 171 70% + Richard Ivey School of Business The University of Western Ontario IVEY 9B10M093 TAVAZO CO. eand 5/912022 5/ 920720828/31/2022. Majid Eghbali-Zarch wrote this case under the supervision of Professor Paul W. Beamish solely to provide material discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. Richard Ivey School of Business Foundation prohibits any form of reproduction, storage or transmission without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing. of Business Foundation, The University tario, London, Ontario, Canada, NGA 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail cases@ivey.uwo.ca. Copyright @ 2010, Richard Ivey School of Business Version: 2011-09-21 In June 2010, Naser Tavazo, one of the three owner/manager brothers of both Tavazo Iran Co. and Tavazo meters is a copyright violation. Canada Co., was considering the company's future expansion opportunities, including further international market entry. Candidate cities of interest were Los Angeles, Dubai, and other cities with large Iranian diasporas. Another question included where to focus on the value chain. Should the family business use its limited resources to expand its retailer business into more international markets, or to expand its current retailer/wholesale activities within Canada and Iran? BACKGROUND Use outside the Tavazo was a family business operated by three brothers: Naser, Khosrowand Parviz. The business was originally started by their grandfather. He had started his career as a gardener in Eastern Azerbaijan province in Iran in 1929 when he was 18 years old. Later, he moved to Tabriz, the capital city of the province, and dried his gardens' fruits using sunlight. From his small processing site, he distributed to small retail stores. Difficulties dealing with distributors led him to rent a store and sell dried fruits from his and neighboring gardens directly to customers. The store started with fruits such as apples, peaches and apricots. Then to the store's product list he added seeds, which he roasted in a big pan at the store. Authorizes do us ecotyyiby Richarde(Bidsj nce usuanegis S As the store's business grew, he added nuts such as pistachios and cashews, which were not the products of Azerbaijan. Pistachios thrived in areas with cool winters and long, hot summers. They were drought resistant and very tolerant of high summer temperatures, but could not tolerate excessive dampness and high humidity. Central provinces in Iran, such as Kerman and Yazd, were the main sources of Iranian pistachio production. He purchased raw pistachios from the central provinces and displayed and sold them in the store after roasting them. Their grandfather was 23 years old when he married. Later, his three sons joined him to grow the business. Meanwhile, the manufacturing site was equipped with drying machinery which burnt sulphur to dry the fruits, as well as roasting machinery for nuts and seeds. In 1962, the grandfather passed away and his elder son, together with his teenage sons Naser, Khosroand Parviz, moved to Tehran, the capital of Iran. He bought a store in a prestigious location in Tehran, as well as a warehouse and manufacturing site in Karaj, a city 50 kilometres from Tehran, and started the same Page 94 of 171 Type here to search O O 99+) O W Ai 2:43 PM 27-Jul-22 25