Khoury home expansion to Jordan

Abstract

Many companies seek to grow and develop their consumer and market base through international expansion. Foreign markets are normally targeted for more profit, brand building, and growth. Furthermore, expanding into foreign countries can be the cause of an unstable economic and political situation in home country. Internationalization has become very important in world's business, and companies should sustain with the ongoing stream of globalization and internalization. Venturing from domestic to other geographical countries is very crucial, and choosing the correct entry mode is even more important for a successful market entry. Internal and external factors should be also taken into account prior to making the decision. Khoury Home is the leader in home appliances' sector in Lebanon. The company started as a small enterprise in 1999 with 5 employees in Elissar, Beirut. In 8 years period, the company faced a rapid and un-expected growth, arriving at 300 employees, 3 branches and a turnover of $51 M. It decided to take advantage of overseas markets through internationalization like many other businesses that continually seek to develop their consumer and market base. The Lebanese economic and political instability were mainly the key factors for Khoury Home's serious internationalization and thoughts for investing abroad. It decided to venture into Jordan, a nearby geographical country, a fertile ground for business development, with flexible rules and regulations facilitating foreign investment operations. Before going abroad, questioning the business model to adopt, the readiness and the capacity of the company, the marketing strategy and relative implementation is a necessity. The purpose of this memoir is to comprehensively answer these questions, define the best theoretical framework, and portray the limitations, whether financial or physical, that might face Khoury Home. The entry decision should be determined by the model to adopt, the corporate culture, the company's objectives, the level of resources, the level of control and the level of risk that the company is ready to allocate and assume. Several business models were depicted and the Uppsala Model was chosen for Khoury Home's entry to Jordan. We have constructed two research questions; are Khoury Home ready to internationalize and will the Uppsala fit the company's strategic decision. Based on the research questions, a literature review was conducted. Qualitative and quantitative data collection was carried out. Quantitative data were based on books, internet resources and articles, while qualitative data on interviews with Khoury Home' board members. Our research is basically to answer all these questions through the best model to adapt (the Uppsala model), scanning the environment through PEST and SWOT analysis, analyze the market and the household appliances sector in order to decide how and when to enter the market, highlight the internal and external factors that will affect market entry strategies and set the actual mode of entry: exporting, franchising, licensing, joint ventures or wholly owned subsidies.