Porter's Five Forces Analysis Of Jabwood

THE BIG ‘C’ – COMPETITION!

In the light of the Resource Based View the company should focus on its own resources rather than on external factors when assessing its competitive position on a new market. As explained by Marinova, Child and Marinov (2011), the reason behind this view is the ability of the firms to manipulate the environment in such a way that their resources strengthen their competitive advantages. To better understand how this model applies to Jabwood’s reality, it is pertinent to first present four concepts: FSA as firm specific advantage, FSD as firm specific disadvantage, CSA as country specific advantage, and CSD as country specific disadvantage. When looking at its competition in each market and defining its expansion strategies

Some of the potential country specific disadvantages (CSD) for other companies are: the importance of long lasting relationships on the market, the need for previous knowledge about the Arabic business culture, and the requirement of high quality products. These three characteristics are crucial for succeeding in Saudi Arabia and as they can be difficult challenges to overcome by other firms, Jabwood can take maximum advantage of its network position and translate it into a competitive advantage. Interpreting the words of Johanson and Vahlne (2009), the network position of a company is a result of its institutional and business knowledge of a market and of how it is perceived by the other players. Therefore, the strong relationships that Jabwood already built, the knowledge it has acquired, and its previous success in delivering high quality products make it a recognised reliable partner in the Saudi Arabian

Entering this market Jabwood faces stringent requirements of product size and quality, traded at high prices due to the lack of alternatives. The big disadvantage of the market (CSD) is the potential complications in the practice of business due to the Communist nature in the formulation of laws.

Jabwood is not familiar with the Chinese market and because of that urges the necessity to present the concepts of liability of foreignness and liability of outsidership. Johanson and Vahlne (2009) define the first type of liability as the lack of institutional knowledge of the market and the second one as the absence of enough knowledge about the business on a specific market. These are disadvantages that the company faces towards its competitors that already operate in the country.

However, in this market there is also one country specific disadvantage of China that Jabwood can use at its favor to leverage itself from some of its competitors. The stringent requirements regarding the size and quality of the products are obstacles to many firms but constitute Jabwood a specific advantage. By focussing on this strength the company can use the country specific disadvantage to enhance its own specific advantage and elevate its position in relation to its