What is Tavazo Co.?
Tavazo Co. started as a family business. The grandfather of the family was the founder. He started working as a gardener in Iran at a very young age. He learned how to grow different nuts and produce dry fruit. After gaining knowledge and becoming proficient, the grandfather opened a small retail store.
Initial Strategy
First, he started buying raw pistachios and other products from several provinces of Iran. He will receive the raw good, manufacture the final product, and sell it at his stores. The business grew as the company continued focusing on establishing long-lasting relationships with suppliers. Then, three sons joined the firm after finishing their education.
The brothers took the business in a different direction. Iran had a very high demand for dry fruits, nuts, and spices; therefore there were already many companies offering these products as commodities. The brothers placed Tavazo Co. products in the high-quality tier. The three brothers promoted an idea of differentiation with a branded product.
Tavazo Co. had some vertical integration, they produced part of their product, had a manufacturing facility and retail stores. Most of their focus was on manufacturing in retail. Strong relationships with growers gave them an advantage with a high sense of trust. Tavazo Co.’s manufacturing process was particular.
The three brothers learned the know-how from their father and continually improved the process. Tavazo Co.’s retail facilities were very high tech compared to other nuts and dry fruits sellers. The stores were highly decorated, the packing and storage were very efficient and well presented.
Unfortunately, Tavazo Co. had to fight many imitators that started taking its name in other stores. The Tavazo brothers registered the brand and fought imitators in court. Finally, the fake Tavazo stores changed their name, but they continue to do business with similar names.
Expansion: The Environment in Iran and Canada
Economically, Iran was growing at a very desirable rate for new businesses. But, the Tavazo brothers were looking for a more stable and developed environment to live. After the father’s death, the brothers moved to Canada. Canada had a large Iranian community and a high living standard.
In Canada, Tavazo Co. started with a small manufacturing and storage facility. The Tavazo brothers brought most of the raw products directly from Iran and manufactured their final products in Canada to ensure the highest quality. Since the Iranian facility had to be taken care of, the brothers rotated every few months and went to live in Iran. When they were living in Iran, they will manage the stores and continue relationships with producers.
Tavazo Co. gained a significant market share in Canadian retail stores. Many difficulties raised when working with retailers. Therefore, as they had experienced managing stores in Iran, they decided to open one in Canada.
Further Expansion
The brothers are considering expansion, but they are unsure of the most beneficial expansion strategy. They are considering expanding geographically or vertically. Also, as Tavazo Co. has grown, there will be a need to expand management. Management expansion may bring difficulties since Tavazo Co. has always been a family business, and they will need to hire external employees.
Which countries should they expand to?
Overall, yes, they have the potential to expand, but they must explore target countries carefully. I would recommend taking into consideration geographical areas were dry fruits or nuts are not produced extensively but have the potential to do so. For example, Chile; Chile has desert weather and the potential to grow pistachios and other nuts.
So far, Chile has not reached the desired production. “Chilean production has not reached its production potential. Countries like Iran and Turkey are achieving, on average, yields near 2 tons per hectare, and in California a good producer can reach 4 tons per hectare, which shows us there’s a lot of work to be done here in Chile” says Gamalier Lemus, agronomist and Deputy Director of Research at INIA” [1]. Depending on the number of financial resources Tavazo Co. has, they could consider expanding into other markets and developing an agricultural facility. They will not only have more access to raw material, but a new market to explore.
[1] Chile Property. (2015, March 29). Pistachio Farming in Chile. Chile.
