MODERN UNIVERSITY FOR BUSINESS AND SCIENCE

INTERNATIONAL SCHOOL OF BUSINESS

MGT601
Strategic Management
Instructor: Dr. Nada Jabbour Al Maalouf

Spring 2023
-ISB-
Project 1

April 2023
By

Firas Boukarroum ID# 10210134

Lana Boukarroum ID# 10220002
Kamal Baz ID# 10220022
Table of Contents
Abstract.......................................................................................................................................................1
1. Introduction.........................................................................................................................................1
2. PESTEL Analysis................................................................................................................................5
2.1. Political environment...................................................................................................................5
2.2. Economic environment................................................................................................................6
2.3. Social, Cultural, and Demographic Environment.........................................................................8
2.4. Technological environment..........................................................................................................9
2.5. Environmental...........................................................................................................................10
2.6. Legal..........................................................................................................................................11
3. Porter’s five forces analysis...............................................................................................................12
3.1. Competitive Rivalry: Rivalry Among Competing Firms............................................................12
3.2. Threat of new entrants: potential entry of new competitors.......................................................15
3.3. Threat of substitutes: potential development of substitute products...........................................16
3.4. Bargaining power of suppliers...................................................................................................16
3.5. Bargaining power of consumers.................................................................................................17
4. SWOT Analysis.................................................................................................................................18
4.1. Strengths....................................................................................................................................18
4.2. Weaknesses................................................................................................................................18
4.3. Opportunities.............................................................................................................................19
4.4. Threats.......................................................................................................................................20
5. Conclusion and recommendations.....................................................................................................21
References.................................................................................................................................................24
 Abstract

This paper has been conducted in the framework of analyzing the current business strategy of

IXIR in the midst of Lebanon's current difficult economic circumstances. The company has a

strong reputation for its commitment to quality, innovation and product positioning, and it has

established itself as one of the leader producers of wine in Lebanon and the Middle East. The

paper offers literature on PESTEL analysis, Porter’s five forces analysis and SWOT analysis

based on IXIR’s business model to better understand how IXSIR has been able to survive and

strive in these turbulent circumstances. As there is always room for improvement,

recommendations have been suggested to improve their business strategy such as market

development, partnerships and joint ventures, and internal growth strategies.

Key words: Lebanon, winery, business strategies, competitive advantage

1. Introduction

Ixsir Winery, a distinguished Lebanese winery, was founded in 2008 by a group of wine

enthusiasts, including Carlos Ghosn, former CEO of Renault-Nissan, Hady Kahale, and Gabriel

Rivero. The name "Ixsir" is derived from the Arabic word "al-Iksir," which translates to "elixir,"

symbolizing the winery's pursuit of creating a perfect blend of wine that embodies the essence of

Lebanon's rich terroir.

Nestled in the hills of Batroun, a coastal region in northern Lebanon, Ixsir Winery sits at an

altitude of 1,800 meters above sea level. The winery itself is a sustainable architectural

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masterpiece designed by Raëd Abillama Architects, blending harmoniously with the natural

surroundings.

Ixsir Winery focuses on sustainable viticulture practices, utilizing minimal intervention and

environmentally friendly techniques to cultivate their vineyards. The winery employs a

combination of traditional and modern winemaking methods, allowing them to create wines that

reflect the richness of Lebanon's terroir while also displaying elegance and balance.

Ixsir Winery produces a range of wines, including red, white, and rosé, under various labels such

as Altitudes, Grande Réserve, and EL. Some of their notable wines include:

1. Ixsir Altitudes Red: A blend of Cabernet Sauvignon, Syrah, and Caladoc, this wine

showcases the unique character of Lebanese reds, offering rich fruit flavors, velvety

tannins, and a long finish.

2. Ixsir Grande Réserve White: Made from a blend of indigenous Obeideh and Viognier,

this white wine is elegant and complex, with notes of citrus, white flowers, and a

refreshing minerality.

3. Ixsir EL Red: A premium red wine crafted from a blend of Syrah, Cabernet Sauvignon,

and Merlot, EL Red displays a rich palate, offering flavors of black fruits, spices, and a

hint of oak.

The winery works with a range of grape varieties, both indigenous and international, such as

Obeideh, Merwah, Cabernet Sauvignon, Syrah, Caladoc, and Viognier. The diverse terroir of the

Batroun region, combined with Ixsir's winemaking expertise, results in a portfolio of unique and

expressive wines that capture the essence of Lebanon.

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According to brand’s website, the vision behind IXSIR is to reveal the best terroirs of Lebanon,

some long since forgotten. Cultivated with respect to sustainable agriculture, IXSIR’s vineyards

are spread across the mountains of Lebanon on clay‐calcareous and limestone soil, from Batroun

to Jezzine, benefiting from microclimates that are unique to Lebanon (IXSIR, 2023).

The brand aims to deliver the best wine to its customers by cultivating long forgotten terroirs and

making use of them in the most sustainable way instead of leaving them unmaintained, thus

proving that Lebanon can be a leading country in the wine making industry worldwide, and that

it is well-suited to deliver the highest quality wines due to its fertile and rich terroirs and its

unique microclimates.

IXSIR's vision is both passionate and inspiring, particularly in a country facing ongoing political

conflicts and economic instability. The company aspires to create "the most sought-after wine in

Lebanon," a challenge given the existing popularity of numerous well-known Lebanese wine

brands. Nevertheless, IXSIR is committed to achieving this goal sustainably.

While profits are a primary objective for any business, it is essential for companies to uphold

other values that allow them to occupy a unique position in customers' minds. IXSIR excels in

this area by ensuring that all stakeholders—including farmers, customers, and shareholders—

derive tangible benefits and value from their business operations.

Furthermore, IXSIR's vision serves as a powerful motivator for its employees. Not only do they

contribute to the production of exceptional quality wines, but they also provide customers with

the opportunity to experience a unique blend that captures the essence of Lebanon. By

combining the richness of each terroir's grapes into one distinctive blend, IXSIR mixes the

nation's diverse flavors in every bottle.

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The core of their wine-making process and other wine‐related activities is sustainability. While

their primary mission as a winery is to offer customers the finest wine experience by consistently

showcasing the best mountainous terroirs of Lebanon, IXSIR is equally dedicated to employing

sustainable practices, such as "developmentally sustainable viticulture techniques”.

IXSIR winery is recognized for its green credentials and named by CNN as the world’s greenest

building. It is one of the twelve buildings that were chosen for their innovative design and

construction methods and for promoting sustainability (IXSIR, 2023)

In addition to its recognition as one of the greenest buildings globally, IXSIR won the Green

Good Design award in 2011. According to the U.S. News Network, the winery artfully combines

a restored 400-year-old feudal house with a contemporary green-skinned structure, featuring

walls that support plant growth. The ingenious design by Lebanese architects Raed Abillama

situates the cellar spaces underground, allowing the ground to act as a thermal sponge that

maintains optimal temperature and humidity levels (CLDH Human Rights Press Review, 2011).

Another contributing factor to the winery's eco-friendly reputation is its comprehensive

wastewater recycling from wine-making processes and other activities. The winery also converts

vegetable residue into compost and collects rainwater for irrigation purposes. IXSIR has received

the Architizer A+ award and the Green Mind Mena Award (IXSIR, 2023).

In summary, IXSIR's mission is to provide both local and international customers with a rich,

elegant, and complex blend of Lebanese wine that embodies the freshness and purity of the

Lebanese mountains and the power of the terroirs that IXSIR has revitalized. The winery

achieves this by employing sustainable and eco-friendly viticulture techniques and wine-making

processes.

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 2. PESTEL Analysis

The following project has been conducted in the framework of analyzing the current situation of

IXSIR, an old‐established winery based and operating in Lebanon, engaged in the manufacturing

and supply of wine products. IXSIR produces high‐quality of wine using grapes from different

regions across the country. The company has a strong reputation for its commitment to quality,

innovation and product positioning, and it has established itself as one of the leader producers of

wine in Lebanon and the Middle East.

2.1. Political environment

One of the biggest economic crises in recent times has been brought on by corrupt and inept

Lebanese leaders (Human Rights Watch, 2023). According to (Economist intelligence-Lebanon,

2023) the political instability in Lebanon is forecasted to remain high through 2023 to 2027.

Currently, the fraught governmental formation, the fractured parliament, and the presidency gap

are delaying the finalization of the IMF program agreed in April 2022 into late 2023. The tension

between the powers, is increasing leaving no signs of such solutions in the short term (Perry &

Bassam, 2022).

UN Special Coordinator warned that Lebanon stands at “a crossroad between rebound or

collapse” pointing that immediate action must be taken by Lebanese political parties regarding

the deal with the IMF (International Monetary Fund) and the donor countries including fiscal,

monetary, and governance reforms (Lebanon: At ‘a crossroad between rebound or collapse,

2022).

Regarding the municipal elections Voting is meant to start May 7, but financing has still not been

secured (L'Orient Today, 2023).

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Geopolitically, Lebanon faces the ongoing conflict in neighboring Syria, while tensions among

Iran, Israel, and other regional players strain its economy and security. Additionally, the influx of

refugees added pressure to Lebanon's already overwhelmed infrastructure and resources.

This political situation is affecting the private sector creating a bad environment for business.

The ministries continue to provide their minimum support which is always conceived as not

enough for the private sector.

In order to overcome this situation, exporting Lebanese production and developing external

markets is very important. Governmental efforts are needed to be placed to increase the export of

Lebanese wine to foreign countries.

2.2. Economic environment

Since 2019 Lebanon has been facing the most devastating crisis in its modern history. Financial

and economic crisis, influenced and exacerbated by the Covid-19 lockdowns and Beirut Port

explosion in August 2020, is classified globally as one of the worst crisis in modern history.

Nominal GDP decreased more than 50%, from 52$ billion to 23.1$ billion, and the GDP per

capita dropped by 36.5% between 2019 and 2022 causing a reclassification to Lebanon as a

lower-middle income country by the world bank (The World Bank in Lebanon, 2022).

Moreover, the Lebanese banking sector, took an informal procedure adopting a strict capital

control and distinguishing between US dollar deposits according to the deposit date (pre October

2019 and new fresh accounts). (The World Bank in Lebanon, 2022).

Purchasing power has diminished due to the decrease of average income, high inflation rates, and

severe currency depreciation. This situation led to a social crisis putting more than half of the

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population below the poverty line. Unemployment increased up to 29.6% in 2022 from 11.4% in

2018-19 (The World Bank in Lebanon, 2022).

The annual inflation rate has increased from 84.95 in 2020 to 154.8 % in 2021 reaching 171.2%

in 2022 (Central Administration of Statistics, 2023). According to the survey results,

Lebanon’s unemployment rate increased from 11.4% in 2018-2019 to 29.6% in January 2022

(Lebanon and the ILO release up-to-date data on national labour market, 2022).

(Elzir, 2021) added that despite the dire situation in Lebanon, firms are doing well and creating

jobs, mainly in the food and agro-food industry, as people switch to locally made products due to

the currency crisis and high import rates.

Despite challenges and a sense of uncertainty, the private sector in tech and services has

flourished in Lebanon (Shehadi, 2023). ‘’Recessions offer opportunities for innovators’’ to

introduce game-changing offerings or affordable solutions and make bold strategic moves.

Innovators facing resource scarcity during recessions are pushed to take necessary actions like

pruning prudently, cutting costs, and managing risks by sharing with others (Anthony, 2022).

Being none essential, wine market is effected by the economic crisis especially since the

Lebanese market is small and poor incapable of meeting the wineries marketing efforts directing

the companies towards external markets to achieve their goals.

This crisis has limited IXSIR's ability to sell its wines domestically and sustain growth.

Moreover, affected the brand’s potential and profitability in foreign markets. Hence, solid

marketing efforts and strategies are crucial for IXIR.

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 2.3. Social, Cultural, and Demographic Environment

According to Worldometer's elaboration of the most recent United Nations data as of Wednesday,

April 12, 2023, Lebanon's population is currently 6,740,939. The population density in Lebanon

is 667 per Km2. 78.4 % of the population is urban (5,353,116 people in 2020) (Lebanon

Population , 2023).

The Government estimates 1.5 million Syrian refugees and 13,715 refugees of other

nationalities. 90% of Syrian refugees are living in extreme poverty. (UNHCR-Lebanon, 2023).

On the societal front, income disparities, rampant unemployment, and worsening living standards

ignited social unrest and protests throughout the country, further destabilizing the political

climate and deepening the crisis creating obstacles for innovative and modern production

companies to market their products.

Despite the crisis and situation, Lebanese culture and traditions remains strong and Lebanese

find their creative way to protect their life high standards and the freedom of choice. The

Lebanese population is increasingly exposed to global culinary trends and wine cultures, their

taste preferences evolve, driving demand for diverse wine offerings. IXSIR needs to stay attuned

to these changing preferences, producing wines that cater to both traditional Lebanese tastes and

the preferences of international wine enthusiasts. This focus on crafting wines that appeal to a

wide range of consumers can help the brand establish a strong presence in the market.

In the context of IXSIR wine in Lebanon, social factors play an important role in determining the

brand's success and appeal to consumers. By digging deeper into these factors, we can gain a

better understanding of the current market trends and preferences that shape IXSIR's offerings

and positioning.

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Another aspect that paved another way to success is Wine tourism which is gaining popularity, as

consumers are increasingly interested in the story behind their favorite wines and the process of

winemaking. By offering immersive experiences such as vineyard tours, tastings, and

winemaking workshops, IXSIR can capitalize on this trend and create memorable moments for

consumers, ultimately fostering brand loyalty.

In conclusion, the social factors influencing IXSIR wine in Lebanon are multifaceted and require

the company to stay adaptive and responsive to consumer preferences and trends. By addressing

these factors, IXSIR can ensure its continued growth and success in the competitive wine

industry.

2.4. Technological environment

In 2017, the primary telecom provider in Lebanon, Ogero Telecom, was designing an IoT

LoraWAN network across the country. This technology was used in developing an agriculture

sensor network for vineyards based on Libelium wireless sensor network. The main purpose of

this viticulture precision project was to compile soil and climate information and their effects on

the grapes. The project was done in Libatel, in collaboration with Ogero Telecom, Université

Saint‐Joseph ESIAM, and Château Kefraya winery. (Libelium, 2017)

Today, several businesses in Lebanon, offer tools for implementing smart agriculture including:

1. MazraaTek offers farmers, exporters, and processors the necessary tools to easily

maintain their production, create reports and organize their documentation. (Mazraatek,

2023)

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 2. IOTree is a wireless sensory network that controls a farmer’s plot and makes them apply

the right farming practices through a farmer‐friendly mobile app capable of being ‘’the

eyes of every Tree and raising every Tree’s voice when necessary’’. (IOTree, 2023)

Also, several E‐commerce websites have been developed to provide an online marketplace for

Lebanese wineries. Examples include:

1. 209 Lebanese Wine (209 Lebanese Wine, 2023)

2. Vintage (Vintage Spirits, 2023)

At last, Lebanese businesses are now shifting to Solar power as an alternative source of energy

which is an inevitable solution for wineries to be able to sustain their electricity consumption and

production processes.

The increase of social media has significantly impacted consumer behavior, with influencers

playing an important role in shaping opinions and preferences. IXSIR can leverage this trend by

collaborating with well-known food and beverage influencers, organizing events, or sponsoring

tastings to showcase its wines and regenerate buzz around the brand. This approach can help

IXSIR expand its reach and connect with potential consumers in a more relatable and engaging

manner.

2.5. Environmental

Lebanon has the distinct advantage of having multiple microclimates, allowing for wine

production in various regions around the country. The majority of wineries are in the Bekaa

Valley and Chouf region, where a natural water supply and clay-calcareous soils, respectively,

provide suitable climates for wine production. While many of the grapes grown in Lebanon are

10
originally French, (Cabernet Sauvignon, Merlot, Syrah,etc…), there is so much more to

winemaking that distinguishes Lebanese wine, and makes it worth the experience. (Hechme,

2020).

These resources are generous to wineries allowing them to develop their markets and products.

In addition, IXSIR can strengthen its position by adopting sustainable and ethical practices in its

production processes, such as water conservation, organic farming, and fair labor policies. By

effectively communicating these initiatives to consumers, the brand can enhance its reputation

and appeal to a wider audience.

2.6. Legal

Regulation-wise, Corruption, political instability, and a lack of transparency in government led to

an inefficient regulatory landscape. This situation hinders Lebanon's economic growth and

development, negatively impacting public trust in institutions.

The legal environment for Lebanon's wine industry involves collaboration between several

government ministries.

The Ministry of Agriculture plays a crucial role in regulating, managing, and supervising the

industry. They have issued key laws and guidelines, which govern wine production, sales, and

exports.

A committee comprising members from different ministries and organizations was established to

create the National Institute of Vine and Wine (INVV). The INVV focuses on developing the

wine sector by:

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 1. Studying and proposing measures for the development of the vine and wine sectors in

Lebanon and improving their quality and specifications

2. Establishing rules for wine classification and certification

3. Proposing regulations for wine grapes, their products, and all matters relating to the

production, sale, export, and import of wine

The Ministry of Environment sets rules for wine production factories, while the Ministry of

Tourism works on promoting wine tourism in Lebanon. However, coordination with the

remaining Lebanese ministries is still in progress to help support the local wine industry as

follows:

1. Getting the needed support from different international subsidiaries

2. Coordinating with the private sector

3. Stressing export markets by aligning on activities with the Ministry of Foreign Affairs

and Emigrants.

Therefore, in terms of policies, the wine industry has a somewhat solid infrastructure that it can

rely on.

3. Porter’s five forces analysis

The five forces defined by Porter are the potential of new entrants in the industry, the power of

the supplier, the power of customers, the competition in the industry, and the threat of substitute

products, this framework helps us in understanding what makes an industry profitable and offers

the information required to make strategic decisions. (Cyberleninka, 2012).

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 3.1. Competitive Rivalry: Rivalry Among Competing Firms

The number of wineries has grown from 40 in 1996 to nearly 80 wineries in 2020 (Pickard,

2021). According to (Anon., 2022) the best 16 reputable wineries in Lebanon according to the

regions are:

- In Bekaa valley: Chateau Ksara, Chateau Kefraya, Domaine Wardy, Massaya, Domaine

des Tourelles, Chateau Saint Thomas , Chateau Heritage, and Coteaux Du Liban.

- In mount Lebanon: Chateau Musar, Iris Domain, Chateau Oumsiyat, and Adyar Wines.

- In north Lebanon: Ixir, Clos Du Phoenix, Aurora Winery and Vineyards, and Batroun

Mountains.

- In South Lebanon: Kram Wines, and Les Vignes Du Marje.

The chart below clearly shows the production power of these wineries with Ksara and Kefraya

dominating the market.

13
 Figure 2: Wine production in Lebanon in 2018 by producer (Current State of "Wine", 2019)

In addition to the competition with the locals, wine imports increased the intensity of the

competition although the imported volume started to decline recently.

Figure 1: Historical wine import (Current State of "Wine", 2019)

Figure 2 shows the huge drop in the volume of foreign wine from 953 tons in 2017 to 851 tons in

2018 which is equal to around 10%.

Various features are differentiating the competitors and must be considered such as the

companies size, age, award winning, production, sustainability adaption, and relation with

customers in which many wineries offer tour services and wine related courses.

The competition between the wineries in Lebanon is considered very high. When there is intense

competition among current rivals, the profitability of the business declines, and companies may

take action by lowering prices, introducing new goods, running advertising campaigns, and

14
improving services (Bruijl, 2018). As previously mentioned, the wine market in Lebanon has a

lot of rivalry and this forces the companies to innovate more to maintain or increase their market

share. IXSIR for example has worked tremendously to differentiate itself from the other châteaux

by producing premium quality wine. Moreover, the firm has built restaurants on site to increase

its sales especially that people are more likely to purchase wine from such places.

This double‐confirms that the company is doing its best to keep its market value and to perverse

its market place.

3.2. Threat of new entrants: potential entry of new competitors

The number of wineries has increased significantly despite the bad economic situation that the

country is facing. In fact, we have reached around eighty vineyards (registered and not). This

shows that entering this market is not difficult, especially since anyone can produce wine at

home.

However, massive investment should be allocated, and tons of research and development are

needed to stand out from the crowd. Moreover, good winemaking needs to be put under trial and

error to achieve the desired quality. Not to mention that one of the challenges in this industry is

the aging time of the wine considering that a minimum of four years is needed to initiate the

production phase.

These reasons demonstrate that as much as it is easy to enter the market as much as it is hard.

But with the needed knowledge and expertise, anything could be achievable and the company

should always improve its products and innovate technologically to remain competitive.

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The goal is to satisfy the existing customers and attract new ones in order to protect the current

market from new entrants.

3.3. Threat of substitutes: potential development of substitute products

One of the main competitions that the wineries were facing is imported wine. Lebanese people

used to consume these substitutions more than local products. However, citizens now are more

encouraged to buy locally produced goods, especially with the decrease in their purchasing

power. This led to a remarkable increase in the market share of some of the local products

including Lebanese wine.

The key element to compete in this environment is to have solid business and marketing

strategies with the adaptation of best technologies to achieve high quality low cost products.

With the existing well known substitutes IXSIR branding is very important in order to penetrate

the Lebanese market and maintain previous achievements.

3.4. Bargaining power of suppliers

In Lebanon, the wineries import everything needed for their products such as glasses and labels.

As for the prices, it is not easy to charge high amounts without a good brand image. That is why

IXSIR has invested a lot in its reputation, and it cannot jeopardize its market value. But either

way, IXSIR’s high prices may be a clear signal that the consumers are demanding more output,

and this definitely attracts more suppliers.

The suppliers’ power can be noticeable when there is a limited number of materials providers for

a large number of customers. The influence keeps increasing when the clients do not have the

luxury of choosing between numerous suppliers. In such cases, the vendors are in charge, and

they can easily control the prices (An Industry Analysis Using Porter's five forces, 2011). In the

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case of IXSIR, the suppliers' power ranges between moderate to high and this is due to two

things. First, the company tends to get grapes from its vineyards which leads to low bargaining

power. Second, IXSIR imports bottles, labels, cork‐stoppers, and barrels from abroad which

upsurges the retailer's influence.

In such particular cases, most of the wineries are willing to absorb the increase in their cost or

even decrease their profits to maintain their prices in the market.

3.5. Bargaining power of consumers

Customers’ bargaining power raises when the consumers can easily switch between one or more

suppliers due to numerous substitutes in the market (Bruijl, 2018). In other words, too many

alternatives lead to high power and vice versa. According to Bruijl, one of the ways that sellers

may use to reduce buyer control is by applying for loyalty programs.

According to (Anon., 2019) “The negative perception of Lebanese wine among some local

consumers (that it is headache inducing and expensive) is also changing”. Lebanese are shifting

towards the Lebanese wine which is proposing high quality with affordable prices paving the

way for local wineries to penetrate the Lebanese market and gaining the shares of imported wine.

In the case of IXSIR, its main marketing/sales strategy is based on B2B and not B2C which

minimizes such types of incentives. However, the company gives free tickets to visit Lebanese

touristic locations to its distributors as motivation.

Another factor to assess this force is the ease to find new customers. There is a lot of competition

in the Lebanese market and it is not that easy to expand locally and internationally, but it is now

smoother for the winery to sell its products in the country since they have already put a lot of

17
effort to introduce the brand. These are all clear signs that the customers have great bargaining

power because of the availability of many substitutions.

4. SWOT Analysis

The following SWOT analysis will allow us to understand the main strengths and weaknesses of

IXSIR (internal factors) as well as identify main opportunities and threats (external factors),

which will lead to a better assessment of the overall strategic position of the business and its

environment.

4.1. Strengths

1. IXSIR is considered the 5 largest producer of wine with a market share of approximately 4%
th

to 6% after Ksara, Kefraya, Musar and Saint Thomas. (BlomInvest, 2019). Since its

foundation, IXSIR has reserved a significant market share in the Lebanese market due to the

great product quality and effective marketing strategy.

2. The name of IXSIR brand has always been a remarkable trademark for a wine product of

high quality. What differentiates IXSIR from its competitors is the brand building and market

positioning.

3. IXSIR has large capabilities to adapt and maintain its presence in the market. These

capabilities include latest technologies used, varieties of land in different areas which provide

different types of wine, strong and solid company structure, etc.

4. IXSIR is currently investing in solar panels and sustainable energy in order to be independent

from the current electricity problems in the country.

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4.2. Weaknesses

1. Due to the current economic situation which had a substantial impact on difficulties in

transportation, IXSIR suffers during the harvest season from the shortage of staff [22].

2. IXSIR were recently obliged to increase prices, as it was impossible to maintain their

sustained prices during the ongoing economic crisis. This will no longer allow IXSIR a

competitive advantage compared to other brands available in the market who did not

increase their prices as they are supplied by small‐sized producers (lower cost of

production).

3. Prior to the crisis, sales turnover corresponded to 70% local vs 30% export market.

However, the part of local market has largely decreased to 40%.

4. IXSIR products are not widely spread in the local market, they are present in few large

supermarket chains (i.e. Spinneys) and restaurants.

5. Their maximum capacity of production is 600,000 bottles per year.

4.3. Opportunities

1. Wine consumption occurs in pubs and restaurants within a country where the hospitality

and tourism industries play a significant role, employing more than 200,000 individuals.

IXSIR primarily targets upper-middle and high-end establishments as its main customer

base in the sector.

2. Lebanon has consistently been a leading provider of wine. Wine production has thrived

due to a variety of favorable factors like land and climate, which is why there are over 45

wineries in the country.

3. Wine export has increased in the past few years, thanks to the support of different public

and private sector parties including the Ministry of Agriculture. Export of wine rose from

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 2,126 tons in 2020 to 2,792 tons in 2021 in volume and from $17 million in 2020 to $25

million in 2021 in value. (Lebanese customs, 2021).

4. The Lebanese wine is praised and recognized worldwide for its superior taste and quality.

5. Today, IXSIR heavily relies on export activity, mainly on the US market which is

considered as the largest in terms of sales. IXSIR has been able to reach and promote its

products in different US states, including Washington, New York and Florida, due to an

effective market strategy and brand awareness campaign.

6. IXSIR is available in different countries in Europe. Furthermore, and according to (Profit

Must, 2022), the Asian market is promising, IXSIR is available in Japan, and currently

working on penetrating the Indian market. The Indian economy is considered as one of

the world’s fastest growing economies with the country’s GDP predicted to reach $5

trillion by 2025.

4.4. Threats

1. Imported wine represents a threat to Ixsir in terms of competitive pricing. Also according

to the figures of Lebanese Customs, wine import has increased from 471 tons ($2.8m) in

2020 to 504 tons ($4.7m) in 2021. (Lebanese customs, 2021)

2. Due to the current economic crisis and the decrease in purchasing power, there is always

a fear of shifting the consumer’s trend towards other alcoholic beverages or a decrease in

the wine consumption. IXSIR lost almost half of the market share value in terms of sales

due to the low purchasing power.

3. With the absence of control and supervision from different government bodies and

considering that the production and sale of wine does not require a large investment, the

local wine market is vulnerable to new entrants.

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 5. Conclusion and recommendations

In order to continue growing its business, IXSIR can put and implement both external and

internal growth strategies. An external growth strategy involves expanding the business by

acquiring other companies or entering new markets. This can help the company to increase its

production and distribution capabilities, and tap into new target customer base. Some potential

external growth opportunities for IXSIR include:

Market development: market development is considered as one of the most effective strategies

where the producer has the chance to reach new markets and new customer base. As previously

mentioned, IXSIR has succeeded in targeting new international markets and its products are

currently available in several European, Asian and American countries, which proved that

external marketing was successful. As a result of the current local situation and market saturation

in Lebanon (local market is not enough), IXSIR has enough resources and experience with a high

ability to produce and to reach new foreign markets as well as promote their products.

Partnerships and joint ventures: although following backward integration could be beneficial, the

current strategy of supporting local vineyards proved to be effective specially in supporting

social relationship. Entering into partnerships or joint ventures with other companies in the wine

industry, could involve working with other wineries or distributors to expand IXSIR's

distribution network and reach new customers. It could also involve collaborating with other

companies on product development or marketing initiatives.

In addition to the aforementioned strategies, IXSIR can also pursue internal growth

opportunities:

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Investing in new technologies and equipment: investing in new technologies and prioritizing

R&D is a must in order for IXSIR to prosper. IXSIR could invest in new technologies and

equipment to improve the efficiency and quality of its wine production. This could include

investments in temperature‐controlled storage systems, grape sorting and crushing equipment,

and bottling and labeling machines. These investments will definitely help IXSIR in increasing

the production and producing higher‐quality of wine more efficiently.

Expanding its product line: IXSIR (product development is recommended and had proven to be

effective) could expand its product line to include new types of wine or wine-related products.

Product diversification could include introducing new varieties or blends of grapes, or

developing other products such as gin, vodka and whiskey-based products. (Domaine des

Tourelles, one of the oldest established wineries in Lebanon launched the “GinBey” gin and the

“Glenbey” whiskey and added them to their product assortment).

Investing in marketing and sales effort: IXSIR must maintain and increase investing in marketing

and sales efforts to promote its products and launch marketing campaigns to expand the brand

recognition. This includes increasing in advertising and promotion budgets, the investment in

social media and digital marketing, and the development of partnership with large retailers and

distributors. These efforts will help IXSIR to reach new customers and subsequently increase its

sales.

Digital innovation: developing IT strategies in which online platforms and social media are

critical for the success marketing efforts and investing in online sales and distribution. IXSIR

could invest more in its online presence, such as its website and social media channels, to make

it easier for customers to purchase online. It could also partner with online retailers or wine clubs

to reach new customers and expand the distribution network.

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To conclude, the Lebanese market of wine will always remain an important and promising

market in the Lebanese economy. Throughout the years, manufacturing of wine has always been

expanding and despite the economic and political instability that Lebanon is facing, local

demand for wine products has always been in an increasing trend. IXSIR winery has well

positioned itself among the top five major producers of wine in Lebanon and has also succeeded

in marketing its products in different countries worldwide. However, the current economic crisis

in Lebanon could be a major opportunity for IXSIR to reconsider its operations, costs, market

position and achieve growth by well implementing its short and long term strategies described in

this paper.

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