Abstract

This case is about Israel-based cosmetics company, Ahava Dead Sea Laboratories (Ahava), which made skincare products from the mud and mineral-based compounds obtained from the Dead Sea. The company started in 1988, selling bottled mud to the tourists. Within one year, its products were available across Israel and its revenues were US$ 1 million. The company expanded rapidly and sales from non-Israeli markets accounted for 60% of the revenues in 2011. Ahava’s operations were carried out from two Israeli settlements in the West Bank, Mitzpe Shalem and Kalia. Several pro-Palestine groups started a campaign against Ahava, alleging that it was operating from the occupied territories. They said that Ahava was pillaging natural resources from the Dead Sea in the occupied areas, and was profiting from it. The protests intensified and spread across the world, forcing several retailers to stop selling Ahava’s products. With a limited market and potential in Israel, it was necessary for Ahava to have strong international operations to sustain itself and grow. With the business environment posing tough challenges, it remained to be seen how Ahava would come out of the crisis.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• The challenges companies can face due to a hostile business environment.
• Strategies that companies should adopt to overcome a crisis in a hostile environment.
• How companies operate in a hostile environment created by outside intervention?

Keywords

Ahava Dead Sea Laboratories, Ahava, West Bank, Israel, Palestine, settlements, Kibbutz, Mitzpe Shalem, Mitzpe Kalia, Dead Sea mud, minerals, cosmetics, natural products, pillage, natural resources, occupied territory, boycott campaign