1. Given the nature of competitive rivalry and the competitive forces prevailing in the market place, critically discuss the resources and competitive capabilities that a company needs to have to be competitively successful?
2. Based on Question 1 above, suggest and critically discuss means by which a company can create sustainable competitive advantage.
1.The middle eastern country Kuwait shares the borders with the countries including, Saudi Arabia and Iraq. The most significant natural resource that can help in the generation of oil in Kuwait. Kuwait was able to receive freedom in 2011 from various external forces. The only country in the entire world which does not receive the supply from natural water is Kuwait. The organizations that plan to start the operations in Kuwait should consider the different external factors that will affect the profitability and the revenues in the long term. The nation has been facing huge disturbances related to political issues in 2011 itself. The free economy in the country has been developed in 2011. The economy of Kuwait is not quite vibrant when compared to the other countries in Middle East (Abdulla, Naser and Saeid 2014).
The major source of income which supported the economy of Kuwait in the year 1940 was related to the export of products like, hides and pearls. The government of the country should make significant efforts for diversification of the economy which can help them to take rational decisions with respect to the organizations that operate in the country in an active manner. The Kuwaiti economy is going through a rough time in the current years that has further led to lack of the foreign direct investment based activities. The reduction of surplus GDP of Kuwait in the recent time has been expected which can grow further in the next few years. The organization has huge number of expatriates who belong to different countries and have come to the country for the purpose of improving their standard of living (Adegbite et al. 2018).
The citizens of the country also face significant social issues which is based on the entry of huge number of people for the search of work. These issues have also created huge amounts of pressure related to the maintenance of workers who have entered Kuwait from many countries. The technological changes that have taken place in the country are also an important part of the development of the country. The advancements are therefore supported by the Central Bank of Kuwait and the funds that are provided by the organization. The projects that supported by the bank are based on oil mining. The country has been able to create advancements without aids taken from the other foreign countries. The environmental situation of Kuwait is affected by the oil mining based industries that operate in the country (Ahmad, Bosua and Scheepers 2014). The levels of pollution are increased due to the high oil spill levels due to the oil export based activities. The most significant regulation that has been implemented by the government is based on the absence of taxes that are related to the incomes of people. The rest of the regulations in the country are however quite strict which have an effect on the regulations that are formed by the business organizations which wish to operate in the country (Sikora et al. 2016).
Challenges Faced by Organizations
The Kuwaiti economy has been able to show good performance in the current years which has led to the entry of many foreign based organizations. The development of the economy has started mainly from the year 2011. The government of the country had taken significant steps for the purpose of reviving the economic condition of Kuwait. The most important considerations that are required to be made by the organizations that are planning to start to their operations in Kuwait are based on the issues that have occurred in the country previously. The organizations that are already operating in the country have the tendency to expand their operations with the aim to create new business related opportunities (Albrecht et al. 2015).
The Kuwaiti economy is going through a phase of diversification in the recent years. The companies that are starting their operations in the country thereby need to take advantage of the opportunities that are provided to them by the economic situation. The laws based on privatisation that have been implemented by the government can be helpful for the entry of new organizations within the country. The policies that will be formulated by the company will be mainly based on the ways by which they can operate in an easier manner within the organizational processes. The companies need to possess high levels of financial resources which can help in gaining a profitable position in the market (Biygautane, Hodge and Gerber 2018).
The company can also plan to include expatriates in different positions which can help in increasing the innovation based capabilities. The organizational operations can further be improved with the help of effective policies which comply with the labour laws that are present in the country. The companies can further create competitive advantage in the market by introducing diverse types of services and products that can be useful for the customers. The company needs to differentiate the services and the products that are offered to the customers. The laws related to taxes that have been implemented within the country can also be useful for increasing the profitability and revenues of the company. The absence of taxes within the system will further lead to the increased profitability of the organizations (Davcik and Sharma 2016).
The strategies that are implemented by the company also play an important role in its operations within the country. The brand names of these companies are also an important part of the core competencies that are used by them in the industry. The internal resources that are possessed by the company are important for the operations of new organizations in Kuwait. The country has an emerging market which helps to attract various types of investments from different countries. The companies can thereby take the opportunity to expand their operations in the country in a profitable manner. The country has become quite welcoming in nature in the recent years for new investments and organizations which has further proved to be a positive situation for the different companies. The strengths and the weaknesses of the organizations are important for the successful operations (Denrell and Powell 2016).
Strategies for Creating Sustainable Competitive Advantage
2.The strategic moves that are taken by the organizations are an important part of the creation of competitive advantage in the industry. The major aim of the company is thereby to gain new customers and build customer loyalty as well. The leadership based strategy thereby needs to be developed by the company with respect to the factors like, cost, quality, customer experience and the innovation based activities. The knowledge and information based strategies of the organizations can be modified with the help of the sustainable competitive advantage. The process of lowering the costs is also based on the successful operations of the organizations that aim to create competitive advantage in the industry in which they operate (Kaleka and Morgan 2017).
The company can also make significant competitive moves which can help in the reduction of the costs that are related to the production activities. The organization can further aim at collaborating with the suppliers who provide the raw materials required for production. Another important strategy that helps in the successful operations of the company is based on the innovation based capabilities of the various companies. The services and the products that provided to the customers thereby need to help the organization to become competitive in the industry. The company can be able to create advantage over the other competitors in the market itself (Kotabe and Kothari 2016).
The innovation capabilities of the organizations play the most important role in providing substitutes to the customers for the products and services that they are offered from various organizations. The partnership strategy can also be an important step for the company to create competitive advantage in the industry. The partners in the country are thereby capable of helping the so that it is able to innovate the operations in an effective manner. The company can also merge its operations with that of the partners so that the supply chain can be made effective. The experience that is provided to the customers by an organization is an important strategy for creating a brand value. The company can also create customer loyalty with the help of competitive advantage (Mahdi and Almsafir 2014).
The organization is able to become the leader in the market if sustainability is possessed in an effective manner. The process by which the company can become the leader in the market is important for creation of competitive advantage in the market. The steps and strategies that are taken by the organization are important to help in the creation of competitive advantage that is sustainable in nature. The competition which is faced by the company from the other organizations can be faced with the help of competitive advantage that is created by them within the industry. Sustainable competitive advantage can thereby be created by the company which can help it to operate in the industry for a longer term. This is important for the organizations to create a profitable position in the industry (Saeidi et al. 2015).
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Denrell, J. and Powell, T.C., 2016. Dynamic capability as a theory of competitive advantage: contributions and scope conditions.
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Saeidi, S.P., Sofian, S., Saeidi, P., Saeidi, S.P. and Saaeidi, S.A., 2015. How does corporate social responsibility contribute to firm financial performance? The mediating role of competitive advantage, reputation, and customer satisfaction. Journal of business research, 68(2), pp.341-350.
Sikora, D.M., Thompson, K.W., Russell, Z.A. and Ferris, G.R., 2016. Reimagining overqualified human resources to promote organizational effectiveness and competitive advantage. Journal of Organizational Effectiveness: People and Performance, 3(1), pp.23-42.
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