Strategies For Enhancing Kuwait's Competitive Advantage

Technological Advancement and Innovation

Discuss about the Determinants Of National Advantage.

The diamond model for the competitive advantage nations offers a concept that can assist one to understand the competitive ability of a country in global competition. The model comprises of four factors for competitive advantage: firm strategy, demand condition, related support industries, and factor conditions (Mohan, 2017, P. 149) For a country like Kuwait, there are various policies that it can put in place to strengthen its national competitive advantage in order to attract multinational corporations (MNCs) and protect domestic firms in the country.

The first policy is ensuring the country is focused and support technological advancement and innovation. According to Rajesh (2017, P. 58), Kuwait is a developing country and has been undergoing a process of technological transformation for almost three decades. This means the country needs to put more efforts to ensure it becomes a country that is known for technological advancements and innovation in order to attract as many multinational corporations as possible and also to make its local firms thrive.

According to diamond’s view concerning organizational strategy, firm structure, and rivalry, direct competition is among the major factors that makes organizations to strive for productivity and innovation. Sola (2017, P. 48) affirms that the world is dominated by dynamic conditions that need to be observed in order to make a country attain a competitive advantage. For Kuwait to make this dynamic conditions to be attractive to the multinational corporation, it should be technologically advanced because, in the recent decade, most firms seek to operate in countries that strive to do what others have not done in terms of technology. Direct competition can also be addressed through innovation because invention of new things plays a significant role in attracting investors to conduct businesses in a particular country.

The other policy which Kuwait should consider is ensuring there is high demand level in its consmuers. According to Mense-Petermann (2015, P. 267), companies like conducting businesses in countries where the level of demand for the products or services that they produce is high. Kuwait can improve demand by regulating its local population size, and also by addressing cultural and religious beliefs that makes people not to consume some products or services.

One of the four elements of Porter's diamond model for the competitive advantage nations is the demand condition, which states that the more demanding the consumers in a particular country, the greater the pressure facing companies to continuously improve their competitiveness through producing goods or services that satisfy customer needs (Bhawsar & Chattopadhyay, 2015, P. 668). This means demand is not only attractive to multinational corporations to conduct businesses in a particular country but also a major factor that makes the local firms to consider attaining a competitive advantage through producing products or services that meet customer expectations.

Rajesh (2017, P. 60) argues that demand promises business success because it keeps goods and services moving. This implies that if Kuwait implements strategies that will increase the level of demand for as many products and services as possible, its local firms will thrive, and more multinational companies will view the country as one of the most suitable for conducting businesses.

High Demand Conditions

To remain competitive, this country must ensure the demand conditions such as market size, home demand, market growth, and sophistication are favorable. According to Rajib (2010, P. 92), these factors companies to have a reason for running businesses in a particular country because they make them to always strive to meet the consumer needs. For instance, sophisticated home market buyers will always pressure companies to innovate faster and to come up with more advanced goods or services than those of the foreign competitors.

The other policy that Kuwait can use to attain a competitive advantage is through creating a factor advantage by ensuring all factors of production are present. According to Gupta (2015, P. 105), factors of production comprise of skilled labor, capital, and infrastructure. According to the porter’s diamond key elements the factor conditions, the factors of production in a country are formed not inherited. According to his view, among the key factors of production are skilled labor, infrastructure, and capital. This implies that for Kuwait to attain a competitive advantage, it must ensure these factors are present. One of the ways of having skilled and sufficient labor is encouraging education through building many training institutions and ensuring there is a proper curriculum that provides good training. The government can also ensure there is skilled labor by ensuring education is affordable to all people through charging reasonable fees.

The government can ensure the presence of capital through allowing easy access to finances, like for example, providing loans to entrepreneurs, implementing policies that make banks and other financial institutions to charge reasonable interest rates and so forth. One way of ensuring there is infrastructure is allocating some of the lands for industrial development, or selling lands intended for building industries at reasonable prices. It is also fundamental to ensure there are specialized factors that involve heavy, and sustained investment. According to Donatella (2015, P. 51), specialized factors are challenging to duplicate, and therefore lead to competitive advantage because if other firms find it hard to duplicate them, it means they are valuable.

According to the porter’s diamond model for the competitive advantage of nations, related supporting industries is also a key factor that can make a country to favor the success of businesses. This is because having companies that share some features encourage the exchange of information. It also makes competition to exist, hence leading to the production of high-quality products and strive to satisfy consumer needs.

According to the porter’s diamond model, the government acts as a catalyst and also as a challenger (Bhawsar & Chattopadhyay, 2015, P. 675). For this reason, the Kuwait government should encourage an environment that allows the related industries to share information, and access some of the things that can make their businesses to prosper.

If the government encourages related and supporting industries, firms will produce inputs that are crucial for innovation and internationalization. These firms will also provide cost-effective inputs, and strive to participate in the upgrading process, hence making other organizations in the chain to innovate. According to Sola (2017, P. 52), innovation is one of the key factors that favor business success because it enables companies to come up with better ways of doing things, hence reducing costs. It also assists in developing goods and services that meet customer expectations. When a country has related and supporting industries, multinational companies target expanding to these countries because of the guaranteed success of their business.

Creating Favorable Factor Conditions

According to Norbert (2013, P. 78), Kuwait is among the countries that have been affected by the issue of unemployment for many years. There are various strategies that organizations can use to create more employment. One of these strategies is ensuring there is a design for the future. This is because, with the rate of current technological and economic disruptions, jobs and skills interventions will only bear positive results if firms in this country strive to design them with a proactive, long-term approach instead of one which is reactive or based on past successes. For instance, internship programs which allow the youth to be placed in the traditional jobs will remain useless if those job categories will continue becoming obsolete within a period of five years.  Instead, more sense can be built if the internship programs are created for high-growth occupations.

Businesses can also aid in addressing the issue of unemployment in this country by promoting entrepreneurship through supporting startups and smaller enterprises. This is one of the most effective ways of addressing this issue because when a company supports one person to start a business, that person will create employment for other people in need of jobs. Companies can support entrepreneurs in various ways (Paulsen, 2017, P. 109). For instance, it can provide capital for startups, officer free advice concerning how to manage a successful business and so forth.

The other strategy which companies can use to address the issue of unemployment in this country is collaborating with training institutions in order to help them in providing the skills that they require in the world of work, and also to enhance lifelong learning. According to Paulsen (2017, P. 110), one of the factors that have caused a high level of unemployment in Kuwait is having courses that do not match the current needs in the job market. Partnering with training institutions will make them train the young people in a manner which can make them attain the required skills, hence preventing them from wasting a lot of time without jobs. Porcaro (2013, P. 192) affirms that job seekers with outstanding skills get jobs without challenges because they have what can impress employers to hire.

According to Lu (2017, P. 92), employing trainees after completing attachments is one of the strategies which firms can use to minimize the level of unemployment in this country. In most cases, some of the higher learning students remain jobless even after attending attachments and attaining skills from some of the companies that they join for attachment. If the companies implement policies that will make them absorb these students, the issue of joblessness will reduce. The companies can use these students to replace those who resign or retire instead of leaving them to remain unemployed even after giving them practical skills through internship programs.

References

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