Political Situation in Kuwait
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 organizations which plan to enter a new market area need to analyse the external environment which can help them to take decisions regarding the policies that are formed. The resources that are provided by the country in which the companies operate play an important role in the operations and profitability as well. The discussion is mainly based on the analysis of the marketing environment in Kuwait and the resources that need to be acquired by the companies in order to operate in the country. Kuwait is a Middle Eastern country which is bordered by countries like, Iraq and Saudi Arabia. The country became independent in 2011 from the various forces (Abdulla,Naser and Saeid2014). The different external factors in the country are able to affect the ways by which the company formulates different strategies. The political situation which prevails in the country is quite disturbing in nature. The different political parties that are present in the country affect the policies that are made by the government. The most important industry in Kuwait is oil production. The economic factors situation of the country also affects the ways by which the organizations plan to operate in Kuwait. The country had a closed economy which was reluctant to allow high levels of foreign direct investment. The entry of new organizations and industries was also not quite easy in this case (Adegbite et al. 2018). The reforms in the economy have taken place later on which had led to the increase of foreign investment and improvement of the infrastructure of the country. The social factors of Kuwait are based on the entry of expatriates who are living in the country for the purpose of improving living standards. The local people of the country are not satisfied with the huge entry of expatriates from other countries. The technological environment in Kuwait is based on the transfer of technology with the help of Central Bank of Kuwait. The country has not taken any aids from the other countries for technological development. The environmental situation of the country has been disturbed by the pollution that has been caused by the oil spills in many parts of Kuwait
Economic Factors in Kuwait
Albrecht et al. 2015). The health of local citizens has also been affected due to the extreme levels of pollution that have been caused due to the oil spills in different areas. The laws that are enforced by the government of Kuwait have been helpful for managing the wages and salaries of the employees. The laws are followed quite strictly by local citizens and the organizations which operate in the country.
The economy of Kuwait has been able to depict an effective performance in the recent years which has been helpful for the entry of new organizations in the market. The steps that have been taken by the government of the country has also been helpful in the creation of new business based opportunities. The expatriates of the company are the most important resource for the successful operations in the country. The improvement of organizational operations plays an important role in the competitive market. The services and products that are offered by the company are important for the competitiveness in the market (Azhar 2014).
The government of Kuwait has introduced a regulation where the organizations are not liable to pay taxes for the income that is gained by them within the market. The resources that are possessed by the company are important for its successful competitive position. The external factors of Kuwait have depicted that the country has become open to the different business organizations which plan to enter the market. The organization can thereby take advantage of the situation and enter the market in such a manner which help in providing the competitive position that it requires. The human resources that are developed by the company will play the most important role in the operations (Biygautane, Hodge and Gerber 2018).
The company will be able to create the human resources by recruiting suitable people from the country in different positions within the organization. This will be helpful for the company to become successful in the market. The strategies which are developed by the company for operating within the market will be effective in maintaining the competitive position. The financial strength of the company is thereby most important for facing the competition from different organizations in the market. The emerging market of Kuwait will play a welcoming role in the current time for creating a positive position in the market. The expansion based plans of the company will also be successful if it is able to start its operations in the country in an efficient manner. The laws which are formed by the government is important for becoming competitive in market in an easy manner (Davcik and Sharma 2016). The different products which are offered by the company are important for competing with the other organizations in the industry. The policies that are developed by the company for the purpose of complying with labour laws are important in Kuwait. The main reason behind this being that the laws which are formulated by the government of Kuwait are quite strict in nature. The business based opportunities can be created by the company that is effective in ways by which the economic position of the country can be revived. The privatisation based laws of the country is important for the company to operate in the country (Gerges et al. 2016).
Social Factors of Kuwait
2.The company which plans to start its operations in Kuwait needs to possess some major competitive advantages which can help in creating its position in the industry as compared to the other organizations. The organization can gain leadership with the help of low cost that is related to the production based process. This can prove to be an advantage for the company which has its operations in the market. The company thereby needs to formulate strategies that are based on the cost based leadership in the market. The company can also differentiate itself from the other companies which are already operating in the country (Jakob 2015).
The differentiation based strategy that is used by the company is related to the ways by which it can compete with others. The company can create an effective position in the market with the help of differentiation strategy. The business organization is further able to maintain competitive advantage with the utilization of the defensive strategy. The strategy is also related to the cost leadership and differentiation based strategy that is formulated by the company in the industry. The alliances that are formed by the company in a new market area can also be helpful in the creation of competitive advantage. The resources that are created with the help of these alliances can affect the ways by which the organizations operate (Kaleka and Morgan 2017).
The companies also need to provide high levels of customer service along with the products that they offer to them. The experience of customers is an important part of the competitive advantage that is gained by the company. This will also help the company to gain loyalty of the customers with the services that are provided by them. The sales channels that are created by the organizations are important for the successful operations of the company. The organization thereby needs to create customer information based systems of high levels. The innovation based activities that are performed by the company are important for the successful creation of resources and competitive advantages (Saeidi et al. 2015).
The financial resources of the company play an important role in increasing the innovation based capabilities. The knowledge resources of the company are important for being successful in a competitive market. The external environment of the company is thereby important for the capabilities and the resources that are created and used. The company can become successful in the competitive market with the help of the resources that are gained in the industry. The company can create its effective position in the country with the help of successful brand names as well. The strong name of the brand can thereby play a significant role in the creation of a sustainable competitive position of the company. The competitive forces that are already present in the market can be faced by the company with the help of the capabilities that have been formed in its operations (Sikora et al. 2016).
Technological Environment in Kuwait
The company can face the competition so that it can form a brand in the country successfully. The human resources or the employees who are hired in the organization will also a major role in managing the competitive rivalry in the industry. The competitive capabilities are also created with the assistance of the different financial and human based resources that are gained by the company. The market place of the organization, that is, Kuwait has been able to form a diverse and welcoming economy which has further led to the creation of competitive abilities. The organization will thereby be able to operate in the environment and face the competitive rivalry in effective manner (Wagner III and Hollenbeck 2014).
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Wagner III, J.A. and Hollenbeck, J.R., 2014. Organizational behavior: Securing competitive advantage. Routledge
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