Strategies For Creating More Employment In Arabic Countries | Determinants Of National Competitive Advantage

Firm Strategy

Discuss about the Strategies For Creating more Employement for Arabic Country.

Kuwait is an Arabic country consisting of the sixth largest oil reserves in the world. The country has a huge share in the oil reserves making it one of the wealthiest nations in the world. The country experienced a period of growth and prosperity since 1946 (Al-Hawary and Alajmi 2017). The country started public work by introducing a modern standard of living. The country has become the largest oil exporter in the Persian Gulf region. This massive growth attracted many foreign workers to migrate to this nation for work.  The society is an open society and is liberal in empowering women in their society. However, the trade limitation in Kuwait is focused only in oil exports as the maximum revenue is drawn from this section. The growing nation has many further options to increase their economy and expand their trading scopes by attracting Multinational companies. The Kuwaiti dinar has a high value in international market hence proving the economic stability of the country (Al-Shammari 2014). The country has further scopes to expand their economic condition and increase their business by introducing MNC’s in their country. The discussion will discuss about the determinants of national competitive advantage that will attract MNC’s to the country. The study will discuss the determinants by using the Porters diamond model.

The four strategy that effects the national competitive advantages are firm structure, structure and rivalry, related supporting industries, demand condition and factor conditions.

International and multinational companies have a high chance for trading in Kuwait. The GCC has 5% tariff on the imported products. The income tax for foreign corporation is only 15% (Chadee, Roxas and Rogmans 2015). The commercial service has sufficient number of programs and services to provide assistance to the U.S companies to get established in this growing nations. However, the entry in Kuwait market must be taken with the assistance of competent and tax counsel. They employ experienced workers with specialised experiences in industrial background who can provide proper guidance and support to the industry. They have special agency who will guide the emerging industry to the country with proper guidance and information.   The government has an excellent infrastructure that will attract the foreign business to trade with the nation. They have a relaxed foreign exchange control(Al-Obaidi et al 2016). The taxation is also too low in the country, which attracts the international market to trade with the nation. The individual taxation is also low which increases the scope for further investments in business. This increases the scope of importing raw material and trading opportunities for the domestic firms. There a sufficient raw cash in the hand of the business person who can spend that money for further business. The supply of money has been controlled by the government and subsidising the prices of general materials (Assaad 2014). Thus, the country has enough cash flow for increasing their own business scope and market strategies and at the same time they can it attracts foreign countries to trade with them. A leisure tax system, flexible pricing and sufficient capital is present in this country (Marchi, Maria and Micelli 2013). The most vital aspect for business growth are available in this nation thus allowing the foreign countries to find better scope and opportunity to trade and expand in the country.

Population Growth

It is accounted that 70% of Kuwait’s population constitute 28-32% Kuwaiti’s. a growing population means a growing nation. A growing population brings a growth tin the supply, production and growth of the nation. The growing nation can provide support to the emerging industry. The nation has a good population level that supports the growth of the business in the domestic and international market (Nosova 2018). A growing population also measn a greater demand for products, this will enable th eMNC’s to create a proper demand for their products in this market. However, the government must make sure there is a reduction in corruption and a well- framed legal system is developed. The government should impose a strict restriction on corruption to prevent a bad image of the company legal system. However, an increasing population is always a better scope for emerging business to create a place in the market (Heffernan 2014). The population in Kuwait is one of the major determinants that will attract foreign traders to trade with the nation.

The Kuwait market is focused on their oil export trade. They have very less interest or expansion for other business scopes. The foreign countries that would like to emerge in this country would have an ease to enter and trade as the international market in Kuwait is highly flexible for foreign traders and has less changes of rivalry. The countries will face minimum objections for trading in this nation. The country has special laws for the competitive projects. The private sector of the country is yet to be covered by the nation itself. Hence, the scope for competition in this field is very low (Jehanzeb, Rasheed and Rasheed 2013). The majority is employed to the government sector.  The country is recently opening its chances for private sectors thus making way for domestic and foreign business to create their own demand in the market. The MNC’s that would like to emerge into this market will not face a high risk of rivalry or competition as there will be only a limited companies that will trade with this nation(Kuwait Times 2018). The business will enjoy monopoly on the system and will have high change for business expansion and profit.

The factors that affect the demand of product are income, taste, preference of the products. The country has a high chance for foreign transaction and thus it is also creating a demand for the products. The ease of trade and import has created a huge demand for the products in Kuwait market. The emerging countries that are interested to trade with the country will face a huge advantage in this field, as they will be able to meet the demand of the customers in the country with a high profit scale for themselves(Madun Y.K.A). The unlimited resources in the country are also an important factor to create a demand in the market (Behar and Mok 2013). The oil export business increased the foreign relation of the country, thus creating a transactional relation with the foreign country. This will enhance the scope for MNC’s to get attracted. The country also has enough cash flow and disposable cash as they have very less taxations (Laszlo and Zhexembayeva 2017). This will once again create a demand for foreign product and services in the country. The MNC’s will have many scopes to enter the market and establish a business organization in this country.

Rivalry

The government must emphasis on the gaps in technology field and create new types of organization and system that would create a market and job opportunities. The franchise system should be implemented as it leads to rapids proliferation of new business and job scopes in the market. The technology should be developed further to create a demand for workers to access the technology and systems in the industry. They should introduce latest technology and upgraded version to assure quality production. The technology development will help the industry and company to raise their standard and at the same time increase the scope for employment (Sharabati and Fuqaha 2014).

The companies must try to expand the business in different parts of the country. If the business is expanded then the company would require more employees to work on those branches. This would increase the scope for employment in the country. The companies must have a vacancy for the skilled workers in each branches, hiring the skilled and trained workers for this place. Thus, if the business gets expanded around the country then there are high chances for the company to hire more employees thus creating employment for the countrymen.

The country should emphasis on the education of the growing generation. They must make sure that the growing generation is updating themselves along with the developing technology and strategies. This will make them fit to join the new emerging companies and the existing companies and get employed there. The technical knowledge about the business and current system is must for every child in the country. Thus, the country must stress on th education system to create better opportunity for employment.

The domestic business in the country can merge with the MNC’s or take franchise to create their own scope of business in the country itself. The domestic business in the country can merge with the foreign business and develop a branch in their own country. This will demand for more workers for the branches thus, creating a demand for employment in the market. The businessperson can also take up franchise from the leading brands and open up branches in the nation. This will once again create a demand for employees in the market.

Conclusion:

Thus, if the country follows such strategies it will create a demand for employment in Kuwait market. The country has a high scope for foreign investment and MNC’s to invest in the company. The relaxations and ease have been already mentioned in the study earlier. However, if the mentioned measures are taken, the country will create more employment.  

References:

Al-Hawary, S.I.S. and Alajmi, H.M., 2017. Organizational Commitment of the Employees of the Ports Security Affairs of the State of Kuwait: The Impact of Human Recourses Management Practices. International Journal of Academic Research in Economics and Management Sciences, 6(1), pp.52-78.

Al-Obaidi, M., Ortiz-Volcan, J.L., Gomez, F.J. and Akbar, M.G., 2016, December. Supply Chain Modeling of a Steam-Based Thermal EOR Heavy Oil Field Development Project in Kuwait Lessons Learned. In SPE Heavy Oil Conference and Exhibition. Society of Petroleum Engineers.

Al-Shammari, B., 2014. An investigation of the impact of corporate governance mechanisms on level of corporate risk disclosure: evidence from Kuwait. International Journal of Business and Social Research, 4(6), pp.51-70.

Assaad, R., 2014. Making sense of Arab labor markets: the enduring legacy of dualism. IZA Journal of Labor & Development, 3(1), p.6.

Behar, M.A. and Mok, M.J., 2013. Does Public-Sector Employment Fully Crowd Out Private-Sector Employment?(No. 13-146). International Monetary Fund.

Chadee, D., Roxas, B. and Rogmans, T., 2015. GCC Market Scope and Competitiveness. In Prospects and Challenges of Free Trade Agreements: Unlocking Business Opportunities in Gulf Cooperation Council (GCC) Markets (pp. 34-54). Palgrave Pivot, London.

Heffernan, A., 2014. International Business Strategy. Logistics in Asia.

Jehanzeb, K., Rasheed, A. and Rasheed, M.F., 2013. Organizational commitment and turnover intentions: impact of employee’s training in private sector of Saudi Arabia. International Journal of Business and Management, 8(8), p.79.

Kuwait Times. (2018). Iran eyes major economic growth next year - Kuwait Times. [online] Available at: https://news.kuwaittimes.net/website/iran-eyes-major-economic-growth-next-year/ [Accessed 4 Apr. 2018].

Laszlo, C. and Zhexembayeva, N., 2017. Embedded sustainability: The next big competitive advantage. Routledge.

Madun, Y.K.A., Business Strategy Series.

Marchi, V.D., Maria, E.D. and Micelli, S., 2013. Environmental strategies, upg

Nosova, A., 2018. Private Sector and Economic Diversification in Kuwait. In Economic Diversification in the Gulf Region, Volume I (pp. 27-47). Palgrave Macmillan, Singapore.

Sharabati, A.A.A. and Fuqaha, S.J., 2014. The Impact of Strategic Management on the Jordanian Pharmaceutical Manufacturing Organizations' Business Performance. International Review of Management and Business Research, 3(2), p.668.