Competitive Advantage of Kuwaiti Organisations

The report describes resources that a company should possess to gain competitive advantage in the market. It also provides recommendations on how to sustain the existing competitive advantage for a company operating in Kuwait. The external environment of Kuwait is analysed to understand the market easily considering the internal and external factors of Kuwait’s economy.

Running head: COMPETITIVE ADVANTAGE OF KUWAITI ORGANISATIONS
Competitive Advantage of Kuwaiti Organisations
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1Competitive Advantage of Kuwaiti Organisations
Executive summery
The purpose of this report is to describe five resources that a company should possess in
order to gain competitive advantage in the market. Considering the business environment of
Kuwait the study will be elaborated further. Some recommendations have been provided as
well on how to sustain the existing competitive advantage for a company, which is operating
business in this country. According to the view of a market consultant, the environment has
been analysed. It will help the future investors to understand the market easily considering
the internal and external factors of Kuwait’s economy.

2Competitive Advantage of Kuwaiti Organisations
Table of Contents
Introduction....................................................................................................................3
External environment of Kuwait....................................................................................3
Five resources to gain Competitive advantage...............................................................5
Methods to achieve a sustainable competitive advantage..............................................7
Conclusion......................................................................................................................8
Reference........................................................................................................................9

3Competitive Advantage of Kuwaiti Organisations
Introduction
The following report aims to elaborate resources that influence business organisations
of Kuwait to gain competitive advantage in the market. Based on the external environment
analysis the critical report will further focus on the possible opportunities and threats that an
organisation in Kuwait might face while business executions. In order to sustain against
threats and make the best use of the opportunities a company must have some competitive
capabilities and useful resources to implement their strategy. Briefly, along with a brief
external analysis, this report is going to shed light on the process of creating competitive
advantage of organisations and to sustain long-term advantage in the market of Kuwait.
External environment of Kuwait
The country’s political environment and government regulations determine numerous
business decisions. Being the eighth richest country in the world Kuwait has started to
explore non-hydrocarbon sectors by spending more capital in order to maintain the GDP
growth. Although, the concentration has always been on the oil and natural gas industry,
Government has already invested a large amount to improve the infrastructure of
manufacturing industry. Future business opportunities of other industries are gradually
growing in this country as the business laws are transforming there. Moreover, both the
investors and the government are encouraging these new ventures apart from oil and natural
gas industry. As far as economic factors are concerned, Kuwait’s economy is one of the
fastest growing economies in the Middle East, depending on the industries of oil and natural
gas mostly. However, retail and manufacturing, mining and financial services also contribute
a considerable share to the economical growth of this country. Economic environment is
transforming as Kuwait has decided to emphasize the fact that the country cannot be confined

4Competitive Advantage of Kuwaiti Organisations
under specific industries. Simultaneously, it should invest and take risks in order to develop
the economy to a different level of success. Therefore, the country has increased their capital
contribution on R&D with the purpose of developing advanced technologies for the
upcoming new industries in Kuwait. In addition to that, Kuwait has been spending huge sum
to maintain and develop the infrastructure of existing as well as new industries within the
country. The country’s population consists of native people, non-Kuwaiti citizens and a huge
number of temporary people who has migrated to the country in order to do work for living.
Immigrants find Kuwait highly convenient to work because of fastest growing economy and
high paying jobs. Immigrants are mostly from India and South-East Asia. People come with
different knowledge on different sectors and technologies. Therefore, in such a diverse social
environment, there is a high possibility of emerging new business ideas. Very low possibility
can be seen about the crisis of skilled human resource as far as new industries are concerned
because of the country’s flexible law of immigration. Currently, Kuwait does not use any
kind of renewable energy sources. Moreover, technological development is not so impressive
so far. This is a matter of mass awareness that why they should not engage themselves into
the excessive consumption of non-renewable energy sources considering the increasing
environmental issues due to the excessive use of non-renewable energy sources. Future
business ventures should be more careful about issues related to environment. Government
and private investors should encourage developing technological solution if the country is
seriously looking for alternatives. The country deals with regular export and import of
products, therefore foreign policies are considered as strict yet to some extent flexible as so
many transactions are performed between Kuwait and foreign countries. After developing a
primary concept on the external environment of Kuwait few business opportunities have been
identified. As the economy largely depends on hydrocarbon industry, revenues gathered from
country’s export will remain high. Industrial sector of Kuwait will be able to play a

5Competitive Advantage of Kuwaiti Organisations
significant part. A development of other business sectors like infrastructure projects will be
under consideration. Although, there is an indication of transformation in business industries
of Kuwait (Crystal, J., 2016), still investment in mining, retail and manufacturing industries
can be profitable in future other than the hydrocarbon sector.
Five resources to gain Competitive advantage
Competitive advantage refers to the capability of a certain organisation that permits to
compete with other existing company within the same industry.
 Human resources: It is one of the main driving factors of gaining competitive
advantage (Leonidou et al. 2013). While recruiting employees an organisation
should emphasize on the efficiency of the candidates in order to assure better
business executions in future. Competition will always be there in the market
yet competitors cannot develop the quality of their human resource within a
night (Albrecht et al. 2015). Therefore, it is essential to hire skilled,
knowledgeable and experienced people if it is concerned with the performance
of the company and customer satisfaction in this competitive business
environment of Kuwait (Hennig-Thurau and Hansen 2013).
 Organisations structure and work culture: Organizational culture refers to
employee behaviour, beliefs, company policies and mission of a certain
organisation (Otache and Mahmood 2015). A company can possess world’s
best workforce yet if they do not share common motivation to perform on the
behalf of the company and engage themselves into a negative culture then it
hampers the productivity (Lin and Wu 2014). Hence, it is essential for the
management to establish a proper work culture where employees can deliver
their best in order to gain competitive advantage.

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 Business strategies and practices: Wise business decisions and superior
methods of business execution cannot be the same for every organisation.
Adaptation of superior methods of producing effective outcome should be
exclusive and difficult to predict for the competitors.
 Natural resources: Kuwait offers the largest source of natural resources. Oil
and hydrocarbon are the main dominant industries. Most of the organisations
are dealing with these two sectors. Kuwait has an excellent location, which is
traditionally blessed with natural resources. It will be profitable for those
business organisations, which are planning to initiate business on these two
sectors. However, considering the present economic and political scenario it
can be stated that expansion of other industries as well are encouraged by the
government and the investors. Although, business environment of Kuwait is
changing gradually, natural resources are major factor that has given the
country competitive advantage mostly.
 Technology: As discussed before, Kuwait has to travel a long way in the areas
of technological development and solutions. It plays a vital role in adding
competitive advantage to the brand name of the organisation. In the era of
globalization and technological advancement, it is important for the
organisation to be technologically updated, which includes office necessities,
energy, transportation and most importantly essential machinery. Although,
Kuwait has developed their hydrocarbon industry yet if the country want to
explore other industries, the country has to gain further perception.
When an organization sustains the profits made by them, and the profits is more than
the average profit of the industry they are in, then the organization is said to hold competitive
advantage over the other organisations in the same industry. Every business forms strategies

7Competitive Advantage of Kuwaiti Organisations
to achieve a sustainable competitive advantage (Gamble, Thompson and Peteraf 2013).
Competitive advantage exists in a business when the firm is able to produce the same benefits
as their competitors, however at a much lower cost or deliver the benefits that surpass the
products of their competitors. Therefore, it can be said that competitive advantage helps a
business to create a good value and incur profits for their customers and themselves.
Methods to achieve a sustainable competitive advantage
There are certain resources that have been mentioned earlier, which help in gaining
competitive advantage. It is of utmost importance for an organization to make those resources
sustainable so that they can be consistent in their competitive advantage. Firstly, human
resources are the most important aspect of an organization. Without employees, a business
would not be able to run, grow, or even compete with other organizations. Hence, it is the
responsibility of the organization to make surer that their employees are motivated in their
work and are fully utilizing their skills and knowledge (Ghosh 2013). For this reason, the
business should provide proper training and development programs so that the employees are
able to grow and contribute more to the business and ensure profit making. The organizations
in Kuwait have to provide proper performance appraisals to their employees, so that they do
not leave for another business with better programs. Secondly, the culture and structure of an
organization is an equally important factor. This is because even if the employees were
talented, they would not be able to grow and give their best if they are not happy or motivated
with their work place (Huczynski, Buchanan and Huczynski 2013). The business should
always ensure that no discrimination or false actions are being made against the employees
and also that the work culture is friendly. The employees should also be able to communicate
with the management regarding their problems and the management should take the
necessary actions to solve those issues. Thirdly, capital and natural resources are also

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important for the organization. Kuwait has almost 1/10th of the oil reserves in the world.
Hence, this is the most common and important natural resource of the country. Other
resources which could be beneficial for organizations would be natural gas and water
(Tietenberg and Lewis 2016). The organization should use these resources carefully without
exploiting them, so that they so not deplete quickly. Fourthly, every organization have their
own process and practices which makes it hard for other businesses to duplicate. This should
be maintained by the business so that they are able to hold on to their competitive edge
(Dumas et al. 2013). The organizations in Kuwait should find their own patents and practices,
and must ensure that they are able to sustain those practices in the long run. Lastly,
technology is the most common but important resource in today’s time (Drnevich and Croson
2013). Kuwait have become high in their technology with the changing time and this has
enabled the organizations to make changes it their work practices and also to make
themselves more advanced so that they are able to function better.
Conclusion
Therefore, it can be concluded that Kuwait has to develop technological solutions to
gain better competitive advantage. The country is blessed with diverse population and natural
resources that can help to sustain competitive advantage. Organisations should have effective
strategies and innovation policies to sustain the competitive advantage in the market.
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9Competitive Advantage of Kuwaiti Organisations
Reference
Albrecht, S.L., Bakker, A.B., Gruman, J.A., Macey, W.H. and Saks, A.M., 2015. Employee
engagement, human resource management practices and competitive advantage: An
integrated approach. Journal of Organizational Effectiveness: People and Performance, 2(1),
pp.7-35.
Crystal, J., 2016. Kuwait: The transformation of an oil state. Routledge.
Drnevich, P.L. and Croson, D.C., 2013. Information technology and business-level strategy:
Toward an integrated theoretical perspective. Mis Quarterly, 37(2).
Dumas, M., La Rosa, M., Mendling, J. and Reijers, H.A., 2013. Fundamentals of business
process management (Vol. 1, p. 2). Heidelberg: Springer.
Gamble, J.E., Thompson, A.A. and Peteraf, M.A., 2013. Essentials of strategic management:
The quest for competitive advantage. McGraw-Hill/Irwin.
Ghosh, A.K., 2013. Employee empowerment: A strategic tool to obtain sustainable
competitive advantage. International Journal of Management, 30(3), p.95.
Hennig-Thurau, T. and Hansen, U. eds., 2013. Relationship marketing: Gaining competitive
advantage through customer satisfaction and customer retention. Springer Science &
Business Media.
Huczynski, A., Buchanan, D.A. and Huczynski, A.A., 2013. Organizational behaviour (p.
82). London: Pearson.

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Leonidou, L.C., Leonidou, C.N., Fotiadis, T.A. and Zeriti, A., 2013. Resources and
capabilities as drivers of hotel environmental marketing strategy: Implications for
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