Diamond National Advantage

Running Head: DIAMOND NATIONAL ADVANTAGE
DIAMOND NATIONAL ADVANTAGE
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1DIAMOND NATIONAL ADVANTAGE
The open economic aspect and the highest valued currency unit in the World make
Kuwait one of the lucrative markets in the world. The leading business sector is the Oil and gas
but the government is also puts emphasis on other business initiatives. As a result of that IT and
construction business are going to the next promising business initiatives within the country.
However, there are several loopholes that create obstacle for future development of the Kuwaiti
industries in an overall scenario. Therefore, this essay intends to look into the business market
opportunities and conditions in Kuwait through the glance of Porter’s Diamond of national
advantage model. Moreover, the discussion extends its focus on relevant strategies and
government policies that will help the country to refurbish its economy.
In this regard, the Diamond of national advantage is trying to identify the business
environment in Kuwait and entitled to highlight the competitive advantages that the local and
international organisations can get while doing business in Kuwait.
As far as the factor conditions are concerned, it can be argued that most of the business
industries in Kuwait are primarily focused on the offline business initiatives. However, with the
opening of the market for global corporate organisations, it becomes essential for the Kuwaiti
industries to implement technology into the business orientation. As a result of that, tech
business and e-commerce practices are growing at a rapid pace in Kuwait. Moreover, it is also
linked with the industrial relation and the skill of labourers. The Kuwaiti business sector follows
a clear preservation of the process of Pluralistic approach. It means the role of government and
the trade unions are also considered to be a major facet for establishing better employee interest
in the industrial market. As a matter of fact, Article 43 of Kuwaiti Constitution provides the
workers the right to strike (En.portal.santandertrade.com 2019). Therefore, it becomes an
important aspect for the business organisations to abide the laws and regulation of the

2DIAMOND NATIONAL ADVANTAGE
government and at the same time shape an effective business environment that will meet the
interest of both industrial firms and employees. However, the high competition in the local
market can discourage the multi-national companies to enter into the Kuwaiti market. In addition
to this, the role of the government is highly significant in order to understand the progress in the
market (Emerging-markets-research.hktdc.com 2019). The Kuwaiti government already invests
huge amount of financial aid to procure a national development plan. Therefore, investing money
in the electricity and automotive, IT and telecommunication is also a part of the government
initiatives besides the flourishing business in Oil and gas.
The market demand in the Kuwaiti market is quite promising for the international
organisations in terms of exporting crude oil from this country. However, this intense
dependency on the oil and gas sector is considered to be a problem for the steady development of
Kuwaiti business market. The government also tries to focus on alternative practices that will
help to develop a healthy business practice. Moreover, it can be stated that Kuwait itself is a rich
country with a high per capita income. The GDP increase rate in the annual years can be
identified with a growth of 4.1 in 2020 where as in 2019 the total GDP is estimated 152.37
billion (En.portal.santandertrade.com 2019). Furthermore, the inflation rate is also identified as a
major factor to identify the demand in the market. In this regard, Kuwait enjoyed an inflation rate
of 0.8 in 2018 (Al-Saidi and Al-Shammari 2015). It means the government sets effective policies
in order to control the inflation rate effectively. Oil and gas is refereed as the major industry in
Kuwait whereas the government is also willing to develop infrastructure in the banking,
property, security and environmental management. In addition to this, the political stability of the
country paves the way for a growing tourism and hospitality industry. It will help the country to
maximise its international customers and business companies to invest extensively.