Enhancing Industrialization: Basic Policies for Innovation and Upgrade

Running head: MAKING SENSE OF STRATEGY
Making sense of strategy
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MAKING SENSE OF STRATEGY
Kuwait is a petroleum-based country, situated in Western Asia. The country already
accepts foreign direct investment though the amount is not sufficient. In 2003, the
government of this country implemented a new law stating that a foreign company can own
100 percent ownership of a company in any business sectors. Due to this insufficient amount
of foreign investment, it is essential for a policy expert to attract foreign investors to invest in
different business sectors. In this context, the Diamond of National Advantage of Porter can
play a significant role (Mboya and Kazungu 2015). According to this model, the government
of a country generates advanced factor endowments through which the country can
experience comparative advantage.
To attract foreign investors in Kuwait, a deep analysis of Porter’s Diamond model is
essential. Through analysing this model, the country can understand that in which business
sectors it has comparative advantage. The entire discussion will be based on industrial sectors
of Kuwait. This diamond model provides four chief determinants that the nation can establish
of industries.
Figure 1: Diamond National Advantage
Source: (Konsolas 2017)

MAKING SENSE OF STRATEGY
The above diagram represents a diamond consisting with four determinants through
which a country can enjoy comparative advantage. These determinants further help the
policymaker of the concerned country to understand about availability of different resources
and skills. Moreover, the policymaker can collect information regarding decision-making
procedures of these firms to understand their business opportunities (Acs et al. 2017). These
opportunities are depended mainly on skills and resources. In addition to this, this diamond
model further can help a firm to set certain goals or business objectives. This in turn can
influence companies to innovate new technologies. To attract foreign investors for more
investment, the policy maker can analyse each component of these four determinants deeply
for understanding the actual scenario. These determinants can be described as follows:
Factor conditions: Porter points out that the nation needs to generate some essential
production factors which the country does not possess. Thus, the concerned policy maker
needs to focus on human resources, knowledge resources and physical resources to improve
the comparative advantage of the country. Human resources are considered as one of the
essential factors of production. Thus, through skilled and efficient labours within production
system, the country can achieves comparative advantage (Tsiligiris 2018). Therefore, the
policy maker needs to focus on various skills developing programs for improving labour
condition in Kuwait. Knowledge resources also consider an important factor. Through
implementing proper knowledge in production process, Kuwait can obtain comparative
advantage. These firm can produce higher standard of products with comparatively lower
production costs. Physical resources also help a country to enjoy comparative advantage, as it
can help the country to establish proper infrastructure. Infrastructural facilities can help
companies to transport raw materials as well as final output to desired location easily.
Moreover, this sector chiefly focuses on electricity as well as construction sector, which are