Analysis of the External Market Environment

This article provides an analysis of the external market environment in Kuwait, including political, economic, technological, environmental, and legal factors. It also discusses how companies can gain a sustainable competitive advantage in the market.

Running head: ANALYSIS OF THE EXTERNAL MARKET ENVIRONMENT
ANALYSIS OF THE EXTERNAL MARKET ENVIRONMENT
Name of the Student
Name of the University
Author Note

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ANALYSIS OF THE EXTERNAL MARKET ENVIRONMENT
Answer to Question 1
The companies that have the plans to capture a new market are required to examine
the environment in which they wish to operate. The companies are provided with some major
resources by the external environment which can further be used for the purpose of operating
profitably. The analysis is mainly related to the environment related to marketing that is
prevalent in Kuwait. The middle eastern country Kuwait shares borders with other countries
like, Saudi Arabia and Iraq. Kuwait had received its independence in the year 2011 from the
various forces which were ruling the country. The various external factors are able to affect
the strategies that are formed by the company. The politics based situation that is present in
Kuwait is of disturbing nature (Abdulla, Naser and Saeid 2014).
The political parties which are present in Kuwait have an effect on policies that are
formed by the government of the country. Oil production is considered to be the most
important industry of Kuwait which helps in providing the highest level of income. The
economic situation of the country is able to affect the operations of an organization in
Kuwait. Kuwait had developed an economy which was closed in nature and the entry of new
organizations were not quite easy. The foreign direct investment was not prevalent in the
country and this had also affected the economy. The economy of Kuwait has gone through
some major reforms in the current years which has helped in increasing the foreign direct
investment in the country (Adegbite et al. 2018).
The expatriates from countries all over the world have entered the country for the
purpose of improving their standards of living. The citizens of the country are therefore not
satisfied with the situation that is present in Kuwait. The technologies that are used by the
organizations in Kuwait are supported by the Central Bank of Kuwait. Kuwait has not taken
aids from the other developed countries for the purpose of developing the technologies that

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ANALYSIS OF THE EXTERNAL MARKET ENVIRONMENT
are used by the organizations. The environmental situation has been affected by the huge
amounts of oil spills that are caused due to the industrial activities in the country. The legal
forces of Kuwait are also an important factor that affect the operations of various
organizations in the country (Albrecht et al. 2015). The various laws that have been
developed by the government of Kuwait need to be followed in an effective manner by the
organizations which already have their operations in the country.
The organization can take advantage of the changes that have recently taken place in
the economy of Kuwait. The government has taken many essential steps that have led to the
increase of the entry of new organizations in the country. The expatriates who are present in
the country can be recruited by the company so it is able to expand its operations. The major
resources that are required by the company to operate in Kuwait in a profitable manner are
the financial capabilities. The financial resources play an important role in providing the
company with a position that is required for the purpose of expanding successfully within the
country. The organizational operations are also a part of the resources that allow the company
to establish its business operations in Kuwait (Azhar 2014).
The products and the services that are offered to the customers acts as resources that
can help the company to operate in the competitive environment. The resources are thereby
capable of providing the company with an edge over the other organizations in the market.
The human resources are also important for creating successful operations of an organization
in the market. The company is thereby able to use the human resources to provide high levels
of services to the customers which has an effect on the position that it holds in the market.
The effective human resources can be created with the help of the recruitment of suitable
employees in different positions within the organizational operations (Biygautane, Hodge and
Gerber 2018).

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ANALYSIS OF THE EXTERNAL MARKET ENVIRONMENT
The strategies that are formulated by the company are important for creating their
position within the country. The market environment of Kuwait is emerging in nature and this
can help the company to succeed in its expansion related plans. The plans that are related to
expansion of company can be easily fulfilled with the help of adequate amount of resources
that have been gained by the company. The laws which are formed by the government affect
the operations of the company. The company can take advantage of the absence of taxes in
the country. The business opportunities that are provided by the country can be explored by
the company with the assistance of the resources that have been gained in the years of its
operations (Davcik and Sharma 2016).
The privatisation laws that have been developed by the government of the country can
help the operations of the company which plans to enter Kuwait. The competitive position of
the organization can be developed with the human resources and the financial resources as
well. The company capabilities and the resources can be helpful in the creation of a
competitive position in the industry. The external environment thereby plays an important
role in the maintenance of the competitive position of the company in the market. Kuwait has
developed a welcoming economy which can help the company to gain profits from the
expansion based plans. The company is also not liable to pay taxes to the government for the
income that is generated in the country (Gerges et al. 2016). This further helps in increasing
the profitability of the company in the country which can help in the making the expansion
plans to be successful.
Answer to Question 2
The organization that has plans to start operations in Kuwait has to possess major
advantages that can provide an edge over the others in the market. The company can gain a
sustainable competitive advantage in the market with the leadership in various factors which

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ANALYSIS OF THE EXTERNAL MARKET ENVIRONMENT
include cost, operations. The low cost which is established by the company helps in
decreasing the production based expenses. The organization can thereby provide lower prices
to the customers. The services and products can be offered to them at much low rates. This
will be helpful for the company to create a loyal customer base. The strategies that are
formulated by the company can help in the differentiation from other organizations that
operate in the industry (Jakob 2015).
The defensive strategy can also be helpful for the organization to maintain its
competitive advantage in the market in an effective manner. The company can further
implement differentiation strategy that can provide an edge over the other companies in the
market. The cost leadership strategy is a major part of the differentiation strategy that is used
by the companies. The resources which are developed with the help of alliances with other
organizations in the new market area like, Kuwait can be an important part of the creation of
sustainable competitive advantage. The effective sales channels of the company are helpful
for the successful operations in Kuwait (Kaleka and Morgan 2017).
The developing economy of the country is a major factor that will be able to affect the
operations of the company in this area. The company can also aim at gaining more financial
resources so that it can easily sustain its operations in the country. The knowledge of
employees is helpful in the development of sustainable competitive advantage in the market.
The competitive position of the organization can further be created with the assistance of the
strong name of the brand that has been developed over the years. The organization can easily
face the competition with the help of the brand name. The competition that is already present
in the market can be faced easily by the company which has the plans to enter the competitive
environment (Saeidi et al. 2015).

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ANALYSIS OF THE EXTERNAL MARKET ENVIRONMENT
The sustainability of competitive advantage plays an important role in creating a
position of the company which can further provide high levels of profitability. The expansion
of the organization in Kuwait will thereby help the company to increase its revenues and
profitability in the market in the most effective manner. The diverse economy will thereby
play the most important part in the helping the company to create a competitive position in
the market. The company can also aim at creating an effective workforce that can help in
providing the best experience to the customers (Sikora et al. 2016).
The improvement of customer experiences is effective in providing the sustainable
advantage that is required by the company to survive in the market. The organization can
thereby face the competitive rivalry in such a manner which can be helpful for the operating
in the environment. The customers are the most important component related to the success
of the company in the industry in which it operates. The organization thereby needs to create
a loyal group of customers for the purpose of maintaining a competitive advantage that is
sustainable in nature (Wagner III and Hollenbeck 2014).

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ANALYSIS OF THE EXTERNAL MARKET ENVIRONMENT
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