Challenges Faced by Small-Scale Emerging Industries

The assignment highlights the difficulties encountered by new companies in establishing themselves in the market due to lack of long-term goals, customer loyalty, and inability to keep up with technological advancements. It emphasizes the importance of setting proper management strategies, focusing on production and profit goals, and adapting to digital marketing trends to succeed in the Kuwaiti market.

Running head: IMPACT OF INTERNET AND TECHNOLOGY ON KUWAIT MARKET
Impact of Internet and Technology on Kuwait Market
Name of the Student:
Name of the University:
Author Note:

1IMPACT OF INTERNET AND TECHNOLOGY ON KUWAIT MARKET
Impact of internet and digital technologies on the five competitive forces in
Kuwait Market-
Threat of New Entrants:
The government has a strong vision on information and communication technology and
makes effort to promote the positive use of the technology. The Commercial Law 68 of 1980 of
Kuwait says that no foreign companies can establish any commercial activity in the country if it
has no recommendation of local agents or distributors (Kuwait Times, 2018). The distributor
promotes, imports, stocks and distributes products of foreign nations. They take huge amount to
promote the business that is not always affordable for the foreign companies. Thus, the
incorporation of internet and technologies has relieved the foreign companies to influence market
in Kuwait. It has been found that 91% people living in Kuwait have access to internet (Abdulla,
Naser and Saeid 2014). Thus, people get all information about a product or service through
online sources, cloud computing, television, news and media. Therefore, they start buying
products of foreign brands that they get through online marketing. Social media usage has also
been another marketing strategy for businesses reaching the larger population of Kuwait
(Vinerean et al. 2013). Rising demand for particular products and services, enable the
distributors or agents to demand lower amount of money from the foreign clients that accelerate
the business to enter the Kuwait market. Thus, technologies and internet has been very beneficial
to reduce the threat on new entrants to function in the market of Kuwait.
Threat of Substitutes:
Due to the rapid technological advancement, there is a continuous threat of substitutes for
the present businesses operational in the market of Kuwait. Digital revolution has led to massive

2IMPACT OF INTERNET AND TECHNOLOGY ON KUWAIT MARKET
change in both the nature of innovation and increasing pressure for the industries to innovate
ideas and methods continuously (Baden-Fuller and Haefliger 2013). This threat to the market has
been very effective to promote progress in the market situation of the country. However, such
threats have also affected the profit margins for various industries that are bound to provide free
services to the customers, which would otherwise get substituted. Due to the use of internet,
people are also accessing the online sites through which they are getting their desirables simply
sitting back at home. With the use of mobile phones, they are getting access to not only the
national market but also the global market (Labrecque et al. 2013). This has also affected many
running businesses who are now adapting free home delivery facilities to sustain in the market.
The online retailers are continuously engaging the customers by providing sales and discounts
that are attracting them. Thus, the Kuwait market is highly threatened by the rapid use of internet
and digital technology with an increasing number of substitutes in the market.
Bargaining power of customers:
The rapid use of technology has been promoting an integration of new businesses by
reducing the costs spent on communication processes. Thus, there is an increase in competitive
pressure for the businesses operational in the market. Due to the growing number of alternatives
in the market, the bargaining power of customers is increasing. The buyers switch to other sellers
if they get similar products in lower prices. Technology has led to greater innovation that has
increased the availability of substitutes in the market (Westerman, Bonnet and McAfee 2014).
Customers and consumers have gained greater bargaining power due to the instant access they
have to information and insights from social media platforms. They have knowledge of products
through the reviews and feedback and get ideas about the low switching costs through the digital
channels. Advanced technology has made the customers have an access to substitutes with ease

3IMPACT OF INTERNET AND TECHNOLOGY ON KUWAIT MARKET
and convenience. Thus, the customers have the power to weaken the sellers to sell their products
in a greater price. However, customer loyalty serves to be the solution to many sellers who have
the fixed customers who prefer their brands irrespective of the availability of substitutes
(Gilaninia, Taleghani and Azizi 2013). Kuwait as a whole has shown a massive improvement
with the impact of information and communication technology (ICT) on business innovations.
Thus, there has been an increase in mobile subscriptions and mobile coverage in the nation that
has elevated the role of the customers to influence markets. Therefore, due to digitalization and
growing use of technology the bargaining power of customers has also been increasing rapidly in
the Kuwait market.
Bargaining power of suppliers:
The bargaining power of suppliers has been significantly low for the market in Kuwait.
There has been an increase in the number of suppliers for products in the business market.
Digital marketing has led to greater scopes for businesses to supply their products through online
methods and applications (Chaffey and Ellis-Chadwick 2016). Thus, the suppliers have the fear
of getting replaced with new market tools. However, the switching cost from one supplier to
another is sometimes very high that makes the businesses to stick to their own supplier. In such
cases, there is a significant bargaining power of the suppliers. Considering the entire market
scenario of the Kuwait market, the presence of a huge number of suppliers has enabled the
companies to choose supplier according to the cost they can invest on them. However, due to
internet facilities and technological advancement, the suppliers also have greater access to find
out and connect with the emerging companies. Thus, they get the opportunity to choose
companies according to the profile. Considering the entire market, it can be concluded that the
bargaining power of the suppliers is quite low in the operational markets.

4IMPACT OF INTERNET AND TECHNOLOGY ON KUWAIT MARKET
Industry rivalry:
The use of internet and technology has led the businesses to have an access to the entire
world (Czinkota and Ronkainen 2013). Thus, it has led to the growing trend of international
trade according to the demands of the nations. Due to the improved methods, the buyers and
sellers of the world has been connected to merge at a point where they are getting desired
products at an agreed value. The use of internet has led to greater communication among the
buyers and sellers. However, it has led to a massive increase in rivalries among the companies.
The use of technology has enabled the emerging businesses along the older ones to operate
globally (Laudon and Traver 2013). Thus, the rivalries are on an increase, which simultaneously
leads the businesses to take risks in order to stabilize their positions in the market. The industries
are bound to spend a huge amount on promotional activities, CSR activities and advertisements
to compete with the other companies and attract the customers. Thus, though the digitalization
and technologies has brought scopes for industries to expand their businesses globally, it has
equally raised the competition among them enormously.
Threats to new entries of small-scale industries in Kuwait-
Preference for the primitive trends:
Most of the customers do not change their preferences of products with the change in
technology. They stay loyal to the old brands and deviates from trying new ones. In Kuwait, the
customers’ lack of interest in new products caused a downturn for the emerging industries or
new products in the market, as was manifested in the market of smart phones where people
seemed to stick to the use of blackberry phones with barely any switch to the other brands
(Doronin 2013).

5IMPACT OF INTERNET AND TECHNOLOGY ON KUWAIT MARKET
It is very important to incorporate knowledge about the adoption of newer brands in the
customers. They must be given free trials and through advertisements and workshops, they must
be awakened with the advantages that they can have using the new brands. They must be
informed about the updated versions of products that would enable them to accept the new
products brought in the market.
Lack of capital:
The industries operating in the Kuwait market have raised their capital investment to a
good extent. Competing with them requires the small-scale industries to raise their revenue in
such a way that they meet the level set by the existing ones. Thus, there are huge risks for the
companies to face huge loss that may ultimately lead to their declination.
The new industries thus need to create a good impression among the target customers so
that they do not incur loss. They must positively use new technologies and make investments in
advertisements, workshops and promotional activities to reach to the customers and create a
good customer base to operate successfully in the market (Eid and El-Gohary 2013).
Lack of long-term objectives:
The small-scale emerging industries lack long-term goals and just try to establish
themselves in the market scenario of the country. They make huge investments for that with no
proper strategy that ultimately lead to their collapse. They emerge with lack of skills and lack of
regulations in the production methods that disrupts the entire company.
Thus, it is very important for industries to come into the market with both short and long
term objectives set with a good management that serve to be the base. The management must be

6IMPACT OF INTERNET AND TECHNOLOGY ON KUWAIT MARKET
updating with all the procedures and feedback that the companies get from both the ends of
employees and customers that would enable the industries to perform in a collaborated and
effective way. The industries must focus on their production and profit goals that are very
essential to sustain in the market.
Lack of customer loyalty:
New companies do not have the advantage of customer loyalty. Thus, it becomes very
difficult for them to occupy places in the preference lists of customers. The consumers do not
and cannot trust any company that comes up in the market.
Thus, the companies need to take measures to popularize their products and services by
offering discounts, keeping low price for similar products that the established companies have
for their products, free trials and interesting offers to grow the consumer relations. This would
enable them to reach to the population at large and enable them to gradually gain the trust of the
consumers.

7IMPACT OF INTERNET AND TECHNOLOGY ON KUWAIT MARKET
References:
Abdulla, A.M., Naser, K. and Saeid, M., 2014. Employability factors of business graduates in
Kuwait: Evidence from an emerging country. International Journal of Business and
Management, 9(10), p.49.
Baden-Fuller, C. and Haefliger, S., 2013. Business models and technological innovation. Long
range planning, 46(6), pp.419-426.
Chaffey, D. and Ellis-Chadwick, F., 2016. Digital marketing. Prentice Hall
Czinkota, M.R. and Ronkainen, I.A., 2013. International marketing. Cengage Learning.
Doronin, D., 2013. Macro-level Market Research of Kuwait.
Eid, R. and El-Gohary, H., 2013. The impact of E-marketing use on small business enterprises'
marketing success. The Service Industries Journal, 33(1), pp.31-50.
Gilaninia, S., Taleghani, M. and Azizi, N., 2013. Marketing mix and consumer behavior. Kuwait
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8IMPACT OF INTERNET AND TECHNOLOGY ON KUWAIT MARKET
Vinerean, S., Cetina, I., Dumitrescu, L. and Tichindelean, M., 2013. The effects of social media
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