Business Level Strategy: An Analysis of Kuwait's Success through Diamond of National Advantage Theory

This report analyzes the success of Kuwait's petroleum industry and its use of foreign direct investment to attract multinational companies. It also applies the Diamond of National Advantage theory to suggest strategies for business level success. The report recommends innovating new ideas, immigration reform, eliminating unclear laws and policies, and developing infrastructure to retain investors and expand services in the global market.

Business level Strategy

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Table of Contents
Introduction...........................................................................................................................................1
Diamond of National Advantage...........................................................................................................1
Overview of diamond of national advantage theory..............................................................................3
References.............................................................................................................................................8

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Introduction
Business level strategies focus majorly upon the fact that customers need should be
fulfilled in order to achieve maximum return. Business level strategies are used so that
maximum gain could be offered in the core competencies. Business level strategy is
concerned with the fact that firm position could be maintained. In this report, the case of
Kuwait is considered. It is one of the Middle East countries that gain maximum income
through petroleum industry (Soroush and Al-Yakoob,2018). They make sure that customers
need are satisfied Organizations must determine how to bundle resources and capabilities to
form core competencies and then use these core competencies to satisfy customer needs by
implementing value-crating strategies.
Diamond of National Advantage
There are companies and organisation that make investment in other company so that
they can build a string brand image that will help them to capture market. Foreign direct
investment is an investment that is used by companies to build up their image in a particular
region (Megginson and Sitorus, 2017). The effect of globalisation has impacted the
companies in many ways thus foreign direct investment has become one of the necessity. The
business has started using advanced technologies and also makes sure that innovation is done
according to the market needs so that their performance could be enhanced. Innovating new
ideas and meeting marketing requirements so that they can expand their business in domestic
and international market (Megginson and Sitorus, 2017). FDI is one of the important terms
that support the business to enhance their GDP and is a significant attribute that promotes
growth of an organisation. Thus, it is suggested that companies should make investment at
regular interval so that they can capture market by gaining interest of many multinational
companies’ so that they make investment in their country (Kharub and Sharma, 2016).

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Kuwait is a one of the richest country whose economy is based on petroleum industry as the
export of petroleum is done from this country. It has highest value unit across the globe that
helps the country to increase their profit margin. If calculating using per capita income it was
found that it is seventh richest country (Kharub and Sharma, 2016). Additionally, if
calculating by using the GCC it was found that it is the second largest country after Qatar.
The major reason behind this success is income gained through petroleum industry. The 85%
of government income is due to the export work of petroleum along with 50% of countries
GDP in Kuwait is due to petroleum. The other industry that contributes in the income is
financial services (Krishna, Ojha and Barrett, 2017).
The success of Kuwait is due to the fact that they regularly monitor and update their foreign
direct investment policies and laws. The FDIs has increased with time and the reason behind
this encouragement is decline in the overall oil revenue as well as diversified requirement of
economy (Modarress, Ansari and Thies, 2016). It is not only due to foreign direct
investment, various initiatives were taken by the government of Kuwait so that they can
retain the countries to invest in their country. New laws and policies were designed so that
the interest of countries is captured. Some of the theories and framework that were used by
the country to retain FDI are analysed below by using application of diamond national
advantage theory (Khan, Al-Awadi and Al-Rashidi, 2016).
Overview of diamond of national advantage theory
This theory showcases the benefits that will be gained by the country if they make
investment. The major goal of this theory is to show the importance that home country will
gain after making investment in the global market (Khan, Al-Awadi and Al-Rashidi, 2016).

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Determinates that are defined in diamond of national advantage theory- The four major
attributes or determinates that are used in this theory is firm strategy, structure and rivalry,
home demand conditions, related and supporting industries and some of the factor condition.
(Source: https://www.themanager.org/2015/01/porters-diamond-national-advantage/)
The factors of production cover the production labour and the available natural resource. The
infrastructure that is used by the country plays an important role (Castro-Gonzáles, Peña-
Vinces and Guillen, 2016). The objective is to attract companies so that they invest in the
country, for this many steps are taken like government has started up many policies to
increased FDI. The reason behind their success is presence of natural resources and reduction
in the revenue. It is observed from the last years, country has planned to increase their profit
margin by starting financial services so that performance of the country can be improved
(AL-QALLAF, Owayed and Rao, 2018).
Demand condition

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The demand need to be analysed so that steps could be taken accordingly. The demand is
analysed by considering home market and then programs and policies are defined so that
performance could be improved. The analysis helps the home country to improve their
loopholes and design new opportunities so that brand image could be improved. If the
demand of product in the domestic market is high it will help the company to make their
place in the international market (Rinker, et. al, 2016). Kuwait has made its position in the
market by attracting the foreign countries to invest in them.
Some related and supporting industries
Kuwait is one of the large exporters of oil industry and has also gained a good position and
brand image in the market (Coyle, et. al, 2017). There are various secondary sources through
which company gains the income, one such is the financial service and information
technology industry. It is observed that growth of petroleum industry is directly related to
other industries.
Organizational strategy, structure and rivalry
Each countries has some attributes that make them unique from other countries, attribute can
be in the form of natural resources, availability man power, technological power and the
demand in the market. If Kuwait is compared with other countries it is found that petroleum
industry have opened up doors for many other things like it has increased employment
opportunities for people that have helped to acquire global position in the market (Coyle, et.
al, 2017).
Policies used to improve the overall capacity of industry
New policies are designed so that several issues could be addressed. Policies are designed to
resolve the issues like economic growth and unemployment. The petroleum industry has

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helped Kuwait to improve their other business like manufacturing, transportation and
financial services (Rinker, et. al, 2016). As it was found that oil industry can decline any day
thus it is important to start up other industries. Due to this reason, government of Kuwait has
developed various industries so that many companies could be attracted towards FDI. In
order to match up with other countries they build by new strategies so that they can expand
their services in the global market. Some of the strategies that are designed are:
 Innovating new ideas- This is one of the reason behind the success, the ideas need to
be generated so that sustainable development takes place. Kuwait is a Middle Eastern
country that has a wide range of natural resources (Sorin-George, Paul and Cosmin,
2015). Country has made use of these resources in an effective manner but still
government should make use innovative ideas to build more opportunities. The
government has encouraged innovating new and creative ideas so that it can match the
global standards.
 Immigration Reform- There is various job opportunities in Kuwait, due to this
reason various individual try to get jobs in the country. Kuwait government is making
investment in other industries so that opportunities can be increased for the
immigrants (Sorin-George, Paul and Cosmin, 2015). The reason to increase
immigration is that intelligent and capable immigrants can be used so that other
industries could be set up in the country.
 Eliminating unclear laws and policies- There are various policies and laws that have
an unclear vision and poor objective, such laws need to be removed so that business
could expand in the global market. Thus, it is recommended that laws with unclear
vision should be removed so that industry could expand in the global market.
 Development of infrastructure- The foreign direct investment can be boosted by
changing the infrastructure regularly. Modifying the infrastructure will help the

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country to get investors from different parts of the country. Thus, from the research it
can be concluded that to retain the investor’s regular development is required.
Changing the infrastructure will help in gaining more customers and on the other
make sure that established customers are retained. To gain positive outcome the list of
production process is used. The factor covers communication system, training and
development system for the labour staff and sessions to improve the business trends.
This is the reason which has made Kuwait successful in the global market as it makes
sure that all the resources are used. It is just possible due to internet and use of
advanced technology (Harzing and Giroud, 2014).

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References
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Castro-Gonzáles, S., Peña-Vinces, J.C. and Guillen, J., 2016. The competitiveness of Latin-
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Coyle, S., Connolly, J., Sabourin, M., McNamara, E., Curran, K., Condell, J. and Diamond,
D., 2017. Textile sensor glove for health monitoring–Application in home assessment of
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