Business level strategy

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Business level strategy

Business level strategy
Introduction
The primary motive of this paper is to outline the significance of the competitive market. The
retail industry has been chosen in the task to outline the market of Kuwait. In addition, here is the
discussion about the strategies that can help the company to attain competitive advantages in the
international market.
1. Nature of competitive rivalry and competitive forces
The Kuwait retail sector is primarily controlled and managed by the Government’s union of
cooperative societies. This union entails grocery stores, convenience stores, hypermarkets and
supermarkets. Let’s talk about the private retailers, they are limited to operate and manage
mainly within commercial fields. Retail industry is an effective element in shaping the economic
structure of the country especially in terms of retail sales and consumer goods. Apart from this,
the country has ranked high in retail industry that helps in attracting the maximum number of
customers in the global market. The major retail segments in the country include consumer
electronics, watches, jewelry, automobiles, handbags, cosmetics, and accessories. The online
retail medium is also flourishing and growing highly at around 11.4% CAGR and it is estimated
to be worth over USD 1bn by 2020 (E-marmore, 2015). It is noted that there is high and fierce
competition in retail industry in Kuwait that affect the growth and success of the retail sector
companies. Furthermore, retail market also have influenced the buying and selling operations
and activities in the global market. In today’s era, the competition is increasing and enhancing in
retail industry in Kuwait to gain share in the marketplace. It also helps the retail companies to
gain the competitive benefits in the international market. The products offering by the retail
companies in the country are unique and effective that help in differentiate the products from the
competitors. Every person demands for the retail products in the competitive market to live the
life happily (Ramady, 2013). Beside this, the retail industry in the country is expected to be
positively affected by the overall market and demographically trend that are fixed to favor the
retail industry in the country. The country is small market for the retailers due to its small
population size. Thus, high levels of urbanization, household and disposable spending mean
there are opportunities especially in the high end segment. The foreign brands also have been
raised in the country thus the retail companies have been able to capture the entire market
internationally (Bmiresearch.2018). It is noted that Kuwait retail sector is growing rapidly over
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Business level strategy
the last 10 years (Oxfordbusinessgroup, 2017). This sector in the country has experienced a vital
and empirical growth in a large extent. The retail industry is considered the second biggest sector
in terms of size after the oil sector in the GCC (Gulf cooperation council) region
(Capitalstandards, 2010). The retail companies in the country are listed within the KSE’s service
sector. There are around 7 retail companies listed with enormous activities and size from 59
companies in the service industry (Capitalstandards, 2010).
It has been found that competitors may influence the targets and progress of the companies in
Kuwait. Thus, porter five forces analysis is done to strive and compete with competitors in the
marketplace (Porter, 2011). The porter five forces analysis for retail sector in Kuwait are
discussed bellow.
Threats of new entrants: It is stated that retail industry is facing strong and unique forces of
threats from the new entrants. This is done because new entrants can easily enter in the global
market and further they initiate the business activities and operations at lower rate. Thus, strong
retailers can strive with existing retail companies in terms of convenience, specialty and locality
(Morden, 2016).
Threats of substitutes: It is noted that substitute of retail products are easily available in any
industry. The threats of substitutes also exist among the existing companies that affect the
profitability of the organizations. There is a variety of products in the retail sector and there is no
other ways to move it easily.
Bargaining power of buyers: It is stated that bargaining power is high and strong in the hands
of the buyers. Furthermore, the individual purchase amount is too small. Thus, there is a weak
pressure that buyers can impose in the retail industry.
Bargaining power of suppliers: There is maximum number of suppliers in the retail industry.
Hence, it can direct affect the sales and revenue of the retail companies. Due to high competition
among the suppliers and availability of the suppliers make it complex for them to influence the
retail industry globally (Morden, 2016).
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