Saudi Arabia Economic Challenges for Business

This assignment examines the economic challenges facing businesses operating in Saudi Arabia. It presents a SWOT analysis of the Saudi Arabian economy, highlighting issues such as oil dependency, legal system limitations (Shariah law), inflation, currency fluctuations, and a high poverty level. The report concludes that while the construction industry holds potential, slow growth and limited diversification present significant hurdles for business success.

Management and Organization in Global Environment 1
Management and Organization in Global Environment
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Management and Organization in Global Environment 2
Table of Contents
Introduction......................................................................................................................................3
Economic SWOT analysis of Saudi Arabia.....................................................................................3
Conclusion.......................................................................................................................................4
Appendix..........................................................................................................................................4
References........................................................................................................................................5

Management and Organization in Global Environment 3
Economic Expansion in Saudi Arabia
Introduction
The report is based on the analysis done on the expression by the management board of the
construction company wanting to establish it business in Saudi Arabia. The establishment or
expansion of the company in Saudi Arabia has various setbacks that can cause poor performance
due to various economic reasons in the country.
Economic SWOT analysis of Saudi Arabia
The SWOT analysis of the Saudi Arabia economy indicates that the country is faced with
enormous challenges that will affect the industrial operation and development of the
organization. Some of the problems include; legal system “shariah” that is entirely dedicated
from Islamic religion, income drop due over dependency of oil by the government and its
estimated to 16.3% GDP deficit, and economy also lacks diversification in the market due to the
oil income dependency (Al-Rasheed, 2010).
Saudi Arabia economy is an oil and dependent, and it is estimated to control about 18% of the
world oil production. The construction industry in Saudi Arabia also has numerous setbacks such
inflation which impacts the company a lot of great resources while running its operations and
also the poor or falling currency of the country in the international market will be very bad to the
company’s income generation. Also, the population poverty level will exhibits a lot of low
market for company since very few major activities in construction and development are taking
place in the country (Altowaijri, 2011).

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Conclusion
According to the research and analysis did construction business one of the lists expected
businesses in Saudi Arabia that can be able to survive. The growth rate of the nation is very slow,
and also real estate business is not likely to generate any income due to the poverty level of the
population and lack of diversification in development activities (Bremmer, 2009).
Appendix
https://tradingeconomics.com/saudi-arabia/gdp-from-construction
The income generation to the construction to the government through the construction industry
has gone bad and that the also means the income to the industry has also been affected or become
worse according to the GDP statistics on construction industry in Saudi Arabia (Niblock and
Malik, 2007).

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References
Al-Rasheed, M., (2010). A history of Saudi Arabia. Cambridge University Press.
Altowaijri, H.A., (2011). Determinants of inflation in Saudi Arabia. World Review of Business
Research, 1(4), pp.109-114.
Bremmer, I.,(2009). State Capitalism Comes of Age: The End of the Free Market?. Foreign
Affairs, pp.40-55.
Niblock, T. and Malik, M., (2007). The political economy of Saudi Arabia. Routledge.