Application of Porter's Diamond National Advantage Theory for FDI in Kuwait

Running Head: Business Level Strategy
Business Level Strategy

Business Level Strategy 1 | P a g e
Table of Contents
Diamond of National Advantage......................................................................................................................... 2
Recommendations for Kuwaiti government................................................................................................. 3
References.................................................................................................................................................................... 5

Business Level Strategy 2 | P a g e
Diamond of National Advantage
FDI (foreign direct investment) is considered as a type of investment which is made by one
company situated in other than the country of investing company. This investment is
considered as an effective tool for growth and development for the developing countries
and in relation to this, developing countries invest a huge amount of their national income
in making the country’s infrastructure attractive as well as effective through which
multinational corporations from different nations could be attracted and invest in their
countries. Due to globalisation, tech-revolution and introduction of internet, drastic
changes have been observed in the functionalities of business entities at international level.
These factors have been the major determinants for the organizations to expand their
businesses in the international market. FDI have become a necessary part of GDP for the
developing countries and in relation to this, these countries regularly take relevant steps in
order to attract FDIs especially from developed countries (Grant, 1991).
Even as the world has observed increasing number in GDP numbers and growth in the
trade, although, global flows of FDIs fell by 16% in 2017 which is estimated to $1.52
trillion. In 2016, global flows of FDIs stood at $1.81 trillion. FDIs in the developed countries
were decreased in the last year and at the same time; FDIs in the developing economies
were increased. The increase in the FDIs in the developing economies has helped them to
pace up towards sustainable development and growth. Despite the decrease in the FDIs in
the developed countries, United States stood at the leading position in the list of highest
global FDIs i.e. $311 billion followed by $1.44 billion in China.
In this report, FDI structure and the requirement of FDI in Kuwait will be discussed by
application of the Porter’s Diamond National Advantage theory. In the second part of the
report, appropriate policies will be discussed which could be adopted by the government in
order to enhance the capacity of their industries in terms of innovation and upgradation
(International Trade Administration, 2017).
Kuwait is one of the biggest exporters of petroleum products and with the help of this;
Kuwait has been able to acquire seventh position in the list of leading millionaire countries