TMA: Business Level Strategy Report on Kuwait Retail Market Analysis

This report provides an in-depth analysis of business-level strategy within the Kuwait retail market. It begins by outlining the competitive landscape, emphasizing the dominance of the government's cooperative societies and the growing importance of private retailers and online platforms. The report then delves into the nature of competitive rivalry, discussing the impact of competitive forces and the application of Porter's Five Forces analysis. Key resources and capabilities, including financial, physical, technological, and human assets, are examined. The report then offers recommendations for creating sustainable competitive advantages, including understanding the target market, utilizing business and corporate-level strategies, conducting SWOT and PESTLE analyses, and implementing effective marketing mix strategies. The conclusion highlights the importance of competitive market analysis for retail companies seeking global growth and improved business operations.

qwertyuiopasdfghjklzxcvbnmqwe
rtyuiopasdfghjklzxcvbnmqwertyu
iopasdfghjklzxcvbnmqwertyuiopa
sdfghjklzxcvbnmqwertyuiopasdfg
hjklzxcvbnmqwertyuiopasdfghjkl
zxcvbnmqwertyuiopasdfghjklzxcv
bnmqwertyuiopasdfghjklzxcvbnm
qwertyuiopasdfghjklzxcvbnmqwe
rtyuiopasdfghjklzxcvbnmqwertyu
iopasdfghjklzxcvbnmqwertyuiopa
sdfghjklzxcvbnmqwertyuiopasdfg
hjklzxcvbnmqwertyuiopasdfghjkl
zxcvbnmqwertyuiopasdfghjklzxcv
bnmqwertyuiopasdfghjklzxcvbnm
qwertyuiopasdfghjklzxcvbnmqwe
rtyuiopasdfghjklzxcvbnmrtyuiopa
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
1

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).
2

Business level strategy
Intensity of rivalry: The retail companies are engaged in the bottleneck and high competition.
Apart from this, the large number of companies in this industry imposes strong and high rivalry
in retail industry and they are usually engaged in price war (Rothaermel, 2015).
Resources and capabilities: The resources and capabilities play a significant role to increase
and maximize the sale and outcome of the retail companies. The resources are considered the
assets of the company through which the organization has been able to carry out the business
activities and functions smoothly (Rintamäki, Kuusela and Mitronen, 2007). There are ample of
resources used by the retail companies to beat the competitors that include financial, physical,
technological, human and reputational. In addition, capabilities or capacities are undertaken by
the retail companies for a specific activity. Aside this, the core competencies are play a
fundamental and dynamic role to a company’s performance and strategy. The capabilities are
dynamic and complex patterns of skills and talents in using resources to companies’ competitive
benefits. The retail industry core capabilities include teamwork, decision making,
communication, commitment, dignity, responsibility, career motivation and leadership. The core
capabilities help the retail companies to make a dynamic image in the minds of the customers.
Furthermore, it also helps in attaining desired goals and objectives in Kuwait. Beside this, retail
industry sets the capabilities to execute its business model and achieve long term mission and
vision. Apart from this, organization capabilities also focus on the abilities of the business to
meet the needs, requirements and demands of the customers. Effective and unique strategies
shall be made by the retail industry to cope up with rivalries in a large extent (Helfat et al, 2009).
2. Recommendations to create sustainable competitive advantage
The ample of strategies can be used by the companies to create a competitive advantage in the
international market. Some of the strategies that can help the firm to attain rivalries benefits are
detailed below.
 It has been found from the various analysis that the retail companies should understand
the target market audience to maximize the results. Furthermore, it must also focus on the
segmentation, targeting and positioning strategy to cover entire market internationally.
Apart from this, the retail industry must also focus on the strategies, plans and policies of
the competitors widely. The retail company should develop and improve an
3

Business level strategy
understanding of what customers want actually and set a value proposition that grabs
their attention. The organization should also design and develop a business model to
support and render the value proposition. Effective decisions shall be taken by the retail
companies after considering the requirements and needs of the business widely.
 Further, it is stated that retail companies must also use business level strategies to fulfill
the long term demands and needs of the business and customers as well. The business
level strategies include cost leadership, differentiation, focused low cost, and integrated
low cost and focused differentiation. These strategies also help the companies to set the
appropriate prices of the retail products and services in the competitive market.
 The retail companies should also initiate the corporate level strategies to create value in
the eyes of the target audience worldwide. The corporate level strategies are initiated
throughout the entire organizational structure. Furthermore, the corporate strategy also
includes the careful analysis of the selection of the businesses that the firm can
effectively and successfully compete with rivalries globally. The corporate level
strategies include cost leadership, focus and differentiation strategy (Esty and Winston,
2009).
 SWOT analysis shall be done by the retail companies to analyze and identify the
opportunities and threats of the market. Further, it also helps in measuring the risks and
challenges of the market. Pestle analysis is also done by the firm to know and understand
the market condition in the Kuwait. No company can survive and grow its business
activities without using SWOT and pestle analysis. In this way, the retail companies have
been able to attain the maximum level of outputs in the marketplace (Kaplan and Norton,
2008).
 Aside this, marketing mix strategy must be used by the retail companies to grab the entire
market and maximize the customers largely. In this way, the companies have been able to
stand out against the competitors in the international market. Beside this, porter diamond
model also shall be used by retail corporations to beat the rivalries and accomplish the
targets and goals. It will also help in flourishing and exploring the business function
widely. All these strategies can be used by retail companies in Kuwait to analyze the size
and nature of the market.
Conclusion
4

Business level strategy
It concludes from the above mentioned event that analysis of the competitive market effective
and unique for the retail companies grow business globally. The paper also explains that how
retail industry can enhance and improve the business operations widely.
5

Business level strategy
References
Bmiresearch.2018. Kuwait consumer & Retail report [Online]. Available from
https://store.bmiresearch.com/kuwait-consumer-retail-report.html [Accessed as on 5th July
2018].
Capitalstandards.2010. Kuwait retail industry [Online]. Available from
http://www.capstandards.com/CSR_Kuwait-Retail-Industry_July2010.pdf [Accessed as on 5th
July 2018].
E-marmore.2015. Kuwait Luxury Retail [Online] Available from
https://www.e-marmore.com/Reports/Industry-Research/Retail/Kuwait-Luxury-Retail [Accessed as on
3rd July 2018].
Esty, D. and Winston, A., 2009. Green to gold: How smart companies use environmental
strategy to innovate, create value, and build competitive advantage. John Wiley & Sons.
Helfat, C.E., Finkelstein, S., Mitchell, W., Peteraf, M., Singh, H., Teece, D. and Winter, S.G.,
2009. Dynamic capabilities: Understanding strategic change in organizations. John Wiley &
Sons.
Kaplan, R.S. and Norton, D.P., 2008. The execution premium: Linking strategy to operations for
competitive advantage. Harvard Business Press.
Morden, T., 2016. Principles of strategic management. Routledge.
Oxfordbusinessgroup. 2017. Retail [Online]. Available from
https://oxfordbusinessgroup.com/kuwait-2017/retail [Accessed as on 5th July 2018].
Porter, M.E., 2011. Competitive advantage of nations: creating and sustaining superior
performance (Vol. 2). Simon and Schuster.
Ramady, M.A., 2013. Political, economic and financial country risk. Springer, New York, NY
Google Scholar.
6

Business level strategy
Rintamäki, T., Kuusela, H. and Mitronen, L., 2007. Identifying competitive customer value
propositions in retailing. Managing Service Quality: An International Journal, 17(6), pp.621-
634.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.
7