Strategies for Creating More Employment in Kuwait: Porter's Model

This essay examines strategies for creating more employment in Kuwait, a nation rich in oil reserves. It utilizes Porter's Diamond Model to analyze factors influencing national competitive advantage, including firm strategy, rivalry, demand and factor conditions. The study suggests enhancing firm capacity through technological advancements, business expansion, youth education, and mergers with multinational corporations (MNCs). The analysis highlights Kuwait's potential for foreign investment due to its favorable tax system and growing population, emphasizing the need for reduced corruption and a robust legal system. By implementing these strategies, Kuwait can attract MNCs, diversify its economy, and generate more employment opportunities.

Running head: STRATEGIES FOR CREATING MORE EMPLOYEMENT
STRATEGIES FOR CREATING MORE EMPLOYEMENT
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Introduction
Kuwait is an Arabic country consisting of the sixth largest oil reserves in the world. The
country has a huge share in the oil reserves making it one of the wealthiest nations in the world.
The country experienced a period of growth and prosperity since 1946 (Al-Hawary and Alajmi
2017). The country started public work by introducing a modern standard of living. The country
has become the largest oil exporter in the Persian Gulf region. This massive growth attracted
many foreign workers to migrate to this nation for work. The society is an open society and is
liberal in empowering women in their society. However, the trade limitation in Kuwait is focused
only in oil exports as the maximum revenue is drawn from this section. The growing nation has
many further options to increase their economy and expand their trading scopes by attracting
Multinational companies. The Kuwaiti dinar has a high value in international market hence
proving the economic stability of the country (Al-Shammari 2014). The country has further
scopes to expand their economic condition and increase their business by introducing MNC’s in
their country. The discussion will discuss about the determinants of national competitive
advantage that will attract MNC’s to the country. The study will discuss the determinants by
using the Porters diamond model.
The four strategy that effects the national competitive advantages are firm structure,
structure and rivalry, related supporting industries, demand condition and factor conditions.
Firm strategy
International and multinational companies have a high chance for trading in Kuwait. The
GCC has 5% tariff on the imported products. The income tax for foreign corporation is only 15%

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(Chadee, Roxas and Rogmans 2015). The commercial service has sufficient number of programs
and services to provide assistance to the U.S companies to get established in this growing
nations. However, the entry in Kuwait market must be taken with the assistance of competent
and tax counsel. They employ experienced workers with specialised experiences in industrial
background who can provide proper guidance and support to the industry. They have special
agency who will guide the emerging industry to the country with proper guidance and
information. The government has an excellent infrastructure that will attract the foreign
business to trade with the nation. They have a relaxed foreign exchange control(Al-Obaidi et al
2016). The taxation is also too low in the country, which attracts the international market to trade
with the nation. The individual taxation is also low which increases the scope for further
investments in business. This increases the scope of importing raw material and trading
opportunities for the domestic firms. There a sufficient raw cash in the hand of the business
person who can spend that money for further business. The supply of money has been controlled
by the government and subsidising the prices of general materials (Assaad 2014). Thus, the
country has enough cash flow for increasing their own business scope and market strategies and
at the same time they can it attracts foreign countries to trade with them. A leisure tax system,
flexible pricing and sufficient capital is present in this country (Marchi, Maria and Micelli 2013).
The most vital aspect for business growth are available in this nation thus allowing the foreign
countries to find better scope and opportunity to trade and expand in the country.
Population growth:
It is accounted that 70% of Kuwait’s population constitute 28-32% Kuwaiti’s. a growing
population means a growing nation. A growing population brings a growth tin the supply,
production and growth of the nation. The growing nation can provide support to the emerging

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industry. The nation has a good population level that supports the growth of the business in the
domestic and international market (Nosova 2018). A growing population also measn a greater
demand for products, this will enable th eMNC’s to create a proper demand for their products in
this market. However, the government must make sure there is a reduction in corruption and a
well- framed legal system is developed. The government should impose a strict restriction on
corruption to prevent a bad image of the company legal system. However, an increasing
population is always a better scope for emerging business to create a place in the market
(Heffernan 2014). The population in Kuwait is one of the major determinants that will attract
foreign traders to trade with the nation.
Rivalry:
The Kuwait market is focused on their oil export trade. They have very less interest or
expansion for other business scopes. The foreign countries that would like to emerge in this
country would have an ease to enter and trade as the international market in Kuwait is highly
flexible for foreign traders and has less changes of rivalry. The countries will face minimum
objections for trading in this nation. The country has special laws for the competitive projects.
The private sector of the country is yet to be covered by the nation itself. Hence, the scope for
competition in this field is very low (Jehanzeb, Rasheed and Rasheed 2013). The majority is
employed to the government sector. The country is recently opening its chances for private
sectors thus making way for domestic and foreign business to create their own demand in the
market. The MNC’s that would like to emerge into this market will not face a high risk of rivalry
or competition as there will be only a limited companies that will trade with this nation(Kuwait
Times 2018). The business will enjoy monopoly on the system and will have high change for
business expansion and profit.

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Demand and factor conditions:
The factors that affect the demand of product are income, taste, preference of the
products. The country has a high chance for foreign transaction and thus it is also creating a
demand for the products. The ease of trade and import has created a huge demand for the
products in Kuwait market. The emerging countries that are interested to trade with the country
will face a huge advantage in this field, as they will be able to meet the demand of the customers
in the country with a high profit scale for themselves(Madun Y.K.A). The unlimited resources in
the country are also an important factor to create a demand in the market (Behar and Mok 2013).
The oil export business increased the foreign relation of the country, thus creating a transactional
relation with the foreign country. This will enhance the scope for MNC’s to get attracted. The
country also has enough cash flow and disposable cash as they have very less taxations (Laszlo
and Zhexembayeva 2017). This will once again create a demand for foreign product and services
in the country. The MNC’s will have many scopes to enter the market and establish a business
organization in this country.
Strategies for enhancing the capacity of firm in the country:
Technology organization:
The government must emphasis on the gaps in technology field and create new types of
organization and system that would create a market and job opportunities. The franchise system
should be implemented as it leads to rapids proliferation of new business and job scopes in the
market. The technology should be developed further to create a demand for workers to access the
technology and systems in the industry. They should introduce latest technology and upgraded
version to assure quality production. The technology development will help the industry and

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company to raise their standard and at the same time increase the scope for employment
(Sharabati and Fuqaha 2014).
Expanding the business:
The companies must try to expand the business in different parts of the country. If the
business is expanded then the company would require more employees to work on those
branches. This would increase the scope for employment in the country. The companies must
have a vacancy for the skilled workers in each branches, hiring the skilled and trained workers
for this place. Thus, if the business gets expanded around the country then there are high chances
for the company to hire more employees thus creating employment for the countrymen.
Educating the youth:
The country should emphasis on the education of the growing generation. They must
make sure that the growing generation is updating themselves along with the developing
technology and strategies. This will make them fit to join the new emerging companies and the
existing companies and get employed there. The technical knowledge about the business and
current system is must for every child in the country. Thus, the country must stress on th
education system to create better opportunity for employment.
Merging with MNC’s:
The domestic business in the country can merge with the MNC’s or take franchise to
create their own scope of business in the country itself. The domestic business in the country can
merge with the foreign business and develop a branch in their own country. This will demand for
more workers for the branches thus, creating a demand for employment in the market. The

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businessperson can also take up franchise from the leading brands and open up branches in the
nation. This will once again create a demand for employees in the market.
Conclusion:
Thus, if the country follows such strategies it will create a demand for employment in
Kuwait market. The country has a high scope for foreign investment and MNC’s to invest in the
company. The relaxations and ease have been already mentioned in the study earlier. However, if
the mentioned measures are taken, the country will create more employment.

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