Diamond of National Advantage

Business level strategies focus majorly upon the fact that customers need should be fulfilled in order to achieve maximum return. Business level strategies are used so that maximum gain could be offered in the core competencies. Business level strategy is concerned with the fact that firm position could be maintained. In this report, the case of Kuwait is considered. It is one of the Middle East countries that gain maximum income through petroleum industry (Soroush and Al-Yakoob,2018). They make sure that customers need are satisfied Organizations must determine how to bundle resources and capabilities to form core competencies and then use these core competencies to satisfy customer needs by implementing value-crating strategies.

There are companies and organisation that make investment in other company so that they can build a string brand image that will help them to capture market. Foreign direct investment is an investment that is used by companies to build up their image in a particular region (Megginson and Sitorus, 2017). The effect of globalisation has impacted the companies in many ways thus foreign direct investment has become one of the necessity. The business has started using advanced technologies and also makes sure that innovation is done according to the market needs so that their performance could be enhanced. Innovating new ideas and meeting marketing requirements so that they can expand their business in domestic and international market (Megginson and Sitorus, 2017). FDI is one of the important terms that support the business to enhance their GDP and is a significant attribute that promotes growth of an organisation. Thus, it is suggested that companies should make investment at regular interval so that they can capture market by gaining interest of many multinational companies’ so that they make investment in their country (Kharub and Sharma, 2016).

Kuwait is a one of the richest country whose economy is based on petroleum industry as the export of petroleum is done from this country. It has highest value unit across the globe that helps the country to increase their profit margin. If calculating using per capita income it was found that it is seventh richest country (Kharub and Sharma, 2016). Additionally, if calculating by using the GCC it was found that it is the second largest country after Qatar. The major reason behind this success is income gained through petroleum industry. The 85% of government income is due to the export work of petroleum along with 50% of countries GDP in Kuwait is due to petroleum. The other industry that contributes in the income is financial services (Krishna, Ojha and Barrett, 2017).

The success of Kuwait is due to the fact that they regularly monitor and update their foreign direct investment policies and laws. The FDIs has increased with time and the reason behind this encouragement is decline in the overall oil revenue as well as diversified requirement of economy (Modarress, Ansari and Thies,  2016). It is not only due to foreign direct investment, various initiatives were taken by the government of Kuwait so that they can retain the countries to invest in their country. New laws and policies were designed so that the interest of countries is captured. Some of the theories and framework that were used by the country to retain FDI are analysed below by using application of diamond national advantage theory (Khan, Al-Awadi and Al-Rashidi, 2016).

Overview of Diamond of National Advantage Theory

This theory showcases the benefits that will be gained by the country if they make investment. The major goal of this theory is to show the importance that home country will gain after making investment in the global market (Khan, Al-Awadi and Al-Rashidi, 2016).

Determinates that are defined in diamond of national advantage theory- The four major attributes or determinates that are used in this theory is firm strategy, structure and rivalry, home demand conditions, related and supporting industries and some of the factor condition.

The factors of production cover the production labour and the available natural resource. The infrastructure that is used by the country plays an important role (Castro-Gonzáles, Peña-Vinces and Guillen, 2016). The objective is to attract companies so that they invest in the country, for this many steps are taken like government has started up many policies to increased FDI. The reason behind their success is presence of natural resources and reduction in the revenue. It is observed from the last years, country has planned to increase their profit margin by starting financial services so that performance of the country can be improved (AL-QALLAF, Owayed and Rao,  2018).

The demand need to be analysed so that steps could be taken accordingly. The demand is analysed by considering home market and then programs and policies are defined so that performance could be improved. The analysis helps the home country to improve their loopholes and design new opportunities so that brand image could be improved. If the demand of product in the domestic market is high it will help the company to make their place in the international market (Rinker, et. al, 2016). Kuwait has made its position in the market by attracting the foreign countries to invest in them.

Kuwait is one of the large exporters of oil industry and has also gained a good position and brand image in the market (Coyle, et. al, 2017). There are various secondary sources through which company gains the income, one such is the financial service and information technology industry. It is observed that growth of petroleum industry is directly related to other industries.

Each countries has some attributes that make them unique from other countries, attribute can be in the form of natural resources, availability man power, technological power and the demand in the market. If Kuwait is compared with other countries it is found that petroleum industry have opened up doors for many other things like it has increased employment opportunities for people that have helped to acquire global position in the market (Coyle, et. al, 2017).

New policies are designed so that several issues could be addressed. Policies are designed to resolve the issues like economic growth and unemployment. The petroleum industry has helped Kuwait to improve their other business like manufacturing, transportation and financial services (Rinker, et. al, 2016). As it was found that oil industry can decline any day thus it is important to start up other industries. Due to this reason, government of Kuwait has developed various industries so that many companies could be attracted towards FDI. In order to match up with other countries they build by new strategies so that they can expand their services in the global market. Some of the strategies that are designed are:

• Innovating new ideas- This is one of the reason behind the success, the ideas need to be generated so that sustainable development takes place. Kuwait is a Middle Eastern country that has a wide range of natural resources (Sorin-George,  Paul and Cosmin, 2015).  Country has made use of these resources in an effective manner but still government should make use innovative ideas to build more opportunities. The government has encouraged innovating new and creative ideas so that it can match the global standards.
• Immigration Reform- There is various job opportunities in Kuwait, due to this reason various individual try to get jobs in the country. Kuwait government is making investment in other industries so that opportunities can be increased for the immigrants (Sorin-George,  Paul and Cosmin, 2015). The reason to increase immigration is that intelligent and capable immigrants can be used so that other industries could be set up in the country.
• Eliminating unclear laws and policies- There are various policies and laws that have an unclear vision and poor objective, such laws need to be removed so that business could expand in the global market. Thus, it is recommended that laws with unclear vision should be removed so that industry could expand in the global market.
• Development of infrastructure-The foreign direct investment can be boosted by changing the infrastructure regularly. Modifying the infrastructure will help the country to get investors from different parts of the country. Thus, from the research it can be concluded that to retain the investor’s regular development is required. Changing the infrastructure will help in gaining more customers and on the other make sure that established customers are retained. To gain positive outcome the list of production process is used. The factor covers communication system, training and development system for the labour staff and sessions to improve the business trends. This is the reason which has made Kuwait successful in the global market as it makes sure that all the resources are used. It is just possible due to internet and use of advanced technology (Harzing and Giroud, 2014).

References

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Castro-Gonzáles, S., Peña-Vinces, J.C. and Guillen, J., 2016. The competitiveness of Latin-American economies: Consolidation of the double diamond theory. Economic Systems, 40(3), pp.373-386.

Coyle, S., Connolly, J., Sabourin, M., McNamara, E., Curran, K., Condell, J. and Diamond, D., 2017. Textile sensor glove for health monitoring–Application in home assessment of Rheumatoid Arthritis. Health.

Harzing, A.W. and Giroud, A., 2014. The competitive advantage of nations: An application to academia. Journal of Informetrics, 8(1), pp.29-42.

Khan, A.R., Al-Awadi, L. and Al-Rashidi, M.S., 2016. Control of ammonia and urea emissions from urea manufacturing facilities of Petrochemical Industries Company (PIC), Kuwait. Journal of the Air & Waste Management Association, 66(6), pp.609-618.

Kharub, M. and Sharma, R.K., 2016. Investigating the role of porter diamond determinants for competitiveness in msmes. International Journal for Quality Research, 10(3).

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Sorin-George, T., Paul, M. and Cosmin, ?., 2015. The World’s Largest Oil and Gas Companies in the Period 2013-2014. Ovidius University Annals, Series Economic Sciences, 15(1)

Soroush, H.M. and Al-Yakoob, S.M., 2018. A maritime scheduling transportation-inventory problem with normally distributed demands and fully loaded/unloaded vessels. Applied Mathematical Modelling, 53, pp.540-566.