Business Level Strategies of Kuwait Samples †MyAssignmenthelp.com

Question: Discuss about the Business Level Strategies of Kuwait. Answer: Impact of internet and digital technologies on five competitive forces Kuwait is one of the leading economies in the Middle Eastern regions. They are rapidly developing in terms of the economy and with the inflow of the foreign direct investments; they are becoming more accustomed with the globalization. One of the major changes they are witnessing in the recent time with the development of the economy is the growing popularity of internet and digital technologies (Andre Cavalcante 2013). These factors are having various impacts on the competitive environment of Kuwait. The following sections will discuss about the five competitive forces impacted by internet and digital technologies. Threat of new entry Initiation of the internet and other online digital medium has opened huge sources of business opportunities in every sector. Thus, the threat of entry got increased with the initiation of internet and digital technologies (Gupta, Goktan and Gunay 2014). This is due to the reason that in past, business organizations has to deal with only the traditional competitors, but in the current scenario they also have to deal with the virtual competitors or digital mediums. Thus, the competitors got increased. In the case of Kuwait, the impact of internet and digital technologies is more due to the reason that Kuwait is having high market penetration of these technologies. According to the reports, more than 70 percent of the total population of Kuwait is having access to the internet. Thus, the market area is also more for the online and digital mediums. This along with the increased less cost and capital involved in doing business through online mediums are amplifying the threats of new entrants in the market (Drnevich and Croson 2013). Another key impact of internet and digital technologies in increasing the threat of new entrants is the reduction in the traditional barriers in starting new businesses. The next competitive force is the threat of substitutes. This denotes the availability of the substitute products in the market for any particular product. The more will be availability of the substitute products, the more will be the intensity of the competition in the market. One of the major impacts of the internet and digital technologies in Kuwait is increasing the intensity of the threat of substitutes (Schwenger, Straub and Borzillo 2014). This is due to the reason that with the help of the online mediums, more options are coming to the customers. Moreover, with the help of the internet and digital technologies, switching cost for the customers also got reduced, which further increased the threat of substitutes in the market. For instance, before the boom of the internet in Kuwait, shopping in traditional and offline means was the only option for the customers. Thus, the intensity of the substitute products was also low. However, in the current time, online shopping is attracting huge customers. According to the recent survey, trend of online shopping is growing rapidly in Kuwait. Thus, the traditional and offline retailers are facing the threat of online substitutes and thus, the threat of substitute got increased with the initiation of internet and digital technologies. Bargaining power of the customers Bargaining power of the customers refers to the extent to which buyers are having the upper hand in bargaining with the sellers in the market. With the initiation of the online technologies and internet, customers are now having number of options to gather information regarding any products. One of the major contributions of the internet and digital technologies in increasing the bargaining power of the customers is the growing penetration of social media networks in Kuwait (Lee, Mun and Park 2015). Social media platforms are one of the major scopes of gaining diverse knowledge about anything. Thus, in the current time, customers are having more knowledge about the availability of the products in the market and their details. Customers are now having the option to choose their product by gathering information more effectively through online. Kuwait is having one of the largest market penetrations in the entire Middle Eastern regions. They are just behind UAE in terms of penetration of Facebook. Thus, with the help of these social media platforms, customers are gaining the upper hand in bargaining with the sellers with having all the market knowledge in hand. Bargaining power of the suppliers Bargaining power of the suppliers refers to the influence of the suppliers in determining the business operation and pricing strategy of the organizations. In the traditional case, majority of the suppliers were having the upper hand and positive bargaining power in Kuwait. This is mainly due to the reason that Kuwait is having limited source of resources for the business organizations (Moatti et al. 2015). Thus, organizations are more dependent on the suppliers. However, with the initiation of the internet and digital technologies, business organizations are being able to connect with the global vendors more effectively. Thus, their dependence on the domestic suppliers is reducing and this in turn is reducing the bargaining power of the suppliers. In addition, with the help of the internet and online mediums, business organizations are also leveraging the benefits of having diverse information about the suppliers before dealing with them. Industry rivalry Initiation of the internet and digital technologies is helping the business organizations to have more marketing opportunities through the online mediums. With the help of the online mediums, Kuwaiti organizations are promoting their offerings in the international market. Thus, their business opportunities are increasing (He, Zha and Li 2013). On the other hand, initiation of the internet also enables the business organizations to initiate digital platforms to have marketing effectiveness over their competitors. With the availability of the low cost and widely accessible digital platforms, the marketing strategies of the Kuwaiti organizations are now more holistic and complete. They are having more options to compete with their competitors and thus the industry rivalry is increasing in the Kuwait business environment. Having fewer barriers in the online mediums is also increasing the using of the digital mediums in competing in the market. Four threats of entry to new entrants in small scale entrepreneurship: Risk of investment Entering in the small scale entrepreneurship involves a certain amount of capital investments. However, in the case of the Kuwait, there is a certain level of risk involved in the investment (Bolton, Chen and Wang 2013). This is due to the reason that majority of the economy of Kuwait depends on the export of oil, which is non-renewable source. Thus, reduction in the export of oil will have negative implications on the whole economy and the business sectors will get negatively impacted. Thus, the return on the investments may not be positive. It is recommended that government of Kuwait should initiate different business opportunities in order to increase the diversity of the business sector. This will reduce the dependency on the oil sector. Risk of terrorism Kuwait is located in the Middle Eastern region, which is one of the most badly affected by the terrorism. In addition, negative diplomatic relationship between the countries in the Middle Eastern region is also causing disturbances in the domestic affairs of Kuwait. Thus, the more will be the internal risk and the risk of terrorism, the more will be the business risk. In addition, there will be higher probability that small entrepreneurs will hesitate to enter in the business with having negative business environment. Emergence of the terrorist groups such as ISIS is posing huge threat for the domestic environment and it is also causing instability in the domestic business environment. It is also to be noted that risk of terrorism for the small entrepreneurs is more due to the reason that they are having access to less amount of funding and capital. It will be difficult for them compared to the large scale industries to recover the money in case of any instable environment (Mythen, W alklate and Khan 2013). It is the responsibility of the government to secure the domestic environment of the country. Providing reliable security measures will ensure the small entrepreneurs. Rapid advancement of the technology In the recent time, Kuwait is going through extreme transformation in their economy. Government of Kuwait is attracting more investments in order to develop domestic economy. It is in turn increasing the rate of foreign direct investments in the country. However, with the increase in the investment in the country, more foreign and updated technologies are being getting accessible in Kuwait. In this case, it is becoming difficult for the small entrepreneurs to cope up with the rapid advancement of the technology due to the involvement of more capital and investments. This is also restricting the small entrepreneurs in entering in the business sector of Kuwait. Government should provide incentives and supports for the small entrepreneurs to cope up with the latest technologies. Legal and regulatory difficulties Kuwait is having stringent and complex legal rules and regulations and it sometime becomes difficult for the small entrepreneurs to adhere and follow these regulations. They also do not have the necessary equipment to comply with the regulations (Gamborg, Anker and Sandoo 2014). Thus, government should ease the regulations and startup should be promoted. References Andr Cavalcante, S., 2013. Understanding the impact of technology on firms business models.European Journal of Innovation Management,16(3), pp.285-300. Bolton, P., Chen, H. and Wang, N., 2013. Market timing, investment, and risk management.Journal of Financial Economics,109(1), pp.40-62. Drnevich, P.L. and Croson, D.C., 2013. Information technology and business-level strategy: Toward an integrated theoretical perspective.Mis Quarterly,37(2). Gamborg, C., Anker, H.T. and Sande, P., 2014. 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