Each nation is supposed to create level playing field for its firms to equally g

Question

Each nation is supposed to create level playing field for its firms to equally gain competitive advantage in various industries. However, some countries focus only on one or few industries for their economic development and growth. Assuming that you are strategy and policy expert for your own country :( Bahrain, Lebanon, Oman, Jordan, Kuwait, Egypt, Saudi Arabia, and Sudan) you are:

Required:

1. To critically analyze and discuss the impact of relying only on a single type of industry for a nation’s competitive advantage (500 words)

2. To suggest and critically discuss FOUR policies that can enable firms in your country to contribute in creating and sustaining the nation’s competitive advantage. (1000 words)

Explanation / Answer

Each nation is supposed to create level playing field for its firms to equally gain competitive advantage in various industries. However, some countries focus only on one or few industries for their economic development and growth. Assuming that you are strategy and policy expert for your own country :( Bahrain, Lebanon, Oman, Jordan, Kuwait, Egypt, Saudi Arabia, and Sudan) you are:

Required:

Any nation’s economy is dependent on the value creation by different industries. Industries by their very nature have different set of strengths and weaknesses and they keep changing in cyclically. Hence in order to mitigate its risks every country needs to create conditions that help each of its’ industries to flourish at all times. However some countries focus too much on one industry and whenever the global tide turns against this industry the whole country’s economy is in doldrums.

Lets take an example of Saudi Arabia. The country reaped the rewards of high global demand for Oil for the last 2 decades. Now suddenly with many more countries discovering oil fields and exporting the same to the needful countries, focus on cleaner fuel and a host of other factors, oil prices have slumped. Saudi Arabia as a result is struggling to meet its’ expenses. Now had this country focused on other natural resources the country has in the past decade, it would have been in a better position to weather the crisis today. Other industries which have a great potential in Saudi Arabia are Mining and Metals, Tourism and Hospitality, Manufacturing (given its close proximity to European markets), Finance etc.

Relying on a single industry might give the country an exceptional growth due to the positive reinforcement but it is like putting all eggs in a single basket and hence comes at a cost of huge risks.

Another example is the country Sudan which is heavily dependent on its minerals and metals. Any slump in the global commodities market would impact Sudan massively. The country should start building on their agriculture industry to become self-reliant for their cereals and pulses given their closeness to river Nile.

Also any steps taken would need a lead time of almost 5-10 years that that industry to start contributing in a impactful way to the countries’ economy and hence far-sightedness is a must by each country’s leadership.

https://www.mckinsey.com/global-themes/employment-and-growth/moving-saudi-arabias-economy-beyond-oil

2. To suggest and critically discuss FOUR policies that can enable firms in your country to contribute in creating and sustaining the nation’s com

With the new and an action bias government in China, it is evident that the Chinese govt. has successfully created an environment for its’ strong industries (Manufacturing, electronics etc) and its’ maturing industries (Agriculture, Software services, Shipping and transportation, Ship building and Aircraft manufacturing).

Chinese govt. provided enormous incentives to businesses (almost a decade back) to promote their manufacturing capabilities in the form of cheap land, access to highways, Tax incentives etc. As a result Chinese have emerged as the global hub of manufacturing. The manufacturing industry catered to the needs domestically and that of international firms and with a slowdown in global economy they realized their declining strength. Hence Chinese govt. has started giving incentives for agriculture (discounted or tax rebates on farming equipment, seeds, fertilizers etc., High import duties on food grains etc), Shipping (Govt. themselves have setup many ship building yards to be a part of the globally free economy where many goods would move around larger distances from their cheapest origin), Software Services (Chinese have lagged Indians and eastern European countries due to their inability to speak English and thus weren’t able to participate in the global outsourcing boom but Chinese govt. has made English as one of the main subjects at all levels to create a workforce for future which can us English as their primary language)

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.