Internet and Technology on Kuwait Market †MyAssignmenthelp.com

Question: Discuss about the Internet and Technology on Kuwait Market. Answer: Introduction: The government has a strong vision on information and communication technology and makes effort to promote the positive use of the technology. The Commercial Law 68 of 1980 of Kuwait says that no foreign companies can establish any commercial activity in the country if it has no recommendation of local agents or distributors (Kuwait Times, 2018). The distributor promotes, imports, stocks and distributes products of foreign nations. They take huge amount to promote the business that is not always affordable for the foreign companies. Thus, the incorporation of internet and technologies has relieved the foreign companies to influence market in Kuwait. It has been found that 91% people living in Kuwait have access to internet (Abdulla, Naser and Saeid 2014). Thus, people get all information about a product or service through online sources, cloud computing, television, news and media. Therefore, they start buying products of foreign brands that they get through online marketing. Social media usage has also been another marketing strategy for businesses reaching the larger population of Kuwait (Vinerean et al. 2013). Rising demand for particular products and services, enable the distributors or agents to demand lower amount of money from the foreign clients that accelerate the business to enter the Kuwait market. Thus, technologies and internet has been very beneficial to reduce the threat on new entrants to function in the market of Kuwait. Due to the rapid technological advancement, there is a continuous threat of substitutes for the present businesses operational in the market of Kuwait. Digital revolution has led to massive change in both the nature of innovation and increasing pressure for the industries to innovate ideas and methods continuously (Baden-Fuller and Haefliger 2013). This threat to the market has been very effective to promote progress in the market situation of the country. However, such threats have also affected the profit margins for various industries that are bound to provide free services to the customers, which would otherwise get substituted. Due to the use of internet, people are also accessing the online sites through which they are getting their desirables simply sitting back at home. With the use of mobile phones, they are getting access to not only the national market but also the global market (Labrecque et al. 2013). This has also affected many running businesses who are now adapting fr ee home delivery facilities to sustain in the market. The online retailers are continuously engaging the customers by providing sales and discounts that are attracting them. Thus, the Kuwait market is highly threatened by the rapid use of internet and digital technology with an increasing number of substitutes in the market. The rapid use of technology has been promoting an integration of new businesses by reducing the costs spent on communication processes. Thus, there is an increase in competitive pressure for the businesses operational in the market. Due to the growing number of alternatives in the market, the bargaining power of customers is increasing. The buyers switch to other sellers if they get similar products in lower prices. Technology has led to greater innovation that has increased the availability of substitutes in the market (Westerman, Bonnet and McAfee 2014). Customers and consumers have gained greater bargaining power due to the instant access they have to information and insights from social media platforms. They have knowledge of products through the reviews and feedback and get ideas about the low switching costs through the digital channels. Advanced technology has made the customers have an access to substitutes with ease and convenience. Thus, the customers have the power to weak en the sellers to sell their products in a greater price. However, customer loyalty serves to be the solution to many sellers who have the fixed customers who prefer their brands irrespective of the availability of substitutes (Gilaninia, Taleghani and Azizi 2013). Kuwait as a whole has shown a massive improvement with the impact of information and communication technology (ICT) on business innovations. Thus, there has been an increase in mobile subscriptions and mobile coverage in the nation that has elevated the role of the customers to influence markets. Therefore, due to digitalization and growing use of technology the bargaining power of customers has also been increasing rapidly in the Kuwait market. Bargaining power of suppliers: The bargaining power of suppliers has been significantly low for the market in Kuwait. There has been an increase in the number of suppliers for products in the business market. Digital marketing has led to greater scopes for businesses to supply their products through online methods and applications (Chaffey and Ellis-Chadwick 2016). Thus, the suppliers have the fear of getting replaced with new market tools. However, the switching cost from one supplier to another is sometimes very high that makes the businesses to stick to their own supplier. In such cases, there is a significant bargaining power of the suppliers. Considering the entire market scenario of the Kuwait market, the presence of a huge number of suppliers has enabled the companies to choose supplier according to the cost they can invest on them. However, due to internet facilities and technological advancement, the suppliers also have greater access to find out and connect with the emerging companies. Thus, they get the opportunity to choose companies according to the profile. Considering the entire market, it can be concluded that the bargaining power of the suppliers is quite low in the operational markets. The use of internet and technology has led the businesses to have an access to the entire world (Czinkota and Ronkainen 2013). Thus, it has led to the growing trend of international trade according to the demands of the nations. Due to the improved methods, the buyers and sellers of the world has been connected to merge at a point where they are getting desired products at an agreed value. The use of internet has led to greater communication among the buyers and sellers. However, it has led to a massive increase in rivalries among the companies. The use of technology has enabled the emerging businesses along the older ones to operate globally (Laudon and Traver 2013). Thus, the rivalries are on an increase, which simultaneously leads the businesses to take risks in order to stabilize their positions in the market. The industries are bound to spend a huge amount on promotional activities, CSR activities and advertisements to compete with the other companies and attract the customers. Thus, though the digitalization and technologies has brought scopes for industries to expand their businesses globally, it has equally raised the competition among them enormously. Most of the customers do not change their preferences of products with the change in technology. They stay loyal to the old brands and deviates from trying new ones. In Kuwait, the customers lack of interest in new products caused a downturn for the emerging industries or new products in the market, as was manifested in the market of smart phones where people seemed to stick to the use of blackberry phones with barely any switch to the other brands (Doronin 2013). It is very important to incorporate knowledge about the adoption of newer brands in the customers. They must be given free trials and through advertisements and workshops, they must be awakened with the advantages that they can have using the new brands. They must be informed about the updated versions of products that would enable them to accept the new products brought in the market. The industries operating in the Kuwait market have raised their capital investment to a good extent. Competing with them requires the small-scale industries to raise their revenue in such a way that they meet the level set by the existing ones. Thus, there are huge risks for the companies to face huge loss that may ultimately lead to their declination. The new industries thus need to create a good impression among the target customers so that they do not incur loss. They must positively use new technologies and make investments in advertisements, workshops and promotional activities to reach to the customers and create a good customer base to operate successfully in the market (Eid and El-Gohary 2013). Lack of long-term objectives: The small-scale emerging industries lack long-term goals and just try to establish themselves in the market scenario of the country. They make huge investments for that with no proper strategy that ultimately lead to their collapse. They emerge with lack of skills and lack of regulations in the production methods that disrupts the entire company. Thus, it is very important for industries to come into the market with both short and long term objectives set with a good management that serve to be the base. The management must be updating with all the procedures and feedback that the companies get from both the ends of employees and customers that would enable the industries to perform in a collaborated and effective way. The industries must focus on their production and profit goals that are very essential to sustain in the market. New companies do not have the advantage of customer loyalty. Thus, it becomes very difficult for them to occupy places in the preference lists of customers. The consumers do not and cannot trust any company that comes up in the market. Thus, the companies need to take measures to popularize their products and services by offering discounts, keeping low price for similar products that the established companies have for their products, free trials and interesting offers to grow the consumer relations. This would enable them to reach to the population at large and enable them to gradually gain the trust of the consumers. References: Abdulla, A.M., Naser, K. and Saeid, M., 2014. Employability factors of business graduates in Kuwait: Evidence from an emerging country.International Journal of Business and Management,9(10), p.49. Baden-Fuller, C. and Haefliger, S., 2013. Business models and technological innovation.Long range planning,46(6), pp.419-426. Chaffey, D. and Ellis-Chadwick, F., 2016.Digital marketing. Prentice Hall Czinkota, M.R. and Ronkainen, I.A., 2013.International marketing. Cengage Learning. Doronin, D., 2013. Macro-level Market Research of Kuwait. Eid, R. and El-Gohary, H., 2013. The impact of E-marketing use on small business enterprises' marketing success.The Service Industries Journal,33(1), pp.31-50. Gilaninia, S., Taleghani, M. and Azizi, N., 2013. Marketing mix and consumer behavior.Kuwait Chapter of the Arabian Journal of Business and Management Review,2(12), p.53. Kuwait Times. (2018).Door to total foreign ownership in companies opened in Kuwait - Kuwait Times. [online] Available at: https://news.kuwaittimes.net/door-total-foreign-ownership-companies-opened-kuwait/ [Accessed 25 Mar. 2018]. Labrecque, L.I., vor dem Esche, J., Mathwick, C., Novak, T.P. and Hofacker, C.F., 2013. Consumer power: Evolution in the digital age.Journal of Interactive Marketing,27(4), pp.257-269. Laudon, K.C. and Traver, C.G., 2013.E-commerce. Pearson. Vinerean, S., Cetina, I., Dumitrescu, L. and Tichindelean, M., 2013. The effects of social media marketing on online consumer behavior.International Journal of Business and Management,8(14), p.66. Westerman, G., Bonnet, D. and McAfee, A., 2014.Leading digital: Turning technology into business transformation. Harvard Business Press.