Kingdom of Saudi Arabia Strategic Management PDF

**KINGDOM OF SAUDI ARABIA (KSA)** **STRATEGIC MANAGEMENT** GROUP 8 BSAIS 4-A CANO, Rica Angel D. LIWANAG, China Dawn C. ROMAN, Jumelica P. SANTOS, Ericka O. VILLARMINO, Kathleen D. **The Kingdom of Saudi Arabia Introduction** - Located in the Middle East on the Arabian Peninsula, Saudi Ar...

**KINGDOM OF SAUDI ARABIA (KSA)** **STRATEGIC MANAGEMENT** GROUP 8 BSAIS 4-A CANO, Rica Angel D. LIWANAG, China Dawn C. ROMAN, Jumelica P. SANTOS, Ericka O. VILLARMINO, Kathleen D. **The Kingdom of Saudi Arabia Introduction** - Located in the Middle East on the Arabian Peninsula, Saudi Arabia is known as the birthplace of Islam, containing the two holiest cities in Islam, Mecca and Medina. Mecca hosts the annual Hajj pilgrimage, which draws millions of Muslims from around the world, while Medina is the site of the Prophet Muhammad\'s mosque. This centrality to Islamic faith imbues the kingdom with significant cultural and spiritual importance. - Ruled by King Salman bin Abdulaziz Al Saud, Saudi Arabia is characterized by an absolute monarchy where the king holds ultimate power over the country\'s political, social, and economic affairs. The royal family plays a pivotal role in governance, and decisions are often influenced by a network of advisors within the ruling family and influential tribal leaders. - The economy of Saudi Arabia heavily relies on oil exports, which account for a large portion of the kingdom\'s revenue. These oil exports provide substantial funding for government projects and social programs. However, recognizing the volatility of oil prices and the potential risks associated with over-dependence on a single resource, the government has initiated efforts to diversify the economy through Vision 2030. This comprehensive plan aims to reduce reliance on oil revenue and foster development in other sectors. - The current population of Saudi Arabia in 2024 is 37,473,929. **CHAPTER 1: Strategic Management Process** - The strategic management process in Saudi Arabia begins with an environmental analysis that identifies both external challenges, such as global economic shifts that may alter demand for oil, and internal issues, including the kingdom\'s high reliance on oil as the primary revenue source. An understanding of these factors is essential for crafting effective strategies in a rapidly changing global landscape. - Vision 2030 aims to create a more diversified economy that not only relies on oil but also encourages increased investment in technology, infrastructure, and human capital, leading to improved quality of life for citizens. The plan seeks to enhance the private sector\'s contribution to the economy by encouraging entrepreneurship and facilitating new business opportunities. - A SWOT analysis further clarifies the kingdom's strategic position by highlighting its strengths such as vast oil reserves, weaknesses like high dependence on oil revenues, opportunities in emerging sectors like renewable energy and tourism, and threats including geopolitical instability in the region, which could potentially affect economic security and growth. - In strategy formulation, the government focuses on diversifying the economy by investing in developing sectors like tourism, entertainment, manufacturing, and technology. These efforts aim to position Saudi Arabia as a regional business hub offering diverse services and products to both local and international markets. - The implementation of these strategies involves oversight agencies that monitor progress toward strategic goals through key performance indicators (KPIs). Despite these structures, challenges persist, including limited engagement from stakeholders, which can hinder collaborative efforts necessary for successful program execution. Thus, improving stakeholder participation becomes a critical element in ensuring that the strategies are inclusive and widely supported. **CHAPTER 2: Business Environment for Competitive Strategy** - Saudi Arabia\'s macroeconomic factors, such as a rapidly growing youth population and strategic geographical location, play a significant role in attracting foreign investment. The demographic dividend presents an opportunity for economic growth and a workforce eager to enter various sectors, thus enhancing competitive dynamics. - The political environment is notably focused on sweeping economic reforms and improving business conditions, which have collectively contributed to an upward shift in the World Bank\'s Ease of Doing Business Index. These reforms include regulatory ease, tax incentives, and support for small and medium enterprises (SMEs). - Social dynamics in Saudi Arabia emphasize the need for increased participation of the Saudi workforce, particularly for women and younger generations, with Saudization policies aimed at enhancing local employment and reducing foreign dependency in the labor market. These policies are designed to empower citizens and promote a sense of ownership in the country\'s economic future. - Technological advancements are a key focus, with substantial investments directed toward developing digital infrastructure and e-government services that enhance efficiency and competitiveness across various industries. The push towards a digital economy is aimed at easing business processes and improving service delivery to citizens and investors alike. **CHAPTER 3: Internal Operational Environment** - The cultural influence of strong Islamic traditions plays a significant role in shaping business practices within Saudi Arabia. Relationships and trust, often embodied in the concept of \"Wasta,\" or personal connections, are crucial for success in business dealings. Understanding these cultural nuances is vital for both local and foreign businesses operating in the kingdom. - The economic context is influenced by fluctuations in oil prices, impacting not only national revenue but also the overall health of businesses across various sectors. The government promotes its Vision 2030 agenda to stimulate private sector growth and stability regardless of oil prices. This diversification is viewed as essential for creating a resilient economy. - Human resources present a unique challenge, as the kingdom has a large foreign workforce fulfilling various roles within the economy. This reliance on expatriate labor raises concerns about the development of local talent, thus underscoring the importance of Saudization policies, which aim to equip Saudi nationals with the skills necessary to participate effectively in the workforce. - The government\'s role in shaping the internal operational environment is significant. It is tasked with creating regulations that foster entrepreneurship and support SME growth, while also ensuring that labor laws and industry standards are in line with both national interests and international best practices. **CHAPTER 4: Strategy Formulation in Business Actions** - Vision 2030 outlines specific objectives aimed at promoting economic diversity by encouraging multiple sources of income, fostering enhanced human capital, and nurturing societal cohesion across different demographics. These goals underline a comprehensive approach toward holistic national growth and development. - Analysis of external and internal factors helps in identifying market opportunities, resource strengths, and key areas that require development, particularly focusing on increasing non-oil revenue sources. This analysis informs decision-makers about the best paths for sustainable growth and long-term viability of the economy. - Strategic implementation is crucial, involving concerted actions to not only promote foreign investment but also to ensure the development of the necessary infrastructure that facilitates business operations. Infrastructure improvements, including transportation networks and utilities, are foundational to attracting and sustaining investments. **CHAPTER 5: Dynamics of Competitive Rivalry** - The dynamics of competitive rivalry in the region are complex, with regional tensions, notably with Iran, posing security challenges. These rivalries can influence broader economic stability, affecting investor confidence and regional cooperation initiatives. - Economic competition with neighboring the United Arab Emirates (UAE) exists, particularly in sectors such as tourism, finance, and technology. This competition impacts oil pricing mechanisms and may alter the attractiveness of investments in Saudi Arabia compared to other regional players. - Relations with the United States have experienced strain due to differing policy approaches and geopolitical interests. These strains can pose challenges for foreign investments and diminish the kingdom\'s leverage in regional influence, prompting the need for careful diplomatic engagement and economic strategy. - Vision 2030-related projects, such as NEOM---a planned \$500 billion futuristic city---serve as competitive platforms aimed at attracting global investment and talent. Such initiatives position Saudi Arabia against regional competitors as it seeks to diversify its economy and present itself as a pioneering nation in various technological and economic arenas. **CHAPTER 6: Corporate Expansion and Strategic Action** - Identifying key sectors for growth is crucial to Saudi Arabia's economic diversification strategy. Key sectors include manufacturing, logistics, tourism, and renewable energy, which have been prioritized due to their potential to generate sustainable revenue streams and create job opportunities for Saudi nationals. - Efforts to attract investment involve a myriad of initiatives aimed at streamlining processes, such as simplifying the regulatory environment and offering special economic zones (SEZs) that provide favorable conditions for business operations. SEZs aim to create more attractive environments for international businesses by offering regulatory relaxations and financial incentives. - Despite these progressive strategies, Saudi Arabia faces significant challenges, particularly its long-standing dependency on oil. To build a more sustainable economic structure, concerted efforts are necessary for encouraging skill development, enhancing education, and fostering a culture of innovation that can support diversification beyond the oil sector. **Recommendations** - Engaging stakeholders is essential for ensuring that the planning and execution of strategies are inclusive. This inclusivity is necessary to foster a sense of ownership and collective responsibility towards the nation\'s strategic goals. - Transparency in governance remains a paramount recommendation, which could be achieved through the adoption of clear metrics and accountability mechanisms that allow both the government and the public to track progress toward strategic goals. This fosters greater trust and commitment among all stakeholders. - Diversifying economic engagement is crucial for mitigating risks associated with oil dependency. By shifting focus toward developing non-oil sectors, Saudi Arabia can create a more robust economic foundation that supports sustainable growth, resilience to global market fluctuations, and preparation for future economic challenges.