INTERNATIONAL

MARKETING
MKT-860

TUTOR NAME – MR.YAO SEMARCO

STUDENT NUMBER – B00769913

TOTAL WORDS – 3044
 Evaluation of Saudi Arabia

Table of Contents

Introduction ........................................................................................................................................... 3
Political ................................................................................................................................................... 4
Economical ............................................................................................................................................ 6
Social ....................................................................................................................................................... 9
Technological...................................................................................................................................... 11
Legal ...................................................................................................................................................... 12
Environmental ..................................................................................................................................... 14
Conclusion ........................................................................................................................................... 16
References ........................................................................................................................................... 18

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Introduction

According to the International Monetary Fund (IMF) the real GDP of Saudi Arabia of

2545.2 billion SAR of 1.5% in 2015, is considered to grow in CAGR, 2022 was 2,824.50

billion SAR.

Saudi Arabia, the Arab world, is entitled as the largest Arab state in western Asia, with

an area of about 830,000 square miles. It is located near the border of Jordan and Iraq

to the north and northeast near Kuwait.

Saudi Arabia in 2016 census recorded an estimated population of 31.743 million and in

2022 it is estimated to be increased up to 35.747 million. The unemployment pace in

Saudi Arabia is equivalent to 5.727% of the total labour force.

In 2016, Saudi Arabia government's income was SAR 528 billion while the expenditure

was SAR 933.402 billion. This made Saudi Arabia government's web

disposal/borrowing negatively at SAR 405.402 billion in 2016 signifying that sufficient

money resources weren't created accessible by the govt to spice up the economic

process.

Key Points for the study on Saudi Arabia:

 The Al Saud line holds an imposing business model of political power dependent

on its exceptionally moderate variant of Sunni Islam; activist Sunni Islamists have

propelled a few lethal assaults; Eastern Province has extensive Shia populace.

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  Saudi Arabia is the world's prevailing oil maker and proprietor of the biggest

hydrocarbon saves; quickly developing joblessness is a noteworthy test.

 Saudi Arabia is one of fundamental players in Arab and Muslim circles, in light of

notoriety as overseer of origin of Islam and as significant oil maker.

The recently launched research reports are studied here which includes Saudi Arabia's

PESTEL analysis, SWOT analysis, and Risk analysis area unit geared toward gives

close by look about the situation regarding Saudi economy and market in international

concerns.

What the uses of the Saudi Arabia PESTEL Analysis, SWOT Analysis, and Risk

Analysis research?

- It gives info regarding key economic science indicators for Saudi Arabia.

- It will give PESTLE (political, economic, social, technological, environmental and legal)

analysis.

PESTLE

It explains the political, economic, social, technological, environmental and legal

analysis to explain how macroeconomic factors arise in Saudi Arabia. It also extends

ethics and democracy, market growth / decline, business opportunities.

Political

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In the country’s legislation relating to the contractor. The Council of ministers appointed

by their president who governs them. The country is divided into 13 senior provinces

and each is governed by a named leader (MASON, 2018). It is further divided into

administrative districts and centres. This has a great effect on political control of Saudi

Arabia’s governance.

The rulers Ibn Saud's demise have all been his children, and all reasonable quick

successors to the supreme King Salman will be from among his offspring. Children of

Ibn Saud are considered to have essential case on the position of royalty of Saudi

Arabia. These create the Saudi government very different from Western monarchies.

It refers to local budgets, incentives, improvements and funds from local authorities that

determine the development interests of the respective provinces in the state financial

plan (Thompson, 2014). This shows that the political condition of the country is strictly

directed by the governing bodies.

As an individual from the World Trade Organisation (WTO), the Saudi Arabian

government (SAG) has found a way to wind up a more open, straightforward and

unsurprising business sector; be that as it may, it has relapsed in a few key territories

also including Bahah, Tabuk, Makkah, Jizan and Northern Borders (Aarts and

Nonnemann, 2006). This will have a direct impact on FDI which will increase the

domestic industries and business running in the Kingdom of Saudi Arabia.

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In January 2018, the SAG actualized a VAT at a rate of five percent, notwithstanding

the extract charges executed in June 2017 on cigarettes (at a rate of 100 percent),

carbonated beverages (at a rate of 50 percent), and caffeinated drinks (at a rate of 100

percent). Over the previous year, certain U.S. pharmaceutical organisations have

asserted that the SAG disregarded their protected innovation rights and the secrecy of

their exchange information in permitting nearby firms to create contending

pharmaceuticals. The utilization of unlicensed U.S. programming, including on SAG PC

frameworks, has proceeded unabated.

U.S. firms report encountering market hindrances in the accompanying zones:

Technical Standards and Regulations, Performance and Localization Requirements,

Intellectual Property Rights Protection (Aarts and Nonnemann, 2006), Delayed

Payments, Dispute Resolution, and the Arab League Boycott.

Economical

In 1938, the richest countries saw oil as its primary income (Shoult and Anwar, 2009). It

represents 5% of the world petrochemical production (Ogj.com, 2018). The private

sector represented 40% of GDP. As part of its efforts to attract foreign investment and

diversify its economy, Saudi Arabia joined the WTO in 2005 and has been negotiating

for several years (Chaudhry, 2015). This has shown that the Economical condition of

Saudi Arabia is consistently strong from the year 1938.

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The present account balance for Saudi Arabia was calculable to be unenthusiastic at

around USD twenty-four billion for the year 2016 and is anticipated to decrease at a

CAGR of 176.07% and reach USD eight by 2022. This unenthusiastic accounting

balance point towards Saudi Arabia is web recipient from the full world.

The Saudi Arabian economy is anticipated to grow again in 2018 with a 1.8% expansion

in GDP fundamentally because of a moderate recuperation in oil creation levels (versus

a year ago's sharp cuts) and imperceptibly higher open spending. In any case, as the

negative here and now impacts of auxiliary changes disperses and government adjusts

enhance, it is anticipated that development will ascend to over 2% in 2019 (Cowan,

2018). As the National Transformation Program (NTP) - related changes and direct

government activities went for the private area are executed, while capital spending is at

the same time increase, encourage residential development openings are anticipated to

open up. Crown Prince Mohammed canister Salman keeps on having solid ubiquity,

giving a solid flag to speculators and the more extensive open of a more drawn out term

duty to proceed with the way of changes notwithstanding the negative observations

produced by particular activities.

With enhanced financial conditions, and a declaration by specialists of less monetary

imperatives in 2018, the monetary deficiency is relied upon to limit just somewhat in

2018 to 7.6%, as an offer of GDP (Cowan, 2018). The financial standpoint joins a

proceeded solid pledge to change endeavours.

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Recouping oil costs are relied upon to additionally reinforce the current record from its

evaluated the increase of 1.7% of GDP in 2017. Swelling is anticipated to be

significantly more unpredictable in the coming years, ascending to about 5% in 2018

and after that dropping to beneath 2% in 2019 as the VAT presentation is consumed

(Cowan, 2018).

Customarily, question settlement and requirement of remote arbitral honours in Saudi

Arabia have demonstrated tedious and indeterminate (Ramady, 2010), conveying the

hazard that sharia standards can possibly trump any outside judgments or lawful points

of reference. Indeed, even after a choice is come to in a question, successful

implementation of the judgment can take a significant lot of time.

Foreign investment in Saudi Arabia is being decided by SAGIA. Investments in some

sectors may require different national authorities (Porter, 2004), including additional

exemptions, but they should not be limited to SAUA, CMA or the Communication and

Information Technology Committee (CITC).

As noted above, the service centre developed by SAGIA Capitalist (ISC) provides

regulatory information on how to invest, support and support investment in foreign

investors. In accordance with the SAGIA law, the CSI must issue or reject the licenses

within 5 days after receiving the corresponding request and supporting documents of

the capitalist potential. In 2012 and 2015, SAGIA established a new benchmark for

licensing, but many companies can evolve slowly and, sometimes, officially, by licensing

the way Saudi Arabia and its natural example try to operate (DOOLE, 2018). Service

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and agricultural licenses must be renewed once a year and two years in the store. The

long-term investment commitment cannot be a good reason to give a special overview

of uncertain supply licenses and cancel investors.

SAGIA currently supports the concept of Saudi economic value and foreign investment

applications serve as a guarantee for certification, while some consultants have recently

advised SAG to have organisations that support multiple investments contribution to

Saudi Arabia.

Social

The value of Muslims and the rapid economic transformation of social stability constitute

the Social development plan of Saudi Arabia.

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According to Hofstede's analysis, the analysis of Saudi Arabia is like the Arab

landscape and its Muslim faith plays an important role in the lives of people and limits

the power to prevent territorial units from dominating the characteristics of the country

and region (Diamond, Plattner and Brumberg, 2003). It affects the oil and mining

industries in Saudi Arabia.

Although the diversity of accumulated wealth varies considerably, there are different

types of financial benefits, but all are related to religion. The country follows religious

values Cultural mix.

Saudi's support in the work showcase is low, particularly for females. Just 40 percent of

Saudis partake in the work drive contrasted with the world normal of 62.8 percent. In

spite of ongoing expands, female work drive support is especially low at 18 percent, well

underneath most different nations. Ladies are well on the way to take an interest

somewhere in the range of 25 and 34 years old and they at that point drop out of the

work constrain (Al-Rasheed, 2013). Men drop out of the work drive at 50 years of age,

which mirrors the early retirement age and could influence the long haul manageability

of benefits reserves. Ladies will in general work principally in the training area (70

percent) and wellbeing and social parts (13 percent) where sex isolation is less

demanding. This situation in Saudi Arabia will affect the industries those involve the

gender diversity in major areas such as, Automotive and transportation, Consumer

products and retail, Government and Public sector, and financial services. The diversity

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derives better financial returns and decision which could empower the industrial sector

of Saudi Arabia.

Technological

Modern technological weapons make Saudi Arabia the most powerful in the world.

Although the internet network was introduced in the country at the end of 1999, it had

increased by 3,750% in 2000 (Hamilton and Webster, 2015).

Saudi Arabia utilizes specialized directions created both by the Saudi Arabian

Standards Organisation (SASO) and by the Gulf Standards Organisation (GSO). Saudi

Arabia advises all draft specialized controls to the WTO Committee on Technical

Barriers to Trade. This has distinguished critical chances of new business to

manufacture the moves that it is needed to be made into the new Business Plan. So

that the recognized huge dangers can be avoided and make proper move in relation

with international market.

Saudi Arabia keeps on advancing toward adherence to a solitary standard, which is

regularly founded on International Organisation for Standardization (ISO) or

International Electro-technical Commission (IEC) gauges, in specialized directions to

the prohibition of other global benchmarks, for example, those created by U.S.-

domiciled models improvement associations (SDOs). Saudi Arabia's rejection of these

other worldwide principles, which are frequently utilized by U.S. makers, can make

critical market get to confinements for mechanical and buyer items sent out from the

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United States. This event is a centre piece of improvement needed for a new market

strategy for the business which should be statistically stable and improved. New

techniques would be able to open up different territories of the market. Or on the other

hand if innovation is determined with a key item, the new business is able to ace that

innovation and enhance the item. The analysis can assist the business with assessing

these technologies to increase that.

The United States government has connected with Saudi experts on the standards for

global models per the WTO Technical Barriers to Trade Committee Decision and urged

Saudi Arabia to receive measures created by such standards in their specialised

controls, permitting all items that meet those benchmarks to enter the Saudi market

(Cowan, 2018). A few U.S. based norms associations, including SDOs and individual

organisations have likewise drawn in SASO, with blended achievement, on these issues

to save showcase access for U.S. items, going from electrical hardware to all other

small items.

Legal

The Saudi civil system is based on Share ‘A, imitative from Quran. The industrial

system looks very good in the civic system, but there are some differences. The

influence of the West is characterised by the international trade of oil refineries on an

international scale (Michie and Grieve Smith, 1998). Currently there is no change

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control rule to recover assets, products, and assets after the suspension of the

business.

Saudi Arabia recognizes the right to private property and private commerce. As

mentioned above, the SAG eliminates foreign investors from certain economic sectors

and limits certain external controls. This even though Saudi Arabia has closed the

greenhouse gas product of energy supply and the largest economy, but also allows

foreign investment, as well as the cleaning and petrochemical production of the sector.

Foreign investment in these areas is important. ExxonMobil, Chevron Texaco, and Shell

remain a joint venture with Aramco Rasta-Tanura, a Saudi Arabian company, a large-

scale multinational with SABIC, a large-scale oil refinery that uses raw materials.

Aramco is the leading investment partner of $ 20 billion in the construction and

operation of Dow Chemical, a chemical and plastics manufacturing complex in Saudi

Arabia.

The law recently overrules by the Law of the Ministry of Trade and Investment, which

promoted the competence of the Ministry of Commerce, aims to promote the

competitiveness of new foreign trade which temporarily discouraged the licensing of

non-commercial matters, consequences of territorial disputes. In recent years, Saudi

Arabia has opened foreign investment services, money, and banking services in other

markets. For example, the country is now open for repair and maintenance of craft

fertilizer systems and computers services; Wholesale, retail, and tax-free distribution

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services; all essential services and value-added services; Investment in IT and related

services.

This gives a setting to more point by point arranging, inside which new business will

have the capacity to limit hazard and take full favourable position of the open doors that

present themselves.

Immigration

A company in the country has to sign an agreement with the Ministry of the Interior

before being granted or authorized to empower the workers from outside the country

(Aarts and Nonnemann, 2006).

Employment Law

Employment in Saudi Arabia is governed by labour legislation (Aarts and Nonnemann,

2006). The Ministry of Labour regulates all labour concerns within the Kingdom affairs,

located in several real estate areas.

Environmental

Water and meteorology management in the country brings together organisations

responsible for pollution control and related environmental problems (Hamilton and

Webster, 2015). The government has jointly adopted the final environmental regulation.

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The rules that govern the exemption by categories require that the industries do not

harm the environment, which requires the prevention and avoidance of these negative

consequences.

The environmental assessment procedures are applied to the long list of income

necessary to carry out an environmental impact assessment resulting in its treatment.

Saudi Arabia is strengthening the global market by creating joint ventures with foreign

oil companies. In the year of 2011, Saudi Arabia and Dou Chemical agreed to create

the largest chemical plant in the world and create a primary plant. In 2012, Saudi

Aramco created Sinpecian high oil company for the Yaboun event, which included 78

state oil and gas refineries. It gives an opportunity to Saudi Arabia to welcome foreign

investment for enlargement of the country’s economy.

The Petro Rabigh Project 2006 has developed the integrated work and the most

complete organic compounds of Saudi Arabia in Saudi Arabia. In 2009, it partnered with

Sumitomo Chemical to extend the Rabigh II project to Petro Rabigh. The Rabigh II

project includes 30 million standard cubic meters of ethanol and 3,000 tons of fresh

essences and state-of-the-art processing equipment. Naphtha is a material that supplies

large quantities of petrochemical products. The total investment for the project will be

approximately 7 billion dollars and is already begun in the year 2017. At the end of the

project, Saudi Arabia’s investment capacity will increase, and its profitability will also

increase.

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This encourages the new business to comprehend the Economic and Political changes

that will shape the new business condition to get greater profit and minimal threats.

It's additionally critical to consider how these progressions could undermine the new

business in Saudi Arabia. On the off chance that the business will comprehend is

sufficiently early, the business might have the capacity to keep away from these issues,

or limit their effect.

Conclusion

Government plays an important role in international trade. The government of Saudi

Arabia limited international trade, due to political, cultural and economic reasons. The

intervention is important if the government requires domestic export activities. Another

situation is the impending slowdown of the economic period and the impediment of the

issues.

Saudi Arabia occupies a special position in the Middle East. The economy is based

mainly on oil and governance dominates all important economic activities of the

government. Dominica has played an important role in the maintenance of peace in the

Arab region. Their pacifist role tends to move towards Israel's Palestinian problem.

Unlike the Arab neighbours, domination is more vulnerable to conflicts of mediation,

since it is an indisputable territory with Israel. The conversations between the Gulf,

Arabia, and Islam are spatial spaces.

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In international trade, the government participates in the protection of the workplace,

national security, unfair practices, and international trade. The economic logic can be

linked to the emerging protected sector that follows a square measure of growth or a

national commercial strategy. In civilization, the government can intervene to maintain

its national identity.

The government is trying to find the easiest solution to these problems. This is a long-

term solution because they want to deal with decentralization and try to defeat social

efforts causing terrorism. It is a big issue which all countries face as the drawbacks of

their weaknesses and that all must focus on themselves. In the last two years, Saudi

sovereignty has experienced and exceeded a remarkable period, and the government

will make every effort to achieve the most significant change in the short term.

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References

 Aarts, P. and Nonnemann, G. (2006). Saudi Arabia in the balance. London:

Hurst.

 Al-Rasheed, M. (2013). A most masculine state. Cambridge: Cambridge

University Press.
 Cairns, G. and Śliwa, M. (2017). A very short, fairly interesting and reasonably

cheap book about international business. 2nd ed.

 Chaudhry, K. (2015). The Price of Wealth.

 Cowan, D. (2018). The Coming Economic Implosion of Saudi Arabia: A
Behavioral Perspective. Institute for Urban Design (US).
 Diamond, L., Plattner, M. and Brumberg, D. (2003). Islam and democracy in the

Middle East. Baltimore, Md.: Johns Hopkins University Press.

 DOOLE, I. (2018). INTERNATIONAL MARKETING STRATEGY. [S.l.]:

CENGAGE LEARNING EMEA.

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 Hamilton, L. and Webster, P. (2015). The international business environment.

Oxford: Oxford University Press.

 MASON, D. (2018). FOREIGN POLICY IN IRAN AND SAUDI ARABIA. 3rd ed.

[S.l.]: I B TAURIS.

 Michie, J. and Grieve Smith, J. (1998). Globalization, growth, and governance.

Oxford: Oxford University Press.

 Porter, M. (2004). The global competitiveness report 2004-2005. Basingstoke:

Palgrave Macmillan.

 Ramady, M. (2010). The Saudi Arabian economy. New York: Springer.

 Shoult, A. and Anwar, H. (2009). Doing business with Saudi Arabia. London:

GMB Publishing.

 Thompson, M. (2014). Saudi Arabia and the path to political change.

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