The Adaptation of Foreign Companies to the Saudi Market - Literature review Example

The paper "The Adaptation of Foreign Companies to the Saudi Market" is an outstanding example of a management literature review. To outsiders, Saudi Arabia seems like a country that is full of paradoxes and contrasts. The country has modern cities and the government often reiterates that the kingdom is open to doing business with the world. However, on the other hand, the strict Islamic culture of the country, which is evident in the social customs, clashes with what most people perceive as a modern business and economic realities. As Jones (2015) notes, foreign companies usually have challenges adapting to the Saudi Arabian customs because in most cases, such customs are contrary to the value systems held in western democracies. It has therefore been observed that the successful operations of foreign companies in Saudi Arabia largely depend on how well the businesses understand and adapt to the host country’s customs.

This literature review will document and discuss existing knowledge in the literature regarding how international foreign companies adapt to the Saudi Arabian market specifics in order to gain a competitive advantage. Specifically, the literature review will seek to understand the technological and supply chain perspectives adopted by foreign companies as they seek to attain competitiveness in the Saudi Arabian market. Adaptation is different from standardization in that through the former, businesses seek to change existing factors regarding their modes of operation elsewhere to fit into a new market. Standardization on the other hand seeks to ‘import’ existing business strategies into a new market. While standardisation can lead to reduced costs of doing business, it has been criticised for assuming that the international market is homogenous and that one product/service would be acceptable to all global consumers (Alimiene& Kuvykaite, 2008). Adaptation on the other hand involves higher costs since a foreign company’s operations (including its product/service offers) must be modified to fit the unique traits of the new international market. Arguably, adaptation enhances a foreign company’s chances of attaining competitiveness in a new market since the business operations will be modelled to address specific needs and preferences that exist therein. As will be discussed in this literature review, Saudi Arabia has unique traits that every foreign company seeking to venture into its market needs to be aware of. Basically, the successful operation of a foreign firm in the Saudi Arabian market depends on how well those traits are considered in a foreign company’s operation strategy in the kingdom.