Saudi Arabia Gdp Analysis
IntroductionGamet University management team realized that if they are to achieve their vision, they have to expand into other markets throughout the world. They did a preliminary screening of all the countries from Africa, GCC, Asia-Pacific, and North America regions. Using two economic indicators, they selected three countries from each region (a total of 12 countries). However, they had to choose one country with the best business potential. This paper explains how the management used different key economic, market, and other indicators to select the best country to enter.Brief Description of Gamet UniversityGamet University offers undergraduate and postgraduate courses in Business Management. The institution has 500 employees and 4000 students. It derives its competitive advantages from availability of 10 qualified professors in the business field, a well-equipped library with over 10,000 psychical books, a well-maintained online academic database with over 5000 academic journals, and the presence of well-trained teaching and non-teaching staff. As a result, the institution enrolls a high number of students per academic year.Preliminary Screening of All countries From All RegionsThe management used two economic indicators namely GDP-real growth rate, and inflation (consumer prices) to choose 12 countries with the best possible market. Table 1 shows all the information gathered by the team.Out of a possible 103 countries, they selected Qatar, Saudi Arabia, Kuwait, Libya, Niger, Mozambique, Panama, Belize, United States, Japan, China, and Australia. This is because they had the highest GDP-real growth rate, and low inflation rates (consumer prices).
Evaluating Potential MarketsThe management identified 18 key indicators to choose one market out of the 12 identified.The key economic indicators selected were GDP (per capita), GDP (growth rate), inflation rates, government spending (% of GDP), balance of payments, money supply-M2 (% of GDP), unemployment rates, consumer confidence, and housing index.The market indicators selected were market size and growth, buying power of consumers, competitive conditions, psychic distance (intensity of local competition), and entry and exit barriers (presence of demanding regulatory standards).Other indicators included political stability, credit availability (provided by banking sector- % of GDP), integrity of the legal system, and infrastructure (in terms of electricity, telecom, and transport).These indicators alone were not helpful. They had to collect data from various accredited databases. Based on the weight of the decision they were about to make, the data needed to be factual and authentic.Key FindingsLibya had a GDP (per capita) of US$12300, a GDP growth rate of 104.50%, an inflation rate of 6.10%, and an unemployment rate of 30% (CIA’s World Factbook ,2012). World Bank (2011, 2012) estimated its BoP as US$1,409,900,000, its money supply (% of GDP) as 58.0%, and its credit availability (% of GDP) as -65.9%. DataGov (2013) gave Libya a political stability score of 0.62, an overall infrastructure score of 3.2, and a psychic distance score of 3.8. World Bank (2012) reported that it had a buying power of consumers of $17,560. Its competitive conditions (literacy rates) stood at 89.5% (CIA Factbook, 2012).