There is a considerable need for strategic thinking in Saudi Arabia as regards leverage of the country’s oil advantage as well as minimizing its long term reliance on oil. In particular, the country’s oil makes up 45% of gross domestic product. The country has oil reserves of 260 million barrels. 75% of the country’s revenue is derived from its oil industry. There are weaknesses and strengths that have direct impact on how the country increases per capita income. Better performance can only be actualized through strategic thinking.
Vision
Mission
The country’s mission is to nurture and hone human spirit, one person and one neighborhood always. The government endeavors to invest heavily in a renewable technology that will definitely change how Saudi Arabia uses the fuel oil in future.
Objectives
Financial objectives
Being one of the fastest growing economies in the world with a comparatively higher per capita income, the government strives to boost the revenue derived from oil reserves from the current 75% to 90% every year for the successive ten years. Besides, the government aims to double its export earnings from oil export within the next five years and to considerably increase the country’s self-competence in the agricultural products.
Strategic objectives
The government aims to empower the economic cities to help in diversifying the country’s economy and to increase the country’s per capita. Equally, the country strives to effectively exploit oil from its oil reserves.
Driving force
The country’s larger per capita income, better economic growth rate, richer oil reserves and the need to promote private sector development are some of the core driving forces. Better economic growth rate, larger amount of oil reserves, advanced technology and efficient use of resources compel the country towards putting in place better strategies to help it benefit for oil advantage as well as to minimize long term reliance on oil.
Assumptions
The country’s strategic plan is based on Sun Tzu principle that an individual must be a character-based leader. As the King, I believe on the philosophy that a person should not be reckless, too compassionate, and quick tempered and overly focused on one’s honor. It is assumed that the success of the country in reducing its long term reliance on oil and in leverage its oil advantage is dependent on the endless support of the country’s private sector and that every company exploiting oil recognizes the country’s major value of oil to the country.
SWOT
Strong per capita income, larger oil reserves, and faster economic growth are the strengths while contraction in oil revenue, ineffective exploitation of oil and faster growth rate in the country’s population are the weaknesses. Increasing the number of oil reserves, use of advanced technology, use of renewable technology and maximizing oil supply to OPEC to recoup better oil prices are the opportunities. Threats however emerge from depletion of certain oil reserves, emergence of clean alternative sources of energy and unfavorable change in real price of oil.
Analysis of strategic issue
The core strategic issue is how to effectively invest in the renewable technology that will be used to change the way Saudi Arabia uses its oil resources in the successive years. The same technology is employed in America and thus may not very competitive.
Strategic alternative
According to Hitt et. al (2008), the significant key to sustainable successful innovation is where both processes and people operate concurrently. Schultz as well supported the notion. Therefore, as a king, I plan to create an economic environment which is very conducive and innovative to the country’s oil exploiters. It is significant since it will enable Saudi Arabia to carry on with its distinctive oil exploitation and experience and to exceptionally supply Oil to the OPEC through the years.
Recommended strategy
The country should invest in renewable technology that will eventually alter the oil reliance in future and continuously explore new oil reserves to increase amount of oil supply to OPEC and to leverage its oil advantage.
Implementation
Based on the country’s strengths, the government should start with directing oil exploitation companies to institutionalize the idea of investing in renewable technology. Thereafter, the government will privatize its oil exploitation companies and increase budget allocation for clean energy exploitation.
