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The Endless Challenges of KIA Motors for Globalization: A Case Study on Kia in Saudi
Arabia
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The Endless Challenges of KIA Motors for Globalization: A Case Study on Kia in Saudi
Arabia
Reference:
Young-Eun Park, (2018). The Endless Challenges of KIA Motors for Globalization: A Case Study on
Kia in Saudi Arabia. International Journal of Industrial Distribution & Business, 9(9), pp. 45-52.
Summary:
Young-Eun Park has written this article to highlight the importance of globalization and working
patterns of foreign firms in Middle-East countries such as Saudi Arabia. International firms such
as KIA dominated the market in Saudi Arabia with its advanced business strategies of
globalization. This study intake both primary and secondary data for analysis such as; primary
data through interviews or questionnaires and secondary data from authentic and official
websites, journal and past research work of scholars. Although the market structure and culture is
different in Saudi Arabia, it is concluded the foreign firms especially Korean firms like KIA
succeeded to retain the top position in the local market. This study highlighted efficient market
strategies and their allegations in worldwide markets.
Due to cultural and economic diversities, international business is a challenging process while in
the case of Saudi Arabia market situations are quite rigid even manufacturers are conventional in
principles and business trend. Last decade experiences declined trend in the automotive industry.
In such circumstances of KIA motors, it adopted customer-centered and new marketing
approaches like streamlined production, communications, and consumers` engagement. In 2016
the company`s turnover was $6.3 billion USD. Mazda, Toyota, Mitsubishi etc. are competitors of
KIA motors in Middle-Eastern countries.

The business market contains some internal and external factors of the market such as economic,
social, political, and cultural so on. These factors affect business situations of small and medium-
sized firms in a country. Considering the environment of Saudi Arabia, multinationals firms’
faces difficulties in the start to operate business operations in the markets of host-country. These
factors decrease the confidence of foreign firms, additionally, the traditional environment of
Saudi Arabia discourage investors for long-term investments. But now the situation has changed
due to a participation of AL-Jabr with foreign firms in joint ventures and strengthens the local
market, boost investment and give trust to multinational companies.
A KIA motor was established in 1944 and started its business in the 1980s in Saudi Arabia. KIA
came back to the Saudi market with an effective strategy, advanced revelation of style and
financial management that makes it the leading car brand in Saudi Arabia. The business
community signed the venture agreement with Al Jaber Group and establish an exclusive agent
within the country that will be accountable for all the managerial and monetary as well as legal
aspects of the business. The legal and customs problems handled domestically though complete
management and selling are collectively done by the native and the main international
administration
Positive aspects:
Different automotive firms like Toyota, Mazda, Mitsubishi and Nissan, Honda are famous
brands of USA, UK, Germany, Japan, and Korea and have a significant impact on worldwide
markets. Although this industry is facing different problems they are growing well and
expanding their business around the world. Toyota is the most famous, a top brand of the
automotive industry in Saudi Arabia while KIA ranks fourth position (Orison, 2016). Inhabitants
of Saudi Arabia are fond of automotive-vehicles, that’s why these multinationals bear low
taxation rates. This journal focused and favored globalization with a positive impact on business
operations, competitive advantage and innovations around the world.
Negative Aspects:
Numerous negative aspects are discussed in this journal article as follows:
a) Saudi Arabia is the region where businessmen experience traditional hurdles, rigidity and
market restrictions at the initial stage. In such a case, investors and multinationals feel
hesitation for investment ventures due to conservationism
b) Before 90s Korean firms were following different human resources and legal strategies in
FDI which put negative impact. Later on, KIA brings transformation in business activities
and business-related strategies.
c) There is a limitation to approach sources of educational studies and particularly reliable
sources during this region. If enough information is complemented qualitatively and
quantitatively, a top quality paper would be written.
d) It is tested empirically to develop a theoretical model or framework whether it's applied or
not. Such limitations of this study should be thought-about in future studies furthermore.
e) The study is concentrated in the main on the strategy supported environmental problems
instead of the company’s internal problems. Moreover, it's confined to one company to
determine its entry strategy within the context of the Saudi Arabian Peninsula.
It is concluded the most findings of this study show a limitation to be created usually applicable
to methods of different transnational enterprises that have associate degree interest in the
operative business in Kingdom of Saudi Arabia or the Middle East.

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The Endless Challenges of KIA Motors for Globalization: A Case Study on Kia in Saudi

Submitted To: __________________

strategies and their allegations in worldwide markets.

In such circumstances of KIA motors, it adopted customer-centered and new marketing

approaches like streamlined production, communications, and consumers` engagement. In 2016

KIA motors in Middle-Eastern countries.

market, boost investment and give trust to multinational companies.

operations, competitive advantage and innovations around the world.

Numerous negative aspects are discussed in this journal article as follows:

hesitation for investment ventures due to conservationism

and business-related strategies.

c) There is a limitation to approach sources of educational studies and particularly reliable

sources during this region. If enough information is complemented qualitatively and

quantitatively, a top quality paper would be written.

d) It is tested empirically to develop a theoretical model or framework whether it's applied or

operative business in Kingdom of Saudi Arabia or the Middle East.

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