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Management Question

Description

I want the answer without similarity at all, and Conceptual and professional, they’re important. I have a solution model.

‫المملكة العربية السعودية‬
‫وزارة التعليم‬
‫الجامعة السعودية اإللكترونية‬

Kingdom of Saudi Arabia
Ministry of Education
Saudi Electronic University

College of Administrative and Financial Sciences

Assignment 3
Introduction to International Business (MGT 321)
Due Date: 30/11/2024 @ 23:59
Course Name: Introduction to International
Business
Course Code: MGT321

Student’s Name:

Semester: First

CRN:

Student’s ID Number:

Academic Year:2024-25-1st

For Instructor’s Use only
Instructor’s Name:
Students’ Grade:
Marks Obtained/Out of 10

Level of Marks: High/Middle/Low

General Instructions – PLEASE READ THEM CAREFULLY
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•
•
•
•
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The Assignment must be submitted on Blackboard (WORD format only) via allocated
folder.
Assignments submitted through email will not be accepted.
Students are advised to make their work clear and well presented, marks may be reduced
for poor presentation. This includes filling your information on the cover page.
Students must mention question number clearly in their answer.
Late submission will NOT be accepted.
Avoid plagiarism, the work should be in your own words, copying from students or other
resources without proper referencing will result in ZERO marks. No exceptions.
All answered must be typed using Times New Roman (size 12, double-spaced) font. No
pictures containing text will be accepted and will be considered plagiarism).
Submissions without this cover page will NOT be accepted.

Learning Outcomes:
1. Discuss the reasons and methods of governments’ intervention in trade (CLO: 1.2)
2. Analyze the effects of culture, politics and economic systems in the context of
international business (CLO: 2.1)
3. Carry out effective self-evaluation through discussing economic systems in the
international business context (CLO: 3.6)

Report Writing
Select any publicly listed Saudi Company that operates in Europe and/or Africa, and write
a report covering the following points:

Assignment Question(s):
1. Present the study report with clear Introduction and Conclusion including your own

views.

(minimum words: 300, marks: 2)

2. Using SWOT analysis, analyze the external and internal environment of your
selected company.
(minimum words: 700, marks: 5)
Strengths: Explain the strengths of the selected company;
Weaknesses: Describe the areas of weakness in the company’s operations;
Opportunities: Examine factors that may improve the company’s chances of
success;
Threats: Discuss the external threats to the business company’s success.
3. Analyze the political, economic, cultural and legal challenges the company
currently faces in any of the country it operates (select one country in which the
company operates for this analysis).
(minimum words: 300, marks: 2)
4. References: Your paper must include at least five (5) external sources such as

academic papers, reputable business databases, company websites, or government
websites.
(marks: 1)
Important Notes:
•
•
•
•

This is an individual assignment.
The paper should be between 1,300-2,000 words.
All references must be cited using APA format. This includes both in-text
citations and the reference list at the end of the document.
Originality, Similarity and Plagiarism Check: Your work must be original. All
papers will be submitted through SafeAssign software to check for similarity and

plagiarism. Any instance of academic dishonesty will result in a grade of zero for
the assignment. No exceptions and no second chances!

Answers
1. Answer2. Answer3. Answer4. Answer-

‫المملكة العربية السعودية‬
‫وزارة التعليم‬
‫الجامعة السعودية اإللكترونية‬

Kingdom of Saudi Arabia
Ministry of Education
Saudi Electronic University

College of Administrative and Financial Sciences

Assignment 2
Introduction to International Business (MGT 321)
Due Date: 18/02/2023 @ 23:59
Student’s Name:

Semester: Second

CRN:

Course Name: Introduction to International
Business
Course Code: MGT-321

Student’s ID Number:

For Instructor’s Use only
Instructor’s Name:
Students’ Grade:
Marks Obtained/Out of 15

Academic Year:2022-23-2nd

Level of Marks: High/Middle/Low






General Instructions – PLEASE READ THEM CAREFULLY







Learning Outcomes:

 Discuss the reasons and methods of governments’ intervention in trade (CLO: 1.2)
 Analyze the effects of culture, politics and economic systems in the context of
international business (CLO: 2.1)

 Carry out effective self-evaluation through discussing economic systems in the
international business context (CLO: 3.6)

Report Writing

Select a Saudi company that operates in any of the GULF countries, and write a
(minimum of 2000 word) report covering the following points (Citation of necessary

references is required):

1. Present the study report with clear Introduction and Conclusion including your own

views.

(minimum words: 500, marks: 3)

2. Using SWOT analysis, analyze the external and internal environment of your

selected company.
(minimum words: 900, marks: 7)
Strengths: Explain the strengths of the selected company;
Weaknesses: Describe the areas of weakness in the company’s operations;
Opportunities: Examine factors that may improve the company’s chances of
success;
Threats: Discuss the external threats to the business company’s success.

3. Analyze the political, economic, cultural and legal challenges the company

currently faces in any of the country it operates (select one country in which the
company operates for this analysis).
(minimum words: 600, marks: 5)

Answers

Q1.a

Introduction

Almarai Company is a Saudi multinational dairy organization listed in the Tadawul

stock exchange as it specializes in manufacturing and distributing dairy foods and
beverages. The company is located in the food processing industry, and some of the leading
products manufactured in the company include; fresh milk, protein milk, Mutabal, Labneh,

Condensed milk, Cheese Slices, and ghee, among other products. The company was
established in 1977 by Sultan bin Mohammed bin Saud Al Kabeer. He currently owns
23.69% of the company, while Savola owns the largest share at 34.53%. The public

investment fund of Saudi Arabia owns 16.32% of the company. Since Almarai is a publicly
traded company, the rest of the shares are traded in the Tadawul stock exchange market.

Almarai dairy company operates in 7 countries: KSA, UAE, Kuwait, Jordan, Bahrain,
Oman, and Egypt. These nations constitute all the nations under the Gulf region. The
company’s headquarters are in Riyadh, the capital of Saudi Arabia, and the CEO is
Abdullah Nesser Al-Bader. The company’s mission is to deliver quality and nutritious dairy
foods and beverages that enrich the lives of consumers in the gulf region. The vision is to
enhance the current position as the trusted choice for food and beverage within the gulf
region. In this paper, I aim to explore the company’s competitive nature using a SWOT
analysis framework and assess the challenges the company endures while operating in a

foreign nation apart from its parent nation of Saudi Arabia. Some of the company’s main
competitors include Unikai foods PJSC and The Saudia Dairy and Foodstuff Co (Alotaibi,
2019).

SWOT Analysis

Q2.

The internal and external environment of the company is essential in understanding

how various operations affect its business process and, ultimately, its competitive stand.
The internal environment will therefore explore the strengths and weaknesses of the
company since they are elements that take place from within the company. In contrast, the
external environment will explore the opportunities and threats affecting the company since

they are the element that takes place from outside the company. These environments,
therefore, impact the operations of the Almarai company, and this section will explore each

factor in the framework.
Strengths

a) Established brand
Almarai dairy company has one of the leading brands within the gulf region, which

makes the company’s products recognizable. Additionally, its strong brand has allowed the
company to navigate the competitive food processing industry and thus stay ahead of its

competitors. Therefore, consumers of the company’s products have learned to trust the
company, which has further improved the brand image (Alotaibi, 2019).
b) Quality system
Apart from its established brand, the Almarai dairy company also relies heavily on its
quality systems to improve consumer services. The quality systems also impact the

company’s supply chain and distribution network, ensuring that products reach their
destination on time. Applying an efficient quality system also implies that the company

manufactures unique products that consumers easily accept.
c) Innovation

Almarai Company implements a high level of technology in its business operations.
Artificial Intelligence has improved product packaging, advanced manufacturing
processes, and infrastructure. The Almarai Company has improved its technology over the
recent years, allowing them to benefit the most from technological improvement. Fusing

technology with its manufacturing processes has allowed the company to become advanced

and thus use innovation to gain a competitive edge.
d) Product Diversity
The main products manufactured and distributed by the company include; fresh milk,

protein milk, Mutabal, Labneh, Condensed milk, Cheese Slices, and ghee, among others.
The list of products offered by the company is very long, which means consumers have a
wider range of alternatives due to product diversity. This wide range of product options
has improved the ability of the company to satisfy consumer needs because each customer
will have a product of choice from its large list of products. The company, therefore, takes

pride in manufacturing and distributing a wide variety of products to consumers since this
initiative keeps them happy that the company fulfills their needs (Mohamad & Asfour,
2020).
e) Distribution Channel
The company’s success has primarily been centered around its ability to deliver

products to the consumer and thus maintain a good flow of manufactured products which
helps them maintain demand. The company has ensured that consumer demand is met by

implementing a good distribution channel through mergers and acquisitions with other
companies that have assisted in getting the products to the consumer. By maintaining a

within the gulf region.
Weaknesses

good distribution channel, the company also could increase the demand for dairy products

a) High dependence on the brand

The company depends highly on the brand name, which lowers its ability to rely on

other alternative brands, which may increase the impact of any risk the company faces. The
company brand has been effective in boosting its sales, but overreliance means that the
company has no other alternative if the brand image and reputation are ruined. By focusing
on its brand image, the company could make consumers admire their products, and thus
Almarai has invested heavily in ensuring the brand promoted the business. The main
problem with focusing too much on the company’s brand is that the business forgets that
other business processes, such as distribution and supply chain, do not rely on the company
brand. The company should therefore diversify its portfolio to other businesses and thus

increase its income but at the same time ensure they reduce its reliance on the brand image
(Mohamad & Asfour, 2020).
b) Lack of expansion
Even though Almarai operates in 7 countries within the gulf region, Egypt is the only
country outside the Middle East that the company has ventured into. This limited expansion

project has limited the company’s market share. Almarai has therefore been unable to

expand its territories to new markets, limiting its market share.

a) Population increase

Opportunities

The population in the Middle East has been on the rise, with nations such as Saudi
Arabia, UAE, and Qatar at the cutting edge of development. The increased population

signifies an increased market for the company that is looking to increase its sales.

b) Technological advances

Technology is still advancing and thus presents newer opportunities for the company,

which has improved its development. To stay ahead of the competition, the company has
resorted to investing in the latest technology, thus enhancing its operations (Alotaibi,
2019).

c) Economic development
The company’s biggest opportunity is the economic development experienced in the
Middle East. More wealth created implies that the consumers have an increased purchasing

power and thus are more capable of purchasing more products from the company at an
increased frequency, which will increase sales.
Threats
a) Dependence on the oil economy
The oil market in Saudi Arabia is the backbone of the economy. The nation is,

therefore, entirely dependent on the oil economy, and even though it has invested in other
sectors, the oil sector still received huge investments from the government. This has limited

the growth rate of other sectors. Therefore, even though the government is investing in
other sectors, their investment is unmatched by the investment made in the oil sector,

making the oil industry highly profitable for the country. There is a possibility that the food
processing industry would be profitable for the country, but investments made still make

Q3.

the food and processing industry a struggling sector (AL Zubaidi & Nobanee, 2020).

Political, economic, cultural, and legal challenges

The Almarai Company operates in 7 nations, 6 of which form the Gulf States and

Egypt. Almarai Company venture in Egypt was done through a 52:48 joint venture with
PepsiCo under the joint venture name Beyti. Beyti is one of the largest dairy producers in
Egypt, with over 86 million customers. Egypt has a different government system than Saudi
Arabia, which implies that Beyti has to conform to the different regulations established in

Egypt. A big challenge with multinational companies is that they must keep up with the
policies and laws of the different nations they operate in. The same challenge applies to
Beyti, whose operations in Egypt must be conducted under the rule of law established in
Egypt (Trade, n.d).
The Egyptian pound is different from the Saudi Riyal. This means that the Saudi
Arabian currency is stronger than the Egyptian pound, and thus Beyti has to make more

sales in Egypt to match the success Almarai has achieved in Saudi Arabia. The export

market is another significant economic challenge for the company as trading conditions
worsen (Trade, n.d). Therefore, trading markets, especially in Egypt, have continued to
exercise cost control, which shows that the food processing industry in Egypt has suffered.

High fiscal deficit and strained public finances mean that the citizens in Egypt have a lower
spending power compared to Saudi nationals. This is a major economic challenge for the
company, which is looking to replicate the success they have realized in Saudi Arabia in

other regions. Economic issues such as differences in currency and trading differences
make it challenging for the company to keep up its financial performance across different

states. This implies that the financial performance of Beyti in Egypt relies entirely on the
Egyptian economy. If the economy were to get worse, the operation of the company in
Egypt would face severe economic consequences (Agreem. (2021).
The Egyptian culture is friendly and open to other cultures, especially cultures from

the Gulf States. Therefore, even though the Egyptian culture has been receptive to the joint
venture, Almarai still needs to overcome a huge challenge of cultural adaptation. Cultural
adaptation is the biggest issue that multinational companies address regarding culture.
There is a need for dairy products to be accepted by the Egyptian people and thus

considered to adhere to the country’s culture. If the products uphold the Egyptian culture,
they can avoid making lower sales due to poor reception. However, Beyti has invested a
lot in ensuring their dairy products keep up with the Egyptian culture and respects its
values. Any new product that is set to enter the company’s market must be thoroughly
analyzed and researched to ensure that it is acceptable within Egyptian culture. Therefore,
culture in a different nation presents a big challenge for the company as it looks to establish

dominance in Egypt.

Egypt has relatively higher levels of bureaucracy and numerous weak institutions,
which means that the country is reluctant to pass better policies that favor foreign
corporations. Subsequently, the Egyptian government has, over the years, been passing

policies that favor local organizations at the expense of foreign companies. Even though
Beyti is the largest dairy producer in Egypt, the joint venture still faces stiff competition
from other Egyptian dairy companies such as Kraft Foods, Farm Cheese, and Dairy Dreams

Egypt. Egypt’s competition levels are much higher than Almarai Company’s competition
in Saudi Arabia. Local companies in Egypt receive government support, ensuring they

thrive in the Egyptian market. The joint venture, therefore, faces challenges from policies
that favor local companies at their expense (Trade, n.d).

Q1.b

Conclusion

Almarai Company is a multinational dairy company that is publicly traded. The
company has established operations across the Gulf States and Egypt. As the main dairy
producer in Saudi Arabia, Almarai has established dominance within the Middle East and
is the main source of dairy products. Across the Middle East, the company has a huge brand
meaning consumers can easily recognize its products and often accept them, which has
improved sales for the company. In Egypt, the same outcome has been noted since, under

the joint venture, the company thrived from improved brand awareness. Another major
strength of the company is its product diversity, as it thrives on giving consumers various

options that improve their satisfaction. However, in Egypt, the company has had to limit
the number of products it sells to consumers since the Egyptian market has a different

culture and political system from the gulf nations. A major opportunity for the company is
that it relies on technological advances to improve its operations. Under its joint venture,
the company has ensured that the consumers in the country are receptive to the products
they offer and the technology used during production. A major challenge for the company

under its joint venture in Egypt is that it has to keep up with the policies and laws set forth
by the Egyptian government as a measure to comply with regulations. Additionally, the

country’s economy is a major determinant of the company’s financial performance. For
instance, due to economic challenges faced in a number of Gulf States, the company’s
financial performance went down in 2020.

References
Agreem. (2021). Almarai faces major challenges in 9M 2021; export markets drive up
revenue.

Performance Analysis of Almarai (August 16, 2020).

AL Zubaidi, A., & Nobanee, H. (2020). Performance Analysis of Almarai. Haitham,

Alotaibi, H. (2019). Organisational structure and the strategic planning process in
Almarai company of Saudi Arabia. Research Journal of Economics and Business

Studies, 8(11).

Mohamad, K. A., & Asfour, A. M. (2020). Is the Business in Saudi Market Sustainable?
Case Study of Almarai. IIUM Journal of Case Studies in Management, 11(2), 7-

14.

Trade. (n.d). Market Challenges.

guides/egypt-market-

challenges#:~:text=Other%20obstacles%20to%20increased%20trade,and%20non
%2Dtariff%20trade%20barriers.

‫المملكة العربية السعودية‬
‫وزارة التعليم‬
‫الجامعة السعودية اإللكترونية‬

Kingdom of Saudi Arabia
Ministry of Education
Saudi Electronic University

College of Administrative and Financial Sciences

Assignment 3
Introduction to International Business (MGT 321)
Due Date: 30/11/2024 @ 23:59
Course Name: Introduction to International
Business
Course Code: MGT321

Student’s Name:

Semester: First

CRN:

Student’s ID Number:

Academic Year:2024-25-1st

For Instructor’s Use only
Students’ Grade:
Marks Obtained/Out of 10

Level of Marks: High/Middle/Low

General Instructions – PLEASE READ THEM CAREFULLY
•
•
•
•
•
•
•
•

Report Writing
Select any publicly listed Saudi Company that operates in Europe and/or Africa, and write
a report covering the following points:

Assignment Question(s):
1. Present the study report with clear Introduction and Conclusion including your own

views.

(minimum words: 300, marks: 2)

academic papers, reputable business databases, company websites, or government
websites.
(marks: 1)
Important Notes:
•
•
•
•

plagiarism. Any instance of academic dishonesty will result in a grade of zero for
the assignment. No exceptions and no second chances!

Answers
1. Saudi Aramco, based in Saudi Arabia, stands as the largest global producer of
petroleum liquids, with integrated operations across upstream and downstream
sectors (Aramco, n.d.). The company is known for its substantial maximum
sustainable capacity to produce 12 million barrels daily, positioning it as a
significant player in the energy sector compared to competitors like ExxonMobil
(Reed, 2019). Its low production costs, abundant resources, and vast reserves help
Aramco maintain a competitive edge in both local and international markets,
stretching its operations across regions like South America, Africa, and Europe
through various partnerships and joint ventures (Ahmed et al., 2018; Weijermars &
Moeller, 2020).
Saudi Aramco’s strategic position as a global leader in the petroleum
industry is bolstered by its strong production capacity, low costs, and extensive
R&D investments. However, the company faces significant challenges, including
dependency on oil exports, transparency issues, and geopolitical risks. Expanding
its focus on CCS technology and renewable energy could help Aramco enhance its
sustainability, meeting rising global demands for environmental stewardship
(Shehri et al., 2023). Further, prioritizing transparency and good governance may
improve investor relations and support Aramco’s expansion into more regulated
markets.
Aramco’s

commitment

digital

innovation

and

environmental

performance has strengthened its competitive advantage, especially in the

international market, where demand for green practices is high. Addressing these
areas effectively can help Aramco meet the evolving needs of both local and global
markets, reinforcing its position as a sustainable energy leader.
Saudi Aramco highlights its strategic resilience and adaptability amid
global market fluctuations. The company has effectively leveraged governmental
support and is attuned to cultural and political variances within its diverse
operational territories. As Aramco continues to adapt within the international
business landscape, it demonstrates a proactive approach toward sustainability and
economic growth, aligning well with the expectations of both investors and global
stakeholders.
Aramco’s blend of government-backed support, cultural adaptability, and
strategic innovation positions it as a resilient leader in the global energy industry.
Addressing transparency, environmental sustainability, and market expansion
could enhance Aramco’s appeal to both investors and environmentally conscious
stakeholders. By balancing its foundational strengths with adaptive strategies,
Aramco is well-prepared to navigate and succeed within the diverse landscapes of
international business. This report provides an in-depth analysis of Aramco’s
strengths, weaknesses, opportunities, and threats (SWOT) and evaluates its
challenges in foreign markets using a PESTLE framework. This analysis will offer
insights into the company’s current positioning and potential strategic adjustments.
2. SWOT Analysis of Saudi Aramco

Strengths

•

Production Capacity and Global Network: Aramco operates across
numerous countries, ensuring stable production and distribution. It holds 17%
of the world’s crude oil reserves, with a substantial production capacity of 297.6
billion barrels (Fattouh, 2021). This scale is supported by partnerships with
companies like Dow Chemicals, which bolsters Aramco’s downstream network
(Ahmed et al., 2018). Additionally, it also helped in generating employment
opportunities for youths and women and boost economic growth. The strong
network of collaboration and acquisition drives the growth of the downstream
portfolio by increasing production ability (Park, 2020). Recent investments in
upstream developments and downstream value chains have strengthened its
position (Saudi Aramco, 2024).

•

Research and Development (R&D): Aramco’s R&D centers, such as the
Houston Research Center, focus on advanced technology, enhancing
productivity and innovating through seismic imaging and nano-based polymers
(Azzedin & Ghaleb, 2019). Other factors like a high volume of production
through its global presence help in maximizing the value of the downstream
business at a low cost (Krane,2021). The use of hydrocarbon resources within
its production line is the largest contributor to the competitive advantage for the
company (Reed, 2019). The open network innovation model of the company
helps in attracting new resources and capabilities in the form of human
resources within the industry. These investments support Aramco’s competitive
advantage by integrating high-tech solutions within production.

•

Low Production Cost: Saudi Arabia’s abundant resources contribute to
Aramco’s low production costs, attracting significant foreign investment and
strengthening its competitive position globally (Krane, 2021). Despite market
pressures, Aramco’s low production costs continue to attract significant foreign
investment (Saudi Aramco, 2024).

•

A global leader in the industry: Saudi Aramco’s competitors and similar
companies include ExxonMobil, Marathon Petroleum, Shell, and BP
(HLACIUC & Estera, 2022). However, Aramco remains a global leader in
integrated energy and chemicals helping create a vibrant energy sector (Park,
2020).

Weaknesses
•

Dependency on Petroleum Products: Saudi Arabia’s economy is highly
dependent on petroleum exports, exposing it to economic volatility, as seen
during COVID-19 and the oil slump situation. This dependence limits
diversification, impacting long-term growth (Belaid, 2022). The country is now
looking for foreign investments and is planning to diversify into healthcare
facilities, education, and other sectors as well (Rahman & Qattan, 2021). Any
changes in the economic growth and prosperity of Saudi Arabia have a huge
influence on several other countries directly or indirectly.

•

Corporate Governance and Transparency: Aramco’s lack of transparency
has affected its appeal to investors, raising concerns about governance. Issues
such as opaque production volumes and close ties with the government deter

international investors (Marjainé et al., 2020; Shaddady & Alsaggaf, 2020).
While Aramco has made strides in investor confidence through initiatives like
the $3 billion international sukuk issuance, transparency issues still pose
challenges (Saudi Aramco, 2024).

Opportunities
•

Growing Demand for Petrochemicals: With global economic recovery,
demand for petrochemicals and petroleum-based products is expected to rise,
presenting growth opportunities (Belaid, 2022). Recently, several countries
have entered a joint venture with Saudi Arabia to manufacture petroleum
products. Investment in petroleum and refineries will result in value creation
(Barbosa et al.,2020).

•

R&D in Carbon Capture and Storage (CCS): Aramco could invest in CCS
technologies, which can extend oil field lifespans and align with global
environmental priorities. Studies indicate that billions of tons of carbon can be
safely stored, aiding Aramco’s sustainability goals (Orr, 2018). One such use is
for oil recovery purposes which helps in driving crude oil to the surface.
Continued investment in CCS technologies can extend oil field lifespans and
align with global environmental priorities (Saudi Aramco, 2024)

•

Diversification into Renewable Energy: Aramco has the potential to lead in
hydrogen and solar energy exports. The country has already set ambitious goals
to export solar energy to Europe, which could diversify its portfolio (Rahman
& Qattan, 2021).

Threats
•

Environmental and Green Management Pressures: Aramco faces criticism
regarding its methane emissions, responsible for 4.38% of global emissions
(Toledano et al., 2020). Environmental groups scrutinize its efforts toward
sustainability, warning banks of its market float and the lack of efforts in
dealing with environmental concerns (Mohammad et al., 2020).

•

Price Volatility: The petrochemical industry experiences frequent price
fluctuations, impacting Aramco’s revenues. Subsidies in the local market also
erode Aramco’s competitive edge globally (Krane, 2021).

•

Geopolitical Risks and Terrorism: Terrorism remains a significant threat,
with Aramco sites in the Persian Gulf often targeted. Frequent terrorist attacks
have weakened the sector time and again and have shown the inefficiency of
the government in protecting its site (Nyadera & Islam, 2020). Such attacks
impact operations, resulting in disruptions and increased security costs
(Tanchum, 2019).

3. Political, Economic, Cultural, and Legal Challenges in the U.S. Market

Political Factors

Aramco’s operations in the U.S. are shaped by both international and domestic
policies (Sian et al.,2020). Political tensions, especially around oil production and
pricing, often put Aramco under scrutiny. Recently, the U.S. urged Saudi Arabia to

increase oil production, reflecting the complexities of operating within a politically
charged environment (Sian et al., 2020).

Economic Factors

Saudi Arabia’s economy heavily relies on oil, with 75% of its revenue from
petroleum, which constitutes 90% of imports. This dependency empowers Saudi
Aramco to control international oil production due to vast reserves. Aramco
benefits from the strong economic ties between Saudi Arabia and the U.S.,
particularly through oil exports. However, fluctuations in oil prices due to global
demand shifts can impact profitability, which is critical given Aramco’s large share
in the U.S. energy market (Rahman & Qattan, 2021).

Social Factors
Cultural differences between the U.S. and Saudi Arabia also influence Aramco’s
operations. Aramco must navigate distinct business norms and regulatory practices
that shape operational expectations and influence how it engages with local
communities. As a state-owned enterprise, Saudi Aramco is expected to prioritize
local employment and contribute to improving the country’s socio-economic status
(Al-Asfour et al., 2022). Additionally, it plays a significant role in community
development through its commitment to corporate social responsibility.

Technological Factors

Saudi Aramco has implemented advanced technology in all its projects in the last
years which was one of the main reasons for the success of these projects (Azzedin
& Ghaleb, 2019). On the other hand, the company tries to depend on green
technology in its projects as part of its role in the community (Krane, 2021).

Legal Factors

Oil companies, including Saudi Aramco, face environmental challenges leading to
legal issues. In response, Saudi Arabia enacted its first environmental legislation in
2001 to address industrial pollution (Algamdy, 2022). The Environmental Impact
Assessment Laws require companies to adopt sustainable practices and advanced
technologies, such as air and carbon filters, to minimize environmental harm
(Rahman & Qattan, 2021). In the U.S., stringent environmental regulations create
legal hurdles for Aramco. The company faces regulatory pressure to reduce
emissions and adopt sustainable practices. Compliance with such regulations is
essential for maintaining its license to operate within the market and aligns with
growing consumer expectations for corporate responsibility (Toledano et al., 2020).

Environmental Factors

The oil industry inherently faces environmental challenges (Mohammad et al.,
2020). Saudi Aramco has implemented effective pollution control measures,
including water conservation through flow meters and enhanced wastewater
management. Additionally, the company has initiated recycling awareness
programs to educate the community about recycling practices (Mohammad et al.,

2020). These steps reflect Aramco’s commitment to reducing its environmental
impact while promoting sustainable practices.

4. References

Ahmed, J. U., Sultana, H., & Khan, M. M. (2018). Saudi Aramco: A blend
between profit and politics. FIIB Business Review, 7(2), 88-99. Retrieved
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