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Economy Of Brunei Darussalam And Authorities Expenditures Patterns Business Essay

This article is written on the instructions of the Lecturer of Strategic Management course, Dr Mona and Dr Sainah. The purpose of this report is to guide the federal government, Ministry of Industry and Principal Resources, about how it can achieve industrial global competitiveness for Brunei Darussalam's long-term sustainability and development which is targeted on the fisheries industry. It is based on my very own knowledge, ideas and some information collected from the relevant books and websites. Suggestions have also been given about how Brunei can perform global competitiveness and global competitive advantages in fisheries industry.

1. 1 Current economic climate of Brunei Darussalam

The current economic climate of Brunei Darussalam is denominated by the essential oil liquefied gas industries and Administration expenditures habits. The export of Brunei Darussalam includes three major commodities which can be crude engine oil, petroleum products and liquefied gas. Japan, america and ASEAN countries are the primary destination for Brunei's export.

The Federal government of Brunei Darussalam has inserted a new stage of development in its drive towards economic diversification. It is encouraging to note that the contribution from the non-oil and gas-based sector of the economy, as shown in the contribution to the gross local product has persisted to increase. After that, the amount of institutions in the private sector has increased from yr to season.

The encouraging development was initiated by the Government's moves to promote the development of the private sector as the engine unit of growth to achieve diversification. A range of legislation designed for international business and carefully designed to permit flexibility and cost-effective capabilities which will include a full range of facilities necessary for the efficient carry out of global business have been put in place (Brunei Industrial Development Power, n. d. ).

1. 2 Fisheries Industry in Brunei Darussalam

In order to away from the reliance on oil and gas sectors, fisheries has been determined as one of the potential industries which could donate to the diversification of Brunei Darussalam's current economic climate. As such the federal government is giving a number of incentives for the commercial fisheries development. Currently, Brunei Darussalam continues to be importing about 50 percent of its fish requirements whilst the fisheries potentials in our country are predicted to be sustainably well worth at least $200 million. With opportunities from the neighborhood take and aquaculture business and the exciting region, Brunei using its strategic location can act as the Regional Centre (HUB) for the handling and syndication of export and transfer of sea food products to the international market. The highly accessible coastal highway, modern seaport and airport terminal facilities, all within easy reach, add towards feasible investment potentials in the fisheries sectors (Ministry of Industry and Major Resources, n. d. ).

Fisheries industry in Brunei comprises of three sectors which can be capture fisheries, aquaculture and seafoods processing. The catch fisheries sector believed to add at least B$ 112 million, aquaculture sector B$ 71 million and seafood processing sector of at least B$ 17 million. Brunei provides an excellent environment for the aquaculture industry as it uses environmentally friendly routines and has clean, unpolluted waters relatively clear of fish pathogens. Our country has a drinking water region of 38, 600 square kilometres and a coastline of 160 kilometres. Although it is the tiniest country in your community, Brunei has one of the best per capita seafood consumptions at around 45 kilograms per calendar year.

In its effort to boost the contribution of fisheries for the national GDP, the Government is beginning opportunities to get more investments in shoot fisheries sector especially in pelagic or tuna fishing. Fishing licenses are for sale to functioning purse-seiners, tuna long-liners in the Brunei zone of fishing areas. With around population of about 400, 000, the total annual usage of fish is about 15, 500 metric plenty. This should be calculated as potential market. For example, if 50% of 15, 500 metric plenty is imported, the potential substitute market is 7, 750 metric tons.

The aquaculture sector offers huge opportunities and is also very lucrative with estimated potential to be well worth B$ 71 million per annum based on the prevailing available sites. Primary areas suited to aquaculture have been identified and basic infrastructure like access roads, electricity and sea water supply and cage culture have been offered by the federal government of Brunei Darussalam. Furthermore, Brunei has lots of advantages such as clean and unpolluted environment, absence of typhoons, floods and other natural phenomena.

Currently, the Government has also determined potential areas ready for development with laid down essential basic infrastructure. In the mean time, the fish processing sector continues to be relatively at a tiny scale despite the big amounts of processors and a joint-venture company mixed up in production of a number of fisheries products. More rooms are still available for growth and further development. In Brunei, Semaun Aquaculture Sdn Bhd has the highest market share of the current fish suppliers.

Apart from that, with the existing push to make a healthy society in Brunei Darussalam, the neighborhood people is taking serious view in increasing the consumption of fish as compared to other resources of protein. Seafood is a staple diet of an good most population and it is almost essential in one's daily diet. Marine seafood has been the principal source of protein for the folks of Brunei. The per capita fish ingestion is one of the best in region at around 45 kilograms per calendar year. It is anticipated that the continuous increase in the population will increase the demand and with the current liberalization of trade, opportunities for export are there, even though as it is, the neighborhood demand and selling price in itself already make the fisheries industry attractive (Fisheries Section, n. d. ).


It is important to analyse both national and global environment of fisheries industry in contributing towards Brunei Darussalam's as a land of opportunity. It could be used for analyzing competition in various national marketplaces.

2. 1 Competitive Analysis

In order to attain commercial global competitiveness, it is determined by the power of a company or a region to provide products and services that meet the quality requirements of the local and world market segments at prices that are competitive and offer adequate dividends on the resources utilized or consumed in producing them (Daft and Marcic, 2004, pg. 55). Industrial global competitive analysis initiates by concentrating on the global overall industry when a nation competes. It is vital to analyse competitive makes on the market environment to recognize opportunities and threats.

According to Michael E Porter's well-known construction, there are five makes that shape competition which are the risk of entry by potential opponents, the strength of rivalry among founded companies in a industry, the bargaining electricity of purchasers, the bargaining electricity of suppliers and the closeness of substitutes to the industry's products. Therefore, it is important to formulate appropriate tactical replies as industry conditions change over time.

Barriers to Entry

Brunei's fisheries industry as a potential competitor has the capability to go into global market. The barriers to access is high as it is costly. It requires high capital requirements and operational costs. Important obstacles to entrance include economies of level, brand loyalty, total cost advantages, customer turning costs and federal government legislation (Hill and Jones, 2009, pg. 46). A significant strategy is finding ways to minimise those barriers. To be able to achieve economies of level, it includes cost reductions gained through mass-producing a standardized productivity and discounts on bulk acquisitions of raw material inputs. If the Government decides to type in on a huge scale such such as seafood handling sector, it must improve the capital required to build large-scale development facilities and carry the high dangers associated with such an investment.

The Authorities can create brand loyalty through continuous advertising, patent safeguard of products, product advancement achieved through research and development programs, an focus on high product quality and good after-sales service. Local and overseas market segments consider Brunei Darussalam's foods synonymous with high quality and being safe 'halal'. The market for halal products within and outside the region is huge. There are lots of well-known countries with high market show in global fisheries industry about the world. Thus, indicating high barriers to accessibility. (TradeInvest Africa, n. d. )

Nature of Competition

The power of your competition in the global fisheries industry can be viewed as high due for some factors that happen to be industry competitive structure, demand conditions, cost conditions as well as the elevation of exit obstacles. This is centered on some important aspects mainly on the price war. It is difficult to differentiate products in this industry and as a result the best strategy is to try to minimise its costs.

Industry structures range and different structures have different implications for the level of rivalry. Demand for fishes is usually high and growing demand tends to moderate competition. Exit barriers include the need to keep up an expensive assortment of resources at or above some least level in order to get involved effectively on the market. Hill and Jones (2009, pg. 273) stated that competing in the global industry typically face two types of competitive stresses which are stresses for cost reductions and pressures to be locally responsive.

Bargaining Electricity of Buyers

In any industry including fisheries, the bargaining electricity of purchasers is usually high particularly when buyers across the world are demanding for better product quality and service. Therefore, powerful buyers should be viewed as a threat. For instance, the buyers can use their purchasing vitality as leverage to deal for price reductions when they purchase in large volumes.

Bargaining Electric power of Suppliers

This is the ability of suppliers to raise suggestions prices or raise the costs of the industry in different ways. Inputs include materials, services, labour etc. It is important to notice that changes in one or more pushes in the macroenvironment can affect the competitiveness of the industry as well as the attractiveness of the industry.

Threat of Substitutes

The life of close substitutes is a strong competitive hazard as this limitations industry profitability. They could be both immediate and indirect substitutes. Immediate substitutes are other styles of seafood available in the global market. The consumers will be more likely to buy good deal fresh fishes or sea food products. Indirect substitutes are other styles of food such as poultry, beef and fruit and vegetables.

2. 2 SWOT Analysis

SWOT analysis is an essential technique to understand the advantages and weaknesses of the business enterprise as well as taking a look at opportunities and risks. By identifying the weaknesses and find out the risks can be easily supervised and prevented preceding to avoid hazards in the future.


The Federal government play an important role as they help SMEs in starting up business in terms of development of basic infrastructures such as location of fish plantation. In aquaculture sector, consumers can enjoy fresh and good quality seafood. For example, the retailers can make any fish they want at the fish farm and the price depends on weight. Apart from that, it is easier to hire foreign employees to work in virtually any Brunei's company since the Federal give priorities.


In fisheries industry, Brunei may insufficient specific experience and knowledge in working the business. They also lack in marketing activities which is one of the main aspects in businesses. Technology and lack of skilled workforce are also other issues.


Fish and other form of sea food is a staple diet of an good most the population and it is almost necessity in one's daily diet. The development in consumption of fishes presents an opportunity for businesses to grow their sales amount by targeting at the prime segment.


There are various kinds of diseases that can infect fishes. The types of seafood diseases are protozoan, bacterial, fungal, parasitic and viral. As the seafood that lives in available sea can easily be afflicted by the condition. If this occurs, the company or land will face major loss and also have to quarantine it. Most significantly, red tide becomes the main concern because this may endanger the seafood rearing. This can be viewed when Brunei encountered red tide, the demand levels for fish drop sharply as worries for infected fish. Although, advice and directions had received but nonetheless the consumers were doubts to buy it.

Brunei has a tropical climate, with even temperatures which range from 23C to 32C (73 - 89F). Humidity is high about 80% throughout the year and gross annual rainfall varies from about 275 cm (110 in) across the seacoast to more than 500 cm (200 in) in the inside. Rainfall is heaviest during the northeast monsoon season, especially during November and Dec. Heavy rainfalls can affect the pH value of seawater. If too much rain, the seawater can transform this particular into acidic (above pH7). Thus, many fishes will pass away and lead to losing production of seafood to the company.

Meanwhile, although Brunei is safe from unpolluted environment, but manmade pollution is inevitable such as olive oil split. This has become the menace to the seafood farm and angling areas.


One of the objectives of this article is to reach at certain advice and suggestions that may donate to remedial or facilitator actions in which subsequently could accelerate the development of SMEs such as fisheries industry in Brunei Darussalam to be known and compete globally.

3. 1 Global Strategy

It is a proper guide to globalization that involves the copy of information, culture, technology, workforce and many more. It really is effective when variations between countries are small and competition is global. It includes advantages in terms of economies of size, lower cost, coordination of activities and faster development development. Furthermore, Brunei techniques wide open multilateral trading plans such as Asean Free Trade Area (AFTA) and Basic Agreement on Trade and Tariffs (GATT). These wide open trade regulations are steady with Brunei's work in seeking outward looking financial policies that will assist the united states in broadening its commercial and principal resources-based industries. THE FEDERAL GOVERNMENT of Brunei Darussalam can implement global standardization strategy which targets increasing income through cost-efficiencies arising from economies of range and economies of location. Thus, business model is dependant on going after a low-cost strategy on a sizable global scale (Hill and Jones, 2009, pg. 279).

3. 2 Marketing Strategy

The business will not promote itself, advertising and offers will be the lifeline of the business. The Government should encourage entrepreneurs or companies to be expert in marketing activities. The marketing functions can be split into sales preparation, corporate price insurance policy, advertising, product design as well as offering methods. The entrepreneurs who sell their products themselves experience issues in all areas of marketing. Fisheries industry may face difficulties in marketing products due to low quality, lack of knowledge of market segments and marketing skills. In addition, this industry often lacks the knowledge to explore the market markets. The dog owner entrepreneur often has no special skills in these matters and will not know where you can obtain reliable information about market developments, advertising opportunities and better marketing programs. They also lack the resources to market and promote their products.

3. 3 Market Development

Product quality is the primary factor in marketing. Various options may be studied to aid fisheries industry in expanding their markets, both locally and internationally. The following steps may be studied to: create institutions to improve product quality, encourage them to take up franchises and assist others to build up franchises, provide additional incentives to these to participate in trade fairs both at home and abroad, give special awareness in Administration procurement, make better effort by Authorities for growing marketing and management skills and institute special marketing plank to handle the marketing of Brunei products.

3. 4 Market Access

Market access at the national and international level should be boosted by allowing fisheries industries for taking benefit of the opportunities for market growth through the adoption of digital commerce. THE FEDERAL GOVERNMENT should provide better information on markets, make available electronic directories on business matching and facilitation services and assist them to gain access to the export market through joint trade and investment promotion missions. The Government may consider imposing some tariff on those products that are competing with Brunei products until such time they are able to compete with overseas products. Since an gratitude of the Brunei dollar will improve the price of Brunei product, the Government should try to adopt suitable options so that reasonable stability in the exchange rate may be performed and taken care of.

3. 5 Competitive Advantage

The key to understanding competitive benefits is appreciating how the several strategies can create activities that fit alongside one another to produce a region unique or different from its competitors and in a position to consistently outperform them. Brunei should has a good professional business model in order to gain a competitive benefits and achieve superior success and profit growth. The most effective aspect is distinctive competencies. Brunei's fisheries industry business model should encompasses the totality of how it will select its customers, define and differentiate its product offerings, create value because of its customers, acquire and keep customers, produce goods or services, lower costs, deliver those goods and services to the marketplace, organise activities within the industry, configure its resources, achieve and support a high level of profitability as well as grow the business as time passes (Hill and Jones, 2009, pg. 6).

Individual countries including Brunei have their own countrywide competitive benefit which suggests their global economic value. Regarding to Michael Porter, there are four traits of a countrywide or country-specific environment which have an important effect on the global competitiveness that happen to be factor endowments, local demand conditions, competitiveness of related and supporting industries and depth of rivalry. This platform can help assess how challenging it might be to type in global market segments. Factor endowments will be the cost and quality of factors of development. Brunei's fisheries industry considers has good physical infrastructure such as plug-ins, Muara Export Zone, Meragang Hatchery, Aquaculture Development Centre and many more. This might the competitive edge that Brunei looks forward to. Alternatively, Brunei benefits competitive advantages if in a position to meet or surpass the high standards of products quality by home buyers before seeking to break into the global market like Western Land. Hill and Jones (2009, pg. 102) said that to maintain competitive advantages requires concentrating on efficiency, quality, development and responsiveness to customers as well as expanding distinctive competencies.

3. 6 Global Expansion

In order to attain professional global competitiveness for Brunei Darussalam's long-term sustainability and development, expanding globally can permit to increase profitability and profit expansion. Some things to consider are expanding the marketplace, realizing cost economies from global volume level and noticing location economies. The proper issues are to decide which foreign market segments to enter in, when to get into, on what level and what kind of means should use to increase globally. After that, establishing a jv with a overseas company is another alternate for entering a new market.

More rooms can be done for Brunei to enter in the European Region (UN) market to be able to promote local fisheries products (Brunei Economic Development Panel, n. d. ). One important part is to meet international specifications for export. The Hazard Research Critical Control Details training should be organised constantly by Fisheries Section (The Brunei Times, 2008).

3. 7 Improving Fisheries Management

This should concentrate on all functional costs and processes including infrastructures, facilities, technology, workforce, raw materials and so on. One of the success factors of industry, good management skills in both standard and business management are an essential factor for the success of industry. Inadequate management and technological inability is a very important constraint to industry development. There can be an increase in the amount of competitiveness of home and global market segments which gives climb to a larger need for certified and well-equipped managers and business leaders. All critical indicators of development should be better such as adoption of new and suitable technology. Fisheries management could be further improved by moving towards maximum sustainable yields, ensuring economical management of fisheries and matching fishing work to available resources (Europa, 2007).


Fisheries industry has great probable that contribute to the diversification of Brunei Darussalam's current economic climate. This industry can reach the global market segments on a large scale and compete with foreign products. It is important to analyse both the nationwide and global environment in order to achieve industrial global competitiveness and global competitive advantages. In my opinion, the best advice is focused more on business management especially marketing strategy. It's important to enhance industry dynamism by facilitating access to finance, marketplaces, technology, recruiting and information. It isn't the only real responsibility of the Government. Private corporations themselves must anticipate to play a greater role.

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