The impact of the proliferation of the Israeli products on the performance, sustainability and development of the Palestinian products at the local market

Abstract

This paper examines the influence of various variables on competing the Israeli products at the Palestinian market. These variables are (competition for quality, corporate management practices, procedures and laws, update and development, government policies and procedures and follow-up and evaluation). A survey has been conducted to examine the hypotheses of this paper. The population consists of directors of organizations, dealers, business owners, government employees, marketing managers, workers and customers. 500 questionnaires were distributed to the targeted respondents in Palestine using the random sample. 378 questionnaires were returned which represents 75.6% of the distributed sample. The finding of this paper are: (1) the current practices of the follow-up and evaluation of Palestinian products have a negative competitive impact (2) there is a positive role of the administrative practices of the Palestinian companies on competing the Israeli product. (3) there is a positive role of the quality of Palestinian product on competing the Israeli product. (4) there is no role of the current Palestinian procedures and laws on competing the Israeli product. (5) there is a positive role of updating and developing the Palestinian product to compete the Israeli product. (6) there is a negative role of the policies and procedures of the Palestinian government on competing the Israeli product. Based on the previous findings, this paper suggests the following recommendations: (1) the Palestinian producer should increase the quality of Palestinian products. (2) the current Palestinian procedures and laws that are related to the competition should be developed to meet the requirements of competition. (3) the Palestinian government must reform its competition policies and procedures. (4) the current practices of the follow-up and evaluation of Palestinian products should be updated. Corresponding author: Asri Ahmad Abdalwahab Sammoudi Email addresses for the corresponding author: asri.sammudi@aaup.edu First submission received: 13th June 2019 Revised submission received: 29th August 2019 Accepted: 14th September 2019 Introduction There is no doubt that competition among organizations is a fundamental constituent in economy and offers great benefits. It is considered as a leading motive in improving economic growth and in the development of products quality, increasing their quality and lowering their prices (Dasgupta et al, 2009; Wen-Cheng et al, 2011). Thus, it's worth mentioning that the increasing number of suppliers of various products, goods or services is a necessity for improving and developing products as the result of the competition, which is a fundamental principle in the market economy (Petison and Johri, 2006; Hamel & Green, 2007; Shapiro 2012). There are a set of requirements needed for getting effective benefits of competition. These requirements, for instance, the availability of an appropriate economic climate that helps to create conducive environment for business; including elements such as industrial and service infrastructure and financial and banking facilities. In addition to the availability of government support in various fields such as tax benefits, customs and financial support in order to achieve a healthy competitive environment that serves the consumer. Add to this the competitive opportunity in foreign markets as a direct result of the development and improvement of local products (Dyer & Singh, 1998; Romero & Martinez-Roman, 2012). Journal of Business and Retail Management Research (JBRMR), Vol. 14 Issue 1 October 2019 www.jbrmr.com A Journal of the Centre for Business & Economic Research (CBER) 135 In this paper, the researcher aims at examining and exposing the competitive reality between the Israeli and Palestinian products, the different circumstances surrounding them, and the facts that highlight the difficult situation experienced by Palestinian companies as a result of the Israeli companies' appropriation of Palestinian markets. This is an extension of the reality of Israeli control over Palestinian capabilities. The movement of various production elements of the captive Palestinian economy which suffers from a lack of the economic fundamentals that enable it to rise and develop. It's widely known that the Israeli side has an absolute control over the crossings, borders, ports, airports, and the accompanying checks of imports and exports, goods or services. This means that there is a full control over the movement of goods and labor, the whole means of production and operations in both directions. As a result, these obstacles altogether weakness the Palestinian economy and makes it fragile and dependent on the Israeli one. Unfortunately, this difficult reality and special circumstances created two types of economies competing in one market. Each one belongs to a completely different economic system, political and legal environment in which this competition occurs unilaterally. This means the Israeli products compete the Palestinian ones in Palestine's own markets unilaterally. In other words, (PA) are not allowed to sell or market their own products at the Israeli market. The Israeli side accept small quantities and varieties of the Palestinian products to enter its borders that are completely controlled by the them. In consequence, the researcher introduces a vital issue titled the effect of the increase of Israeli products in the Palestinian market on the performance, continuity and development of the Palestinian national products. In fact, Israeli companies take advantage of the Palestinian markets easily which is considered as an important part in supporting the Israeli economy. Despite the fact that the Israeli domestic production reaches about $291.4 billion in 2013 with 2% yearly growth; the Palestinian side and in the same year reaches (9.7) billion dollars in which mostly comes in the form of international aid (World Bank, 2013). To add insult to injury, the Palestinian companies are facing great challenges and obstacles. They, for instance, face companies that are well-qualified and have the competitive and financial power and the government support. In contrast, the Palestinian companies rely basically on individual efforts and with small capital. There are also some volatile foreign investments, but due to many financial and tax consequences and unstable economic and political conditions altogether led to an increase in their vulnerability and sometimes increase in their competitiveness and sustainability. Thus, to the best of my believe and knowledge in respect to the subject of this study and my choice of it in terms of reviving the Palestinian economic, social, national and consumer awareness by revealing the danger of flooding the Palestinian markets with Israeli goods and the consequent significant economic damage that affect many different economic sectors which depend on the Palestinian productive sector. This awareness participates in the development and sustainability of the Palestinian local products. Unfortunately, compared to the Israeli ones, the Palestinian products are not able to compete with the Israeli one due to their quality, industrial and technological capabilities, financial facilities and government support. In addition to the impact on the Palestinian consumer and consumer loyalty who is also an easy victim as a result of the availability of these products in the markets in large quantities and at prices that are often less than the Palestinian counterparts offer. However, to achieve the desired objectives of this paper, a survey study is conducted. Problem Statement This paper examines the impact of the availability of the Israeli products in the Palestinian market on the performance, continuity and development of Palestinian economy. Palestinian companies find themselves in a challenge. In fact, they face companies with competitive and financial strength and large government support; whereas the Palestinian companies rely on individual efforts and relatively small capital, and some volatile foreign investments due to many financial and tax implications and unstable economic and political conditions. This reality increases the vulnerability more than the weakness of competitiveness and continuity. As a result the researcher examines this issue from various aspects in order to answer as far as possible this important problem. The problem of the study is clarified through the following questions: 1. What is the competitive effect of the Palestinian products quality on Israeli products? Journal of Business and Retail Management Research (JBRMR), Vol. 14 Issue 1 October 2019 www.jbrmr.com A Journal of the Centre for Business & Economic Research (CBER) 136 2. What is the impact of the Palestinian companies' administrative practices on competing Israeli products? 3. What is the impact of the Palestinian procedures and laws on competing Israeli products? 4. What is the impact of developing and modernizing Palestinian products on competing Israeli products? 5. What is the impact of the policies and procedures of the Palestinian government on competing Israeli products? 6. What is the impact of the follow-up and evaluation of Palestinian products on competing Israeli products? Objectives This paper comes to achieve the following objectives: 1. Exploring the impact of increasing the Israeli goods at the Palestinian market on the local products. 2. Explaining the competitive situation between some Palestinian and Israeli products. 3. Conduct a Poll targets Palestinian consumers' opinions on boycotting the Israeli products and encouraging national industry. 4. Clarifying the government's role in controlling and regulating the entry of the Israeli products into the Palestinian market. 5. Exploring the laws and procedures implemented by the Palestinian government in terms of supporting the Palestinian institutions in facing the Israeli companies. 6. R