Saudi Arabia is one of the world’s wealthiest nations per capita and, through possession of a large share of the world’s oil resources, an economic power. However, oil continues to dominate exports, but industrialization efforts of the 1980s have led to a considerable diversification, with a range of manufactured goods being produced. The economic success of Saudi Arabia is built in part on its comparative advantages and on overcoming its disadvantages. Although the government strongly supports the free market economy based on competition, Saudi Arabia is yet to succeed in global competition, but the relative decline in its competitiveness demands a reexamination of its national competitive advantages. The paper analyzes the competitive advantages of Saudi Arabia with Porter’s model. Porter’s model generates various alternatives for a nation to gain a competitive advantage. However, these alternatives are not prescriptive. The four factors of Porter’s model are the basis for analyzing Saudi Arabian competitive advantage.