Business Expansion Of Alibaba Group

Globalization is a growing part of everyday businesses. This is the process of interaction and integration among people, companies, and governments of different nations. With the world of online retail, the buying and selling to one person to another has grown drastically. There has also been a substantial change in technology and what we as people can do in today’s time rather than in the past. Amazon is a huge retail giant and buying and selling items is one of their key functions. The impact made on Amazon is nothing but an advantage. Amazon currently is the 56th largest company in America by market capitalization. Being one the largest retailer around, 15th in the nation at that, Amazon has made a name for themselves. Amazon has made some very substantial growths and with these opportunities they face they can make even more advances in the future. (Globalization 101, 2016)

Growing through integration can have a positive effect on the competitiveness of a business in that firms are able to buy out or merge with other large powers in the market to make a ‘super power’ in the market. This ‘super power’ gains a larger % of the market as the two original

Currently, there are more than 20000 people who work for the Alibaba Group. There are more than 70 offices in China, Singapore, India, the United Kingdom and the United States. Alibaba is focused on building a collaborative and prosperous e-commerce ecosystem that benefits merchants, consumers and the economy as a whole.

High cost of entering new markets International growth is expensive. Entering new markets with a new brand

Many businesses jump to the conclusion of thinking that if a company can be successful in one area, that it can be just as successful in another. Before making this assumption, businesses need to expand on potential challenges that they might encounter

Coming out of the first year of the merger, what new opportunities should the new “Defining Entity” pursue in order to grow business?

In 2014, Alibaba accounts for about 80 percent of all online retail sales in China, with 279 million annual active buyers and 14 billion orders. Its gross merchandise volume(GMV) surpasses the combined total of Amazon and eBay, recorded an enormous amount of $248 billion, which was 11 times the GMV of the second player in the field, JD.

2. Expanding the international market within a period of 4 years by heavily investing in power economies such as China, India, Japan and some parts of Africa.

It would be virtually impossible for a new company to reach the magnitude of inventory and status that Amazon maintains. When visiting Amazon, the number of products and services it offers is mind-blowing. Amazon has been in the internet marketplace for about thirteen years now; it would be extremely difficult for a start-up company in the industry to raise enough capital to even compete with Amazon on a lower level. The experience of enjoying low pressures from new entrants make Amazon believe that their absolute competitive advantages in patented technology, such as 1-Click ordering, operational model and “sell anything” mission could be directly copied and even leveraged in the foreign markets where the online retail industry have not developed or matured.

The Alibaba group has thrived in the Chinese e-commerce sector from its inception in 1998. They currently account for over 70% of online shopping in China and delivered annual revenues of $636 million in the 12month period ending June 2009 (case p1-2). Alibaba’s successes are due to multiple factors that have allowed them to create corporate advantage, and thus establish market leadership in China (Case p1). The configuration and coordination of Alibaba’s

the local competition. Most cases fail because those companies underestimate the local competitor. When the Alibaba found, they are goal is beat the companies like Amazon and Ebay. There is no one believe Alibaba will achieve their goal during that time and no one try to make some barrier to stop their expansion. This underestimation help Alibaba became one of the heavyweight company in the world and Ebay lost the entire market in China.

As for Alibaba.com, it earns secondary revenue through its Gold suppliers accreditation which promises reliability. Though Alibaba Group is famous for its primary site Alibaba.com, its first business now accounts for only a small part of its portfolio (Osawa, 2013), and is often dogged by criticisms from the finance world, notably referred to as “the worst asset that [Alibaba Group] has” (CNBC, 2012). On the other hand, Amazon sells its own products such as its Kindle and offers additional services such as streaming (Rayburn, 2011). It also deals with web design for external companies looking into e-commerce (Layton, n.d.).

There are always business risk when it comes to expanding a company, especially from an international standpoint. There are many strategic risk that needs to be evaluated in order to expand the company successfully. Examining the possible risk of foreign currency exposure, basic functions of international banking/financial market, support of long term financing of operations, and assessment of opportunities that can be implemented within the company. There are risk on three dimensions of international finance, economic trends of the country, impact of globalization and monetary system. All of these situations will be discussed in this paper.

It has core competency in its industry and has been in the International Strategy for long time. So, next opportunity would be for a Transnational Strategy following the incremental strategy where it should be focusing upon. In order to have it the Integration and Responsiveness should be high. It has successfully addressed the concerns related to CAGE framework by addressing the following concerns

What aspects of eBay’s strategic capability are easily copied by new entrants and if so would you copy them and how would you copy them?