Strategic Issues Faced by Alibaba in Relocating to US Retail Market

Introduction to
strategy

Introduction to strategy 1
Executive summary
This report states the strategic issues to be faced by Alibaba while relocating to the US retail
market. Alibaba is a leading e-commerce brand based in China. The company is having a
strong financial position and the sales and revenue have grown at a fast speed in the last four
years. The active users of Alibaba have grown substantially in 2018. The company invests a
large amount each year in research and development. The international expansion is full of
challenges for Alibaba along with the challenges comprising political, technological and
more. After attaining a strong position in the Chinese market the company expects to attain a
significant market share in US. The report has defined the major strategic issues to be faced
while relocating in US. The strategic analysis has been made by undertaking
tools/frameworks such as PESTEL analysis, Porter’s five force analysis, SWOT analysis, and
VRIO analysis.
Finally, it can be determined that it would be a great opportunity for the company to relocate
to the US retail industry mainly for e-commerce.

Introduction to strategy 2
Contents
Executive summary..................................................................................................... 1
Introduction............................................................................................................... 3
Background............................................................................................................... 3
External analysis......................................................................................................... 4
PESTEL framework..................................................................................................... 4
Porter’s five forces framework........................................................................................ 6
Internal analysis.......................................................................................................... 8
VRIO analysis............................................................................................................ 9
Recommendations..................................................................................................... 11
Conclusion.............................................................................................................. 12
References.............................................................................................................. 13

Introduction to strategy 3
Introduction
Alibaba is a renowned e-commerce corporation in China. Alibaba is specialized in retail, e-
commerce, the internet, and technology. It is the foremost platform for international
wholesale trade. The company serves millions of purchasers and suppliers about the globe.
The company has made decision to relocate its headquarter and warehouse to US in order to
grow and attain competitive advantage. Alibaba expects to tap into the robust power purchase
parity of the American consumers. In this whole scenario, Alibaba is conscious of the
competitor’s power in US. The ban on Huawei’s expansion in US has created opportunity for
Alibaba. Therefore Alibaba has decided to thorough analysis and comprehends US as a host
country before setting. This report identifies the issues which can be faced by Alibaba in
relocating to US.
The PESTEL framework has highly recommended the issues to be inhibited by the relocation
of Alibaba in the US. The competitive industry forces have been paid close attention by
explaining Porter’s five forces framework. A framework like VRIO is also helpful in
identifying the strength and resources to establish a position in the host country.
Background
Alibaba was formed in 1999 in China. The company believed that the internet has a great role
in empowering small businesses to power revolution and technology to progress and contend
more successfully in the domestic and international economies. Alibaba transforms the way
business markets by making use of technology. It assists in engaging customers and conducts
operations in more efficient way. Alibaba brings products in more than forty foremost
categories comprising machinery, consumer electronics, and apparel. The company is having
aim to make tranquil do business everywhere.
Alibaba is having business comprising Taobao, Tmall, AliExpresss, Alibaba.com, 1688,
Alimama, Alibaba Cloud, Ant financial and more. Since its launch of the first website,
Alibaba is helping small Chinese exporters and enterprises to retail globally. At present, the
company has developed into an international leader in online and mobile commerce. Alibaba
offers products in more than 190 nations along with exchange of thousands of emails with the
suppliers on the stand on a regular basis.