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Running Head: INTERNATIONAL BUSINESS 1Globalization: Opportunities and Threats
INTERNATIONAL BUSINESS2IntroductionA Multinational Corporation (MNC) is an organization, which has its head office in one that isknown as home country and runs its business in some other countries, which are known as hostcountries. As the term indicates that multinational corporation is a business entity, whichoperates its business in more than one country. When an organization expands its businessglobally, then it may have some opportunities and threats from this globalization. The mainobjective of this essay is to discuss the opportunities and threats, which are developed byglobalization. The discussion will be done by looking at an MNC from developing market. Theorganization, which is taken into consideration here, is Alibaba.com that is China based companyand expanded its business globally. This essay will highlight the opportunities and threats forAlibaba.com in international market of Australia. It will analyze the differences betweendeveloping the market in home nation or host nation. The threats to the company will beanalyzed by looking at some external and internal factors of home and host country, i.e. Chinaand Australia.Company DescriptionAlibaba Group Holding Limited is an e-commerce organization, which is based in China.Alibaba.com facilitates the service transactions between two different organizations. It offersbusiness to consumer, consumer to consumer and business to business services via its website.Other services, which it provides, are online payment services, search engine for shopping andcloud computing services. Allibaba Holding established its operations in the year 1999 and itwas found by Jack Ma. In the year 2017, the revenues of the company are ¥158 billion. With thisrevenue, the company has become the biggest retailer in the area of e-commerce and operatingits business operations in over 200 nations (Lashinsky, 2007). This e-commerce organization hasturned into the most leading e-retailer in the world by attaining revenues and sales afar to majorcompetitors, like; Amazon, eBay, Wal-Mart etc.Globalization
INTERNATIONAL BUSINESS3Globalization is the process of growing the business and economic interdependence amongseveral countries. Generally, globalization is categorized into two parts, like; globalization ofproduction and globalization of markets. Globalization has a major impact on the businessenvironment with offering development to the Multinational Corporation. But the organizations,which have been successful in other foreign countries, do not always get success in thedeveloping market. For an organization to be successful in emerging market, the companiesrequire understanding the local environment by giving time and resources (Baylis, Owens andSmith, 2017). The organizations may have various opportunities and threats in foreign market.Opportunities of GlobalizationGlobalizing the business can have a huge impact on the decision makers and process of decisionmaking process for developing interconnected decisions for expansion. The decision makershave to make the decisions regarding whether the organization should expand in respectivecountry. This can be determined by looking at different aspects, which are mentioned below.These are the major opportunities, which may generate in expanding the business globally.There is a direct relationship between globalization and performance of an MNC. When anorganization expands its business in international market, it is expected that the organizationswill perform in better way in terms of decreased costs, increased sales and revenues andenhanced competitive advantage over the competitors in new market (Beamish, 2013). In thisscenario, Alibaba.com is expanding its business in Australia country, so it also may have someopportunities, which will be beneficial for its business operations. The company is developing itsbusiness in the Australian regions with the vision to build a whole infrastructure that is requiredto make the local businesses able to expand business internationally.As Alibaba.com is operating its business in e-commerce industry, so it is very easy to expand itsbusiness in other countries through its international website. Thus, the internet can be seen as anopportunity of globalization for its business. Via internet, Alibaba is able to go across the bordersand reach its potential customers with its products and services. In addition, the decision makersmay discover the opportunities to use the human resources in international market as they worktowards the goals of profitability, which are set by the organizational top management (Bryan,2015).