Globalization and Market Entry Strategy

This assignment analyzes the influence of globalization on Chinese multinational corporations (MNCs) aiming to enter the Australian market. It explores the potential benefits and challenges presented by this globalized landscape, focusing on factors such as e-commerce, technological advancements, and the financial implications of events like BREXIT. The assignment emphasizes the need for managers to adopt a strategic approach that considers both opportunities and threats in order to succeed in the complex and competitive international business environment.

Running head: INTERNATIONAL BUSINESS
Marketing Strategy
Name of the Student:
Name of the University:
Author note:

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Executive Summary
The purpose of the report is to talk about a Multinational Company of an emerging market name
Alibaba company which is an MNC having an e-commerce facility. Now the manager of the
China has decided to make its branches wider in the Australian Market. Therefore, in this regard,
it is important to state that, how the company would determine its importance in the field of an
established market of Australia. What are the important opportunities and threats that the
company is going to face while entering the Australian Market. The opportunities and threats are
elaborated with respect to the drastic changes in the Chinese market and how it is going to affect
the future of the company. Last, it was important for the decision maker to draw the differences
between the host and home countries in terms of the MNC. Therefore, it is important to discuss
and analyze on the basis of the PESTLE of both the countries.

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Table of Contents
Introduction......................................................................................................................................3
Profile of the company.....................................................................................................................3
Strategy Adopted.........................................................................................................................4
Opportunities and Threats for the Decision makers in terms of Globalization...............................4
Dramatic Changes of China.........................................................................................................5
Australian Market Strategy..........................................................................................................6
Opportunities of the Australian economy....................................................................................6
Threats of the Australian Economy.............................................................................................6
Environmental analysis to draw differences between home and host countries.............................7
PESTEL analysis of China..........................................................................................................7
PESTEL OF AUSTRALIA.........................................................................................................9
Conclusion.....................................................................................................................................10
References......................................................................................................................................12

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Introduction
The purpose of the topic is to discuss the main threats and opportunities which is created
by globalization. This evident would be supported by the help of an MNC in an emerging
market. The report deals about Alibaba.com, a China based MNC which has established
successfully through the strategic and innovative marketing plans. The report would further
suggest how this Multinational Company identified the threats and opportunities of the
Australia’s global market in order to spread its branched in the market of Australia. This would
further contrast the differences between the establishing its market both in the host and home
country. PESTEL analysis would be further used to elaborate on the industrial and external
factors of both Australia and China. PESTEL analysis would further discuss the political,
economical, social, technological, environment and legal factors of both Australia and China in
order to draw a life of difference between the macro factors of both home and host countries.
Profile of the company
Alibaba group is an e-commerce which is based in China which initiates the transactions
between the entities. The company offers to the services of the consumer, customer to business
and also business to the services of sales through the usages of international website. Another
important service which is provided by the company incorporates shopping, search based engine
and also the services based on the cloud computing services (Alibaba.com 2017). Alibaba
initiated its operation in the year 1999 and now Alibaba has become the largest retailer business
in the world which is running over 190 countries. The company has also become the dominating
online retailer in this world by achieving the revenue of sales beyond the popular countries such
as Walmart, Amazon or e-bay.

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Strategy Adopted
The strategy developed by the country is to act as an initiator between the buyers and the
suppliers by establishing the trusts in them. The company has also achieved the trust of the
customers through its innovative online based platform. Alibaba at the first believes in the
services to the customers.
Teamwork: Alibaba has excellent services which gives importance to the organization’s culture.
The members of the team work in the collaboration by providing the best services to its
customers (Alibaba.com 2017).
Embracing the changes: Alibaba has developed its services and also operations which are in
alignment with the latest era. It has successfully included the digital based technology in it portal
of web (Alibaba.com 2017).
Passion: The company is passionate to bring its transformation in the world through its payment
and retail services.
Alibaba is completely committed to its business towards their clients and customers which is
consistently working to increase its operations of business which would provide best services to
them (Alibaba.com 2017; Ferrell and Hartline 2012).
Opportunities and Threats for the Decision makers in terms of Globalization
Globalization has become a part of the fabric of the modern business. Managers are
always under pressure to face the challenges as well as the opportunities that is existing on a
daily basis (Hitt, Ireland & Hoskisson 2012). In the world of the hyper competition, managers
can easily focus on the important elements of the globalization, while losing the sights of

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developments based on longer terms. Further as well, the industrial globalization leaves an
impact over the companies and individuals in various ways (Hitt, Ireland & Hoskisson 2012).
The international business always looks forward to create new opportunities and threats to the
managers of this global world. Over here it is important to discuss how the globalization which
incorporates the MNC trying to enter Australia would leave a challenge to the managers in order
to take decisions accordingly. The options recommended was to enter the market of Japan,
however the market of Japan is facing serious challenges for the other companies due to the
ongoing politics (Cavusgil et al. 2014). Therefore, in this regard Australian Market is chosen
which is financially well established with a positive legal structure (Hitt, Ireland & Hoskisson
2012). The Chinese firm could be expected to grow in the Australian Market as it is abided by
the sophisticated legal structure and also the environmental concerns. Therefore, these are the
opportunities that Australia has to pave the way for an MNC of an emerging market (Wheelen
and Hunger 2017)
Dramatic Changes of China
Now the current topic is about the increasing impact of China on the international Business. The
economy of China has recently surpassed the countries like Germany and China in order to
become the second largest country in terms of economy in the world. Along with this growth,
there are certain amazing social and political developments (Najam, Runnalls and Halle 2016).
The substantial growth of economy in China has impacted the growing business in various ways.
The percentage of the population living under the poverty lines has also come down. The main
challenges that a Globalization creates for the leaders are the political, legal and economic
factors when the managers of the MNC wants to enter other countries such as Australia. In this

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respect it is important to identify the challenges that Alibaba group would face while entering the
Australian Market (Peng 2012; Haley and Haley 2013).
Australian Market Strategy
Australia is having a free market democracy which has recorded an impressive growth. It has a
systematic Government and well structured legal system and also having an independent
bureaucracy which has facilitated the development of the entrepreneurship. It is the country
which welcomes most of the industries and also skilled workforce (Baker 2014). Australia
continues to be a dynamic and attractive investment from most of the countries in this market.
However, the country is facing global financial crisis which is lower than the advanced
economies, which can act as threats for the Chinese market as a part of their globalized market
strategy (Baker 2014; Armstrong et al 2014). The other threats could be the business
communication with cross cultural people.
Opportunities of the Australian economy
 There are increased efficiencies and the improved productivity in the business
transactions.
 The economy provides greater access to the marketplaces for conducting any local
business. Alibaba is an e- commerce MNC of China so people would be connected to the
internet at a greater connection speed (Plumb, Kent and Bishop 2013).
 The utilization of the talents would bring innovation to the digital technology.
Threats of the Australian Economy
 As mentioned before, the country is facing global financial challenges which are also
affecting the economy of the country.

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 There are very few portals of E-commerce which amounts to the trust that Alibaba
carries. If Alibaba is looking forward to expand in other country, this comes on the basis
of the trust on the brand.
 As it would be a new emerging market to Australia. It would face tough competition
among the other companies who would try their level best to gain the competitive
advantages in the market.
 The global threats include the other retail shops such as Amazon or e-bay which would
give tough competition to the existing market of China’s company.
Environmental analysis to draw differences between home and host countries
PESTEL analysis of China
Political Factors: It includes the policy structure of the Government. China is considered to be an
emerging economy and it introduced the policy of the revolution and opening opportunities to
the private players residing in the country. The country contains a communist form of
government which further post challenges regarding the facilities of credit for the growth of their
business. Alibaba forecasted to grow faster in the China’s market which is considered to be one
of the largest markets in the world (Shambaugh 2013).
Economic Factors: Economy of China is a fast growing economy and it has made China the
second largest economy. The country’s GDP value is $9.2 trillion in the year 2013 and the
growth rate of GDP is more than 8%. Thus this growing rate of economy inspired the growth of
the company Alibaba group (Shambaugh 2013).
Social factors: With the population having more than 1.3 billion, it is very much concerned about
the population’s growth and it is concerned about the strict policy based on limitation. Another

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important factor which has been considered to the trend of China is the relation of
unemployment with the factors of employment. The current unemployment in China is quite
low. Therefore the workers of Alibaba would be happy and they want to work for the company.
This would also lead to the recruitment of many labors in the company the ones who all are wish
to work in the MNC.
Technological Factors: The strategists of the science of China give greatest opportunities to the
technology of the country in the field of innovation. The scientists are coming up with different
technologies which are being incorporated in the different organization for making the work
smooth. There are number of districts for the development of the high-tech was established for
the purposes of the technological innovation.
Environmental factors: The rapid industrial development in China are the negative impacts on
the environment which includes the rise of pollution level. Water scarcity other than this is also
being taken into consideration as a serious threat to the growth of economy. However, recently,
the government of China is paying attention to the environmental factors and also participating in
the climate change trends. China here also signed the Basel convention about the transportation
of hazardous products. In this respect Alibaba group is also taking steps to make the company
environmentally better.
Legal Factors: In relation to the investment of the foreign companies, the government of China
sets up complete law system. China is also known as one of the most incentive package to Asia.
The incentives and also other facilities for the sectors in terms of the promotion of investment are
bringing advantages to the firm.

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PESTEL OF AUSTRALIA
Political environment: Australia is considered to the important markets of MNC from Asia. It
reflects a growing economy, a stable and political environment of the business and also a
competitive base of cost. These are the factors which provide a sophisticated market and various
Multinational Companies in order to drive technology and innovations. In this respect Alibaba
would be profitable in terms of sustaining (Donegan, Chisholm and Obeklaid 2014).
Economic Factors: With the rise in population, the income of the population also rises. The cost
competitiveness of Australia also led to the growth of many foreign companies and it has also
become one of the successful countries to attract the foreign countries here to make investment
in their country. In the main cities of Australia, the unemployment is also relatively lower. This
also contributes to the fact that Alibaba can recruit more people in their organization in terms of
bringing prosperity to their country.
Social Factors: The country Australia is divided into upper class, middle class and lower class
and it also discusses the consumption pattern. Therefore accordingly the MNC can fix their price
rates of the product. Like China, the growth of population would also enable to the rise of
purchasing power of the customers which would led to the profit of the company. Thus social
factors also here play an import ant role in terms of determining the success of the company.
Technological Factors: Thee technological factors help to create new products and also lead to
the innovation of quality in the products and this in turn would give benefits to the organization
which are providing products. Government of Australia find 40% to the industries. Therefore, in
terms of innovation and technological perspective, Alibaba group can suffer in terms of their
productivity and hence more labors they would prefer to work for the organization. However, the

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market for e-commerce is well established, there the company can earn more profit (Donegan,
Chisholm and Obeklaid 2014).
Environmental Factors: The environmental factors also plays an important role for many
industries. However, as there is a water scarcity problem in Australia, it might affect the working
of the company.
Legal Factors: In terms of Legal Factors, Australia is very strict in terms of the market entry
operation. They have to make sure that they have gone through the credentials of the oversee
buyers and partners. And also need to be wary about the scam operations which are working in
the markets. It is important to seek the legal advice from the legal firms who are specialized in
the international work (Donegan, Chisholm and Obeklaid 2014; Bodirsky and Popp 2015).
The international business managers can come to a decision that, China being an
emerging market can make its grip strong in the established market of Australia as it provides
many opportunities. Unlike China, the government of the host country Australia is stable enough
to give support to the Chinese company. The e-commerce facility and the availability of high
technology would also enable the MNC to flourish. However, the managers are also need to keep
in mind the financial problems in Australia after BREXIT. Therefore, the market entry strategy
would provide both opportunities and threat to the MNC of China (Griffin 2012).
Conclusion
Therefore to conclude, it could be stated that a Manager needs to think about the business from
the perspective of Globalization and accordingly would benefit the managers to take important
decisions regarding the entry in their market and make profit in the world of economy full of
challenges and threats.

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References
Alibaba.com 2017. China Mnc, China Mnc Manufacturers and Suppliers on Alibaba.com.
[online] Alibaba.com. Available at: https://www.alibaba.com/countrysearch/CN/mnc.html
[Accessed 30 Aug. 2017].
Armstrong, G., Adam, S., Denize, S. and Kotler, P., 2014. Principles of marketing. Pearson
Australia.
Baker, M.J., 2014. Marketing strategy and management. Palgrave Macmillan.
Bodirsky, B.L. and Popp, A., 2015. Sustainability: Australia at the
crossroads. Nature, 527(7576), pp.40-41.
Cavusgil, S.T., Knight, G., Riesenberger, J.R., Rammal, H.G. and Rose, E.L., 2014. International
business. Pearson Australia.
Donegan, P., Chisholm, C. and Oberklaid, M., 2014. Mapping Australia's economy: Cities as
engines of prosperity.
Ferrell, O.C. and Hartline, M., 2012. Marketing strategy, text and cases. Nelson Education.
Griffin, R.W. and Pustay, M.W., 2012. International business. Pearson Higher Ed.
Haley, U.C. and Haley, G.T., 2013. Subsidies to Chinese industry: state capitalism, business
strategy, and trade policy. Oxford University Press.
Hitt, M.A., Ireland, R.D. and Hoskisson, R.E., 2012. Strategic management cases:
competitiveness and globalization. Cengage Learning.

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Najam, A., Runnalls, D. and Halle, M., 2016. Environment and Globalization: Five Propositions
(2010). The Globalization and Environment Reader, p.94.
Peng, M.W., 2012. The global strategy of emerging multinationals from China. Global Strategy
Journal, 2(2), pp.97-107.
Plumb, M., Kent, C. and Bishop, J., 2013. Implications for the Australian economy of strong
growth in Asia. Reserve Bank of Australia.
Shambaugh, D.L., 2013. China goes global: The partial power (Vol. 111). Oxford: Oxford
University Press.
Wheelen, T.L. and Hunger, J.D., 2017. Strategic management and business policy. pearson.