Fundamentals of International Business: A Report on Alibaba Group

This report analyzes the Alibaba Group, a leading Chinese technology and e-commerce company, focusing on its international business strategy. It provides a company description, detailing its products, services, and financial performance. The report examines Alibaba's international strategy, highlighting its expansion efforts in regions like Australia, India, and Southeast Asia, and its use of a transnational strategy. A SWOT analysis is presented, identifying the company's strengths (market dominance in China, financial position), weaknesses (limited global presence, dependency on core business), opportunities (international expansion, technological innovation), and threats (intense competition, US-China relations). The report also analyzes Alibaba's marketing approach, including its marketing mix (product, price, place, promotion), and its logistic approach. Furthermore, the report covers country, technological, and product factors. The report concludes with recommendations for Alibaba to strengthen its global presence and enhance its market share.

RUNNING HEAD: FUNDAMENTALS OF INTERNATIONAL BUSINESS
FUNDAMENTALS OF INTERNATIONAL BUSINESS
Name of the Student:
Name of the University:
Author’s Note:

1FUNDAMENTALS OF INTERNATIONAL BUSINESS
Table of Contents
Executive summary:.....................................................................................................................................................2
Company description:...................................................................................................................................................3
Company’s International strategy:................................................................................................................................3
SWOT analysis:........................................................................................................................................................4
Strengths:..................................................................................................................................................................4
Weaknesses:..............................................................................................................................................................4
Opportunities:...........................................................................................................................................................5
Threats:.....................................................................................................................................................................5
Company’s marketing approach:..................................................................................................................................5
Marketing mix:.........................................................................................................................................................6
Product:.................................................................................................................................................................6
Price:.....................................................................................................................................................................6
Place:.....................................................................................................................................................................6
Promotion:............................................................................................................................................................6
Company’s logistic approach:......................................................................................................................................7
Country factors:........................................................................................................................................................7
Technological factors:...............................................................................................................................................7
Product factors:.........................................................................................................................................................8
Company’s HRM approach:.........................................................................................................................................8
Analysis:.......................................................................................................................................................................8
Recommendations:........................................................................................................................................................9
Conclusion:...................................................................................................................................................................9
References:..................................................................................................................................................................11

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Executive summary:
In 1991, the Alibaba group was established. At present this organisation is one of the largest business organisation
of this world which offers various types of products, platforms to small and large businesses and internet services.
The E-commerce market in China is dominated by this company. The aim of this company is to create a future
structure of Commerce. The CEO of this company stated that this company will go to the largest business
organisation of this world and deliver its platforms across the world for large and small business organisations.
This China-based enterprise is not effective to create its strong presence at the International level. That is the
reason this organisation is fascinated to develop its business in Australia, India and South-East Asia. This report
aims to analyse this organisation, the international strategy of this company, the marketing approach of this
company, the logistic approach of this company, analyse its risk and benefits. In the end, there are certain
recommendations for this company. Alibaba group is successful to enhance its revenue. Through strategic
partnerships and investments, this organisation is concerned to grow its business in Australia, India and South-East
Asia. By following the transnational strategy this company expands its business at the global level. While
expanding the business operation in Australia, India and South-Asia, this company has to utilise its strengths and
opportunities to manage threats and weaknesses. Analysis of this company's marketing approach finds that the
maximum revenue of this company comes from e-commerce business. To compete with Walmart, Amazon and
other local competitors, this organisation follows a competitive pricing strategy. This company does its business
mainly in China. However, the senior executive of the Alibaba Group is interested to expand its business at the
global level. To attract potential customers, this organisation uses 'above the line' and 'below the line' strategy. This
company is interested to develop an efficient logistics system with the help of technological innovations. The
senior executives of this company believe that engaged, physically and psychologically fit, and efficient workforce
can help this company to achieve its business goals. That is the reason for which several initiatives like training and
development program, are offered by this company for its employees. It can be said that this company should
create its strong presence at the international level to enhance market share and revenue.

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Company description:
Alibaba Group Holding Limited, a Chinese international technology-based business organisation,
established in 1999. Headquarter of this company is situated in Yuhang district, Hangzhou, Zhejiang, China. This
public business organisation is specialised in technology, e-commerce, and retail sector. This company does its
business throughout the world. Customers of Alibaba Group are located in more than 190 countries. This company
offers several products like cloud-computing, retail, e-commerce, mobile commerce, films, television shows,
entertainment and mobile media. This organisation offers a wide spectrum of B2B, B2C and C2C e-commerce
services for the customer (LASHINSKY, 2017). The consolidated revenue of this business organisation in 2019
was 376.8 billion yuan (Statista, 2019). The net income of this company in 2019 was 80.2 billion yuan (Statista,
2019). In 2019, this organisation had102 thousand full-time employees (Blazyte, 2019). This organisation is the
largest e-commerce business organisation in China. Through three websites Alibaba group does its business which
are ‘Taobao’, the large shopping website, ‘Tamall’, site for branded products for the middle-income customer and
‘Alibaba.com’, used for connecting Chinese exporter with other global business organisations. The mission
statement of this company is “to make it easy to do business anywhere” (Alibabagroup.com, 2020). Distinguished
products and exceeding expectations are the key features of the Alibaba group’s mission statement. The vision
statement of this company is “to build the future infrastructure of commerce. We envision that our customers we
meet, work and live at Alibaba and that we will be a company that lasts as least 102 years” (Alibabagroup.com,
2020). The vision statement of this company emphasises on commerce infrastructure and home for consumers.
Core values of this organisation contain “customer first, trust, change-minded, performance, and time-conscious”
(Alibabagroup.com, 2020). Jack Ma, the founder of Alibaba, stepped down from the post of executive chairman in
2019. At present Daniel Zhang, the new chief executive officer, lead this company to achieve the business
objectives of Alibaba Group (BBC News, 2018).
Company’s International strategy:
Alibaba group is one of the foremost E-Commerce and cloud players in China. Though this organisation do
its business throughout the world. The management team of Alibaba Group has developed strategic partnerships
and investments to expand its business in Australia, India and South-East Asia (Ivanauskiene et al., 2015) South-
East Asian market includes Singapore, Indonesia, Malaysia, Philippines, Thailand and Vietnam. While developing
international strategy, the management team of this company prioritises three factors which are digitalisation of the
international economic system, enhancing wealth throughout the world and maximisation of internet penetration
(Huo & Ouyang, 2018). The international strategy of this organisation emphasises its logistics network across the
world and assembling subsidiaries to connect the e-commerce market of this world. The transnational strategy is
followed by this company for its global expansion. This company is expanding at the international market through

4FUNDAMENTALS OF INTERNATIONAL BUSINESS
acquisitions and local partnerships. To do that this company uses platforms like ‘AliExpress’, ‘Lazada’ and
‘Alipay’ (Alibabagroup.com, 2020).
This company is fascinated to increase its business in South East Asia, India and Australia. To get the
benefits of the emerging market, the senior executive of this company is fascinated to develop its business in these
locations. The R&D of Alibaba Group is located in Hangzhou, Beijing, Hong Kong, and Singapore. This company
will develop research labs in the USA, Russia, Israel and Singapore as a part of DEMO academy programme.
DEMO academy stands for discovery, adventure, momentum and outlook (Roy Choudhury, 2017). Competitors of
Alibaba Group are Amazon, JD.com, Walmart, eBay, IBM and Microsoft.
SWOT analysis:
Strengths:
The E-Commerce business of China is dominated by Alibaba. From the aspect of market share, it can be
said that by dominating its competitors, Alibaba group is successful to create a major gap. Strong recognition in the
Chinese market is a strength for this organisation. Because of service quality, innovation and customer
convenience, Alibaba group has successfully transformed as a strong brand.
The scale of operation is a strength for this company. This company do its business operation in China, the
most populated and leading economics in this world. To maintain a successful operation in the most populated
country, this organisation ensures its efficiency for business operation.
The financial position of this company is a strength for this company. Total revenue of this organisation
increased to 237 6.8 billion Yuan in 2019 from 250.2 billion Yuan in 2018 (Statista, 2019). This speed of financial
growth helps this organisation to expand its overseas business at a faster rate.
Research and innovation is strength for this company, which help this company to achieve competitive
advantages (Roy Choudhury, 2017). This company maintains a good relationship with its partner. Cloud business
is facing an impressive growth in recent time. It can be said that Alibaba group can use these strengths to enhance
market share.
Weaknesses:
Limited global presence is a weakness for the Alibaba group. The extend of business that Alibaba Group
does in China is huge when compared to the business done by this company across the world. To become a leading
E-Commerce business organisation of this world Alibaba group has to expand its business globally, which includes
the market of India, Australia and South-East Asian countries.
The business of the Alibaba group exclusively dependent on its core business and the market of China.
Among the total core commerce revenue, 84% revenue in 2019 came from the market of China and less than 10%

5FUNDAMENTALS OF INTERNATIONAL BUSINESS
of revenue came from the international market. So it can be said that excessive dependency on core business and
the market of China can be marked as the weakness of this company.
Alibaba Group does not restrict the number of sellers who signed the contract to partner up with Alibaba
Group to sell products through this online Marketplace. As a result of this several brands withdraw their products
from this company.
Opportunities:
International expansion can be a good opportunity for the Alibaba group. Though this organisation is
successful to maintain the revenue growth and maximize its customer base yet it can be said that expanding the
business at the international level can help this company to enhance revenue and customer base at a faster pace.
Markets of India, Australia and South East Asia can be identified as significant opportunities for the Alibaba
Group.
By investing in R&D, this organisation can boost technological innovation, which will help this company
to maintain smooth and efficient business operation.
By prioritising digital marketing for domestic and global markets, the Alibaba Group can enhance its
market share and revenue (Lin, 2017). Digital marketing can be used to gain competitive advantage.
The management team of the Alibaba group can utilise an in-depth understanding of the e-commerce
business. The in-depth understanding which this company have developed about this industry because of long time
businesses that it has done in China.
Threats:
Intense competition in the e-commerce industry is a threat to the Alibaba group. The global e-commerce
market is controlled by not only Amazon but also several other regional companies. It can be straight for the
international expansion of the Alibaba Group. In China 'Tencent' and 'JD.com' are two local companies who are
enhancing the competition level. While at the global level Amazon and eBay are competitors of the Alibaba group.
As the competition is rising, the profitability of this industry is decreasing. Customers in this industry have
several options for buying their product. It can be said that it is a threat to this company.
Relationships between the US and China can be a threat to the Alibaba group because the tension in this
relationship is growing. Trade barriers can hamper the global expansion procedure of this company.
Legal pressures can be a threat to this organisation while expanding the business at an international level
the officials of this company has to manage the legal pressure.

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Company’s marketing approach:
This company provides its products and services in several countries like China, India, Pakistan, the USA
and several other countries. However, the officials of Alibaba Group is fascinated to develop its business in
Australia, India and South East Asia to escalation market share and revenue.
Marketing mix:
Product:
Alibaba group is one of the main e-commerce business organisation and cloud player in China. Also,
entertainment products and digital media are offered by this company. In 2019, more than 85% of its total revenue
comes from the e-commerce business segment (Statista, 2019). China retail, Taobao and Tmall are included in the
e-commerce business of the Alibaba Group (Alibabagroup.com, 2020). In 2019 China retail market places of this
organisation had 721 million mobile monthly active users. Several web products are launched by this organisation
which are Alibaba. Com, Juhuasuan, Alipay, China Yahoo, Autonavi, Clod computing, and Alibaba pictures for
entertainment (Alibabagroup.com, 2020).
Price:
Competitive pricing strategy is followed by the Alibaba group to target deeper market penetration
(Alibabagroup.com, 2020). To attract the potential customer, the management team of the Alibaba Group offers
discounts and cashback to its customers and curtails its cuts from the transactions. Though this organisation
dominate the market of China yet this company is still struggling to expand at the international level. Due to
intense competition at the international level, this organisation uses a competitive pricing strategy to enhance the
market share. A very lenient pricing policy is followed by this company. Businessmen can do their business
through this company because of the low commission (Alibabagroup.com, 2020).
Place:
Core market of this company is located in China. By using the e-commerce platform of this company,
International brands access to the market of China. In comparison with its competitor, the Alibaba Group is not that
much successful to develop its International footprint this organisation is attentive to develop its business in
Australia, India, and South-East Asia. To maximize its presence at the international level, the Alibaba Group is
either partnering with other companies or investing in those companies. To expand its business in Indonesia, this
company has invested in Tokopedia. The management team of the Alibaba group is interested to enhance its
presence in Russia, South East Asia and India. This organisation uses several types of distribution channels.
Internet as its midway is used by this company. The direct distribution channel is also used by this organisation to
deliver its products and services.

7FUNDAMENTALS OF INTERNATIONAL BUSINESS
Promotion:
Due to its customer convenience, quality product and services, this organisation is successful to maximize
its popularity. As a leading business organisation of China, this company is targeting faster global expansion. For
the promotion, this company uses its e-Commerce portal. Both 'above the line' and 'below the line' strategy is used
by this organisation for the promotion in China. To promote below the line, this organisation emphasizes on
hoardings, sales promotions, and digital advertising. To promote above the line, this organisation uses radio,
television, and print media. Outside of China, this organisation delivers TV ads for the promotion. For the
promotion this company conduct sponsored events.
Company’s logistic approach:
Alibaba Group does not have any inventory or warehouse instead of that this organisation has developed a
software platform which simplifies the exchange of products and services. To develop an efficient logistics system
this organisation aims to develop a twenty-four hours nationwide delivery system. This organisation is interested to
create a faster and cost-effective delivery process. The senior executive of the Alibaba group has stated that this
company will develop efficient logistics which can deliver products within 24 hours in China and within 72 hours
for globally (Giuffrida et al., 2017). Instead of emphasizing on the components of logistics like warehouses and
delivery companies, the Alibaba Group prioritises on the technology which will allow this organisation to create a
joined-up network for logistics. Cainiao, the logistics platform of the Alibaba Group, has the responsibility to
manage courier riders, detail information about delivery, logistics operation, and warehouses. Alipay, an e-wallet
payment procedure, manages the payment procedure (Giuffrida et al., 2017). The officials of the Alibaba Group is
attentive to enlarge its business in Australia, India, and South-East Asia. There are several reasons for which this
organisation is interested to invest in these counties.
Country factors:
The market of Australia, India and South East Asia are emerging. India is the second most peopled nation
in this world. Political stability is present in these locations, which can be beneficial for this company for global
expansion (Hong, Wang & Kafouros, 2015). Though this organisation has to manage competition from local
competitors of these locations. So it can be said that by expanding its business in these locations the management
team of Alibaba Group can achieve the business objectives. Besides that, the economic condition of these counties
is stable which will help this organisation to manage the expansion procedure appropriately. The government of
these locations are very much supportive regarding the FDI.
Technological factors:
The economic stability of these regions is a key reason for which the management team of the Alibaba
Group is interested to expand its business. The spending power of the local consumer is analysed by this company.
The economy of these regions has long term prospects. This organisation is interested to use technological

8FUNDAMENTALS OF INTERNATIONAL BUSINESS
innovation for Logistics. By investing in these regions, this company will enhance its market share by using
technological innovation. As a leading business organisation of the e-commerce industry, this company will utilise
technological innovation to develop and appropriate logistics in these locations. By providing technological
support, this company can enhance its market share. It will help them to gather in-depth knowledge of these
locations, which can be used for further investments in these regions.
Product factors:
The E-Commerce industry is growing throughout the world. By providing a smooth and efficient logistics
system, this organisation can enhance its revenue. A logistics system which is developed by using the latest
technology can be useful for other e-commerce business organisation. The officials of this company are fascinated
to assemble the entire logistics operation. To do that a huge investment in R&D is done by this company.
Company’s HRM approach:
In 2019, this organisation had102 thousand full-time employees (Blazyte, 2019). For long term business
success, the management team of this company emphasizes on recruitment, retain, training, reward system and
developing a diverse workforce. The HRM strategy of this organisation prioritises on six aspects which are
customer first, teamwork, embrace to change, integrity, passion and commitment. The ability of an employee to
manage these factors are evaluated for the employee performance evaluation procedure (Esg.alibabagroup.com,
2018). This company aims to create a culture of humility, openness and equality in the workforce. By providing
competitive compensation and benefits, this company recruit and retain the best talent. To get a clear idea about
employee satisfaction and employee engagement. The HR department of this company conducts surveys on early
basis. This company believes that diversity is the factor which can boost the innovation ability of the employee.
The concept of gender equality is prioritised by this company. To support the employee for developing ability and
skill, this organisation offers special training and development programs. “Alibaba Global Talent Development” is
a program, which is conducted by this company to help the employee to enhance their ability and skill
(Esg.alibabagroup.com, 2018). A comprehensive training system at every level is organised by this company to
help the employee. Through communication and participation, this organisation developed a transparent
workplace. For the employee wellbeing, this company takes several initiatives like incentives, initiatives for
psychological and physical fitness and others. According to the senior executive team of this company, engaged,
physically and psychologically fit workforce can help this company to achieve its business objectives
(Esg.alibabagroup.com, 2018). The HRM strategy of this company can create a positive impact while expanding its
business operation at the international level.

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Analysis:
In this part risks and benefits for the business, expansion procedure will be analyses. This part will help the
officials of this company to understand the impact of business expansion at the international level. By expanding
its business in India, Australia and South-East Asia, this enterprise can boost its market share and revenue. Not
only that the number of mobile active users can be enhanced by this initiative. This organisation is interested to
make one billion active users. By expanding its business at the global level this organisation can achieve this
business goal (Zhang, Chen & Wang, 2016).
The financial growth of this company can play a significant role in this company. To expand the business at
the international level, the financial ability of a business organisation is important. It will help this company to
identify several opportunities and by using its strains this company can utilise those opportunities appropriately.
Appropriate financial resources will allow this company to invest in several countries and create strategic
partnerships with other business organisation (Tsai, 2016). To compete with Amazon, Walmart and eBay, this
organisation can utilise its financial strengths.
This company has the ability to continue its innovation activity. By investing a huge amount of money, this
company can boost its R&D activities. To achieve competitive advantages this organisation can utilise
technological innovations. The benefits of technological innovation can help this company to muscle out its
competitors.
The e-Commerce industry is flourishing in the emerging markets. By investing in those emerging markets
this company can become a global leader of this industry. So it can be said that the management team of the other
way group should utilise this opportunity.
China and USA are the two largest economies of this world however due to trade battle between these two
countries The Business expansion procedure of the Alibaba group can be affected. Government of these two
nations enacted tariffs on hundreds of billions of dollars’ worth of each other's products (BBC News, 2020). So it
can be said that these trade war between these two countries can be a risk for the Alibaba Group.
Recommendations:
In this part, the recommendation for the Alibaba Group will be provided. The management team of this
company can take advantages of these recommendations. The management team the Alibaba Group has to ensure
its logistics partners are aligned with the vision of this company. To ensure adaptability and feasibility of projects,
this company can consider joint development with primary logistics business organisations. To ensure a successful
global expansion, this company should develop a strategic plan, which will help this company to compete not only
with Amazon, Walmart but also with local competitors. This company does its business primarily in the e-

10FUNDAMENTALS OF INTERNATIONAL BUSINESS
commerce industry. By emphasising on the technological advancements this company can muscle out its
competitors.
Conclusion:
Thus this report can be concluded that there are several opportunities which must be utilised by the Alibaba
group. This organisation has brought a revolution in The E-Commerce industry. This organisation developed a
common platform both for buyers and sellers across the world. This organisation successful reduces the gap
between sellers and buyers. However, this organisation has to develop an appropriate strategic plan to expand its
business at the international level. This organisation has to emphasize technological innovation. It will help this
company to compete with other business organisations at the international level. An appropriate strategic plan
guided by technological advancement can help this company to create a strong presence of this company at the
international level.

11FUNDAMENTALS OF INTERNATIONAL BUSINESS
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