Alibaba.com: A Born-Again "born global" firm.
Question 1.
I would consider Alibaba a born again global firm. The reason for making up the consideration is that Alibaba business exhibits characteristics that any born global firm carries. By definition, a born global firm is a business organization that from the beginning seeks to derive significant competitive advantage from the utilization of the resources as well as the sale of the outputs in various countries of the world.
I also consider Alibaba Company as a born global firm because it has a distinct way of conducting business. For instance, the top management of the company views the global world as their primary market from the beginning and has very aggressive minds of entrepreneurs who are ready to pursue the global markets as soon as possible. They also apply different strategies to make a niche internationally for themselves. They offer specialized products that are intended to satisfy the smaller firms to serve as an enticing factor to the larger companies. Alibaba Company does its businesses abroad from its beginning thus earning them the title of being called a born again global firm.
Question 2
Alibaba firm has effectively been helping entrepreneurs to overcome psychic distance. This has been successful because the company has enabled the entrepreneurs to overcome the psychological distance by providing them an online platform where they can post their products (Erisman, 2015, p.18). The company has succeeded in growing over the years and has given the smaller companies the ability to understand the marketplaces available and have the potential to compete with the largest businesses in the global market.
The entrepreneurs in the global market no longer have to worry about the distance as they can get their customers to any part of the world through the online platforms. The platform is accessed by many people who can see the products posted by the entrepreneurs and see the products that are currently sold in the global markets. Alibaba helped the entrepreneurs effectively by creating an online platform that enables them to trade their goods without fear of long distances.
Question 3
Alibaba was able to undergo contrary internationalization process. When the organization was formed, the markets in China were still small. As a result, those who founded the company decided to concentrate on the foreign markets (Yu & Li-Hua, 2009, p.31). It was successful in the abroad markets, and it decided to focus on the local markets when the Chinese internet markets began to grow.
The need to understand that the services offered by Alibaba is almost available in most parts of the globe and as a result the company has made a decision to invest majorly in the markets of the Latin America, Africa and the rest of Asia. The company competes with the already established companies like Amazon. Ideally, it is because of the difficulties in concurrence in Europe and America.
Additionally, the other entry mode strategy that Alibaba Company used was the expansion into different countries that primarily invested in e-commerce and mobiles startup firms. This was evidenced in the North America where the company spent 215 million dollars on the Tango messaging application. The growth made the company emerge as the fourth biggest technology firm globally after Apple, Google and Microsoft companies.
The primary drivers of success witnessed by the enterprise as well as the rapid growth globally were innovation and entrepreneurship. The company tried to meet the needs of its customers with the innovations it had together with the expected trends of the global markets in the future.
All of the internationalization strategies of Alibaba Company were successful. The company was able to look at the various ways effectively as to which can be more useful in improving its services and that must be carrying out of pilot projects before making any strategies of the company. The biggest success was the IPO, which was described as the largest IPO in the whole world. The investments of the company in the northern America became successful evidenced by the rapidly growing e-commerce that was established in the region.
Question 4
Alibaba Company has utilized the five entrepreneurial strategies effectively through the following ways:
Proactively approaching buyers and identifying the right customers for their goods that allow more power to gain in business ventures rather than waiting to be approached. It has also encouraged the principle of knowing the market it is operating in to know the right products to offer to a particular type of market.
The company has made an initiative of adding compelling photos to the online platforms that accompany the products they offer in the global markets. This has enabled the buyers to choose the best alternative of products before placing an order. They have also enhanced their advertising systems by adding good descriptions of the products that are of benefit to the potential buyers.
The company has also provided their customers with a reliable customer service that is a good idea as it helps quick response to the customers’ questions and contributes to retaining customers. They have also provided informative literature and created an excellent product offering in differentiating themselves from the numerous sellers of probably the same product.
Question 5
The strategic implications for action for Alibaba to grow to include the following:
Alibaba Company should try to achieve competitive advantage from investing in businesses on a larger scale. It is significant to understand the concepts of economies of scale that will drive the company to expand its market potentiality and opportunities that will give the company ability to identify its target market. It identifies devise ways of satisfying their customers in the various sectors involved in the enterprise (Yu & Li-Huaet, 2009, p.38). It should also provide the retailers in the market with cost-effective platforms that can be used to market and sell their products.
The company should also try to get and win more customers that are global. It should as well start to invest heavily in the United States based on the IPO it holds. This is because the market is quite mature despite the fact that there is stiff competition between eBay and Amazon. It is, therefore, important for Alibaba Company to build its brands continuously as well as capture the market opportunities through establishing strategic alliances with worldwide partners such as apple and Google.
The company should further try to attract buyers and sellers through a diversified marketplace. It should make use of the three top markets in diversifying and integrating into varied cultures to attract and maintain the foreign buyers. The company will as well benefit from diversification through cloud computing, online payment solutions, mobile applications and logistics.
It should concentrate on the major Chinese market, ensure it achieves an outstanding growth in all the sectors, and seek ways of developing opportunities on across the borders.
References
Erisman, P. (2015). Alibaba's world: How a remarkable Chinese company is changing the face of
global business.
Liu, S, & Avery, M. (2009). Alibaba: The inside story behind Jack Ma and the creation of the
World’s biggest online marketplace. New York: Collins Business.Yu, D. J., & Li-Hua, Dr Richard. (2009). China's Highway of Information and Communication
Technology. Palgrave Macmillan.
