Alibaba Case Analysis

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The case analysis will determine whether Alibaba is a born global company. This analysis will effectively determine how the company utilizes the five entrepreneurial strategies and how to overcome psychic distance. A further examination of the company’s successful internationalization entry mode and the strategic implications for the company are analyzed. Born global The born global concept focuses on an internationalization mindset from the beginning of forming the business. The business immediately focuses on international ventures such as Alibaba has done. I would consider Alibaba a born global firm based on the way they conduct business. The company connects Chinese exporters with companies around the world (Wright, 2014). Alibaba is …show more content…

The company brings U.S. SMEs to the Chinese forefront, in which the company has achieved success by targeting their audience (Baack, Harris & Baack, 2013). Alibaba also owns Alipay which has a direct entry mode that challenges the Chinese banks. Alipay is changing the financial sector within China bringing a better-yielding money-market (Berman, 2014). These strategic modes of entry have become a success for the company. Five strategies To begin, the five entrepreneurial strategies are: (1) growth, (2) innovation, (3) network, (4) financing/governance, and (5) harvest/exit (Peng, 2006). Alibaba has efficiently and effectively utilized these five strategies: • Growth: the company is successful with the knowledge of understanding their buyers and sellers better than the competition. Every company wants to penetrate the Chinese market, but none of them have accomplished the task except for Alibaba, as Jack Ma understands his clients. Alibaba also created Taobao (C2C) and Tmall (B2C) with facilitated payments through Alipay, while leveraging their existing strategy incorporate their B2C, logistic, finance, and cloud services (Sun, …show more content…

The company will offer awareness for future consumers, while offering an optimal user experience by bringing quality products to market. • Finance/governance: Alibaba had the largest IPO, raising USD $21.8 billion for the company. The company’s governance concentrates the voting power in the hands of management, leaving the checks and balance system weak (Wilson, 2015). • Harvest/exit: One man’s IPO is another man’s exit strategy. Alibaba’s exit strategy was to take the company public to raise capital, however, according to the governance top management have all the voting rights as opposed to shareholders. Strategic implications Alibaba being the largest company of e-commerce in the world compared to both Amazon and E*Bay combined. Alibaba’s most strategic implication is their execution of seizing opportunities. All plans of action are real time, the company does not utilize a forecasting scheme. SMEs from the U.S. want to penetrate the Chinese market and can do so by utilizing either B2B or B2C through

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