Going global means new frontiers Essay

IntroductionOn the 19th Sep. 2014, the worlds largest initial public offering (IPO) was advantagefully completed in the New York stock certificate Exchange (NYSE), U.S., and the total IPO amount has reached up to $25 meg (Chen. Mac. Solomon. 2014). Alibaba, the miracle creator, employ only 15-years exploitation to take the seat in the mole Street and build an e-commercial empire. The NYSEs IPO is the channelize to tell global investors and competitors that Alibaba is ready to join the global grocery store competition. For Alibaba, passing global means new frontier, however, the new frontier could be both a barren cliff or cornucopian grassland. In this essay, we leave behind primarily discuss that why Alibaba want to expand global food grocery stores, and how Alibaba is going to prove the global strategies to against global competitors in afield merchandise. by avoiding direct competition, targeting alike(p) commercialize as china and increasing riotous size in th e global foodstuff environment to step into a grassland market for fixed development.Alibaba the worlds largest online and mobile commerce company, was established in 1999 by the group of 18 people led by rascal Ma in Hangzhou, china. There be three main sites in Alibaba mainland China, including T-mall, Taobao and Alibaba.com on with numbers of other companies to support Alibabas ecosystem development. Moreover, Alibaba also has Alibaba.com and AliExpress.com to provide global online shopping service (Pressman 2014). Until 2013, Alibaba has more(prenominal) than 2 million merchants across more than 190 countries and regions. In 2013, there was amount of $248 billion transactions went finished Alibabas online sites which is more than the total of eBay and amazon. Furthermore, after the NYSEs IPO, Alibabas market cap has reached up to 215 billion dollar, which only followed behind Microsoft, Google and orchard apple tree among the global tech firms (Lajoie & Shearman. 201 4).Global Market Expansion (convention path from house servant to overseas) Why Alibaba want to expand global market?Alibaba is a regular(prenominal) Multi-national corporation, since Alibaba set up the headquarter in the China and operate e-commerce disdaines in othercountries. in As a typical multi-national corporation, going global to feat new distant market, to merge into larger and more efficient units and to function better social slap-up is an irresistible process for Alibaba. As the dominator in the Chinas online shopping market, Alibaba has already controlled 80% of the market share, hence Alibaba needs new distant markets for persistent development. Moreover, For Alibaba, both the internal capabilities and away environment allows Alibaba to halt the global market expansion decision.For the internal capabilities, Alibaba is a mature mesh corporation, which has controlled 80% of the Chinas online shopping market. Chinas market profits could constantly provide enormo us capital support for Alibabas semipermanent market expansion. Moreover, after the NYSEs IPO, Alibaba has won the trust from global investors and acquired sufficient capital for early market expansion. However, the challenges unendingly exist during the process of the market expansion, especially from the local e-commercial corporations. contempt of the competition, high cost for setting up facilities, cultural shock, and different politics policies would also be main concerns before the decision was made. Thus, I hurt listed three main strategies below to demonstrate Alibabas global market expansion.Avoiding direct competitionInstead of face to face competition with those locally dominant e-commercial corporations, Alibaba decided to operate their melody around the market edges and perish partial of e-commercial businesses to cross-country trade. In 2004, The Americas largest e-commercial corporationeBay entered the Chinese market by merger with a Chinese e-commercial corpo rationEachNet. In narrate to against eBay, Alibaba decided to launch Taobao, one of the main sites under Alibaba for C2C (customer to customer) business model, compete with eBay. Because of Taobaos preponderant business model and house servant advantages, eBay ultimately failed in Chinas e-commercial market expansion (Wang, 2010).Right now, Alibaba set about the same challenge in the Americas market, scarcely Alibaba allow not make the same mistake as eBay did. In order to avoid direct competition with eBay and amazon, Alibaba has launched AliExpress for cross-country trade wholesale by offering quality products at factory prices. As the advantages, Chineseproducts ache unbeatable prices to attract American customers also Chinese customers pee-pee unwavering demands for American high quality products (like Cherry Farmers and Fisherman). Although its too introductory to claim the final result of Alibaba, to avoid direct competition is always a good way to enter a new market without too more pressure from local competitors.Finding similar market as ChinaAlibabas global strategies are more apparent targeting the large and potential e-commercial market as Chinas market. For instance, brazil-nut tree, as one of the largest developing economy in the world, the economy status and e-commercial twist in Brazil is really similar as in China. ALthough, eBay and Amazon has already settled down in the Brazils market, its always not too late for Alibaba overtakes the dominance. In 2013, Alibaba set up a Portuguese e-commerce site to allow Brazil buyers directly acquire goods from Chinese wholesalers. Just in a year, Alibaba has became the third largest e-commercial website and took 20% of market share after Ebay and Amazon.In this July 12 millions of Brazilian customers visited the Alibaba.com, which is ten time than last year (Sciau through with(p), 2014). Moreover, in Brazils market, Alibaba wisely used the local sub-contractor to reduce investment and imp rove service quality, which subcontracted the online payment services to Boleto and delivery services to Brazils state-owned postal service (Pressman, 2014). To make it eventide better, Brazilian President Dilma Rousseff and Chinese President Xi Jingping have signed the agreement to open the Green Channel to support Alibabas business between two countries (Chao, 2014). All in all, the success in the Brazils market indicated that to find the similar market is a feasible schema for future development.Increasing the firm sizeAs a typical multi-national corporation, Alibaba effectively applied the law of increasing firm size, which have rapidly growth in the representative size of the firm, culminating in the MNC, and the parallel growth in organizational complexity (Hymer, 1970). E-commercial is the fundamental business for Alibabas long-term development, but not the only business Alibaba does or willing do. As the range of investments show below, Alibabamade plenty of investments i n smart phone, video websites, telecommunication and so on.Some of them are backup businesses to support Alibabas e-commercial, like Juhuasuan, Alipay and Alibaba pictures and some of them are potential businesses for long-term development, like Kabam, Peel, and Tango. Like Jack Ma has said in the Stanford seam Schools presentation, Alibaba would always follow the markets path, where is the market, where is the Alibaba. Alibaba believed those investments are the future market and opportunities. On the global market expansion, Alibabas strategy is to pursue dynamic, diversified, sustaining development.Impacts on global market and host regionWith the development of Alibaba, the global e-commerce businesses will absolutely more competitive than before. There will be more and more cheaper and quality products flow into global market from China. Other e-commercial corporations, like eBay and Amazon, have to find the way out to against Alibabas expansion. On the other hand, Alibabas glo bal market expansion will provide more opportunities and channels for Chinas manufactories and factories to enter into a larger market. As Alibabas delegacy said, to make it easy to do business anywhere. Alibaba help Chinas merchants to do business much easier and more efficient.ConclusionIt is indeed that Alibaba made a great success in 15-year development, but some concerns still exist from investors. Some investors even thought its possible that Alibaba is too big to be expropriated by Chinese political science (Crovitz, 2014). However, Its a totally misunderstanding, Chinese government always encourage and support Chinas corporations to exploit overseas market and welcome foreign investment. Furthermore, investors also consider the instability to an Internet company. Unlike other industries, such as auto or formulate industry, Internet Company is highly volatile. Internet Company could create billions of fortunes overnight, but also could lose everything instantly. In this cas e, its a significant mission for Alibaba to keep investors trust and faith. Up to now, Alibabas steady-state growth and expansion is the vanquish response to investors trust and support.For 15-year development, Alibaba completely followed the conventional path from serve domestic market to operate businesses overseas. Eventually, Alibaba has successfully built an e-commercial businesses bridge between China and overseas market. Alibaba will continue to grow, and it will continue to change China and change the world. As William Kirby, and expert on Chinese business in Harvards business school, demonstrated that Alibaba is a private company that has done more for Chinas national economy than most state-owned enterprises (Economist, 2013).ReferencesChen, Liyan Mac, Ryan Solomon Brian. Alibaba Claims human action For Largest Global IPO Ever With Extra Share Sales. Forbes. Web. Available from http//www.forbes.com/sites/ryanmac/2014/09/22/alibaba-claims-title-for-largest-global-ipo-ever -with-extra-share-sales/ Accessed on 14/11/2014Crovit, Gordon L. 2014. 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