Description of Task
In 2500 words, students are required to critically discuss the following topic:
Using an example of an MNC from an emerging market, present an analysis of the opportunities and threats that globalisation creates for decision-makers. What are the main lessons international business managers can learn about the interplay between home and host country differences in achieving success?
At a minimum, this essay will reference 10-15 reliable academic sources (including journal articles and textbooks) identified by the student, in addition to the textbook. Please use the Harvard Referencing style.

Grading Criteria and Feedback     Criteria Weighting

1. Hurdle requirement Pass/Not Pass:

No Marks are awarded in this criterion.     a. The item has been presented in the medium of written English. Sentences are structured and conform to academic writing guidelines. The paper has an identifiable structure including an introduction, a main body, and conclusion. The paper follows the Harvard Referencing Style. The examiner can proceed with further assessment.
b. The item has not been presented in the medium of written English and the examiner cannot proceed with further assessment. Sentences are not structured and do not conform to academic writing guidelines. The paper does not have an identifiable structure including an introduction, a main body, and conclusion. The paper does not follow the Harvard Referencing Style.

2. The response examines MNC from an emerging market, with reference to both the core text and the academic literature.
a. Comprehensive (8-10 marks)
b. Detailed (7.5-8 marks)
c. Effective (7-7.5 marks)
d. Adequate (5-6.5 marks)
e. Not Adequate (0-4.5 marks)

3. The response presents an analysis of the opportunities and threats that globalisation creates for decision-makers with reference to both the core text and the academic literature. This section has a total potential value of 5 marks.
a. Comprehensive (8-10 marks)
b. Detailed (7.5-8 marks)
c. Effective (7-7.5 marks)
d. Adequate (5-6.5 marks)
e. Not Adequate (0-4.5 marks)

4. The response provides the main lessons international business managers can learn about the interplay between home and host country differences in achieving success. This section has a total potential value of 5 marks.
a. Comprehensive (8-10 marks)
b. Detailed (7.5-8 marks)
c. Effective (7-7.5 marks)
d. Adequate (5-6.5 marks)
e. Not Adequate (0-4.5 marks)

Introduction

The report would discuss the opportunities and threats which are created by globalization. The illustration would be supported with the help of an MNC from an emerging market. The report has taken Alibaba.com which is a China based country and has successfully established itself in the international market through its innovation and strategic marketing plans. The report would highlight how Alibaba.com identified the opportunities and threats of global market of Australia to spread its wings in Australian market. Further, the report would contrast the differences between establishing the market in the home country and host country. PESTEL analysis and Porter’s Five Forces tools would be used in order to analyze the external and industrial factors of China and Australia. PESTEL analysis would help to assess the political, economical, social, technological, environmental and legal factors of China and Australia in order to understand the differences between the macro factors of home and host countries respectively.

Company Profile

Alibaba Group Holding Limited is a China based e-commerce company which facilitates the transaction of services between two entities. The e-commerce company offers consumer to consumer services, business to consumer and business to business sales services through its international website. Another services provided by the company include shopping search engine, electronic payment services and data centric cloud computing services. Alibaba started its operations in the year 1999 by initiating the website alibaba.com which collected the revenue of $ 170 billion in the year 2012. Alibaba has become the largest retailer business in the world with its operations running in more than 190 countries of the world. The e-commerce company has become the most dominating online retailer in the world by achieving sales revenue beyond the world’s most popular companies including Walmart, Amazon and eBay.

The strategy deployed by the company is to act as a facilitator between the suppliers and buyers by establishing trust between them. Alibaba has acquired trust of the consumers through its innovative and reliable online platform.  The company works on the following core values:

Customer First: Alibaba has developed services which are customer centric and fulfill all their needs. Alibaba has developed an innovative online platform through which customers can purchase goods from any part of the world. The web portal also facilitates online payments through its electronics payment system. Thus, buyer can purchase goods and materials by taking the services of Alibaba.com.

Teamwork: Alibaba has well trained staff who has imbibed the culture of the organization. The team members work in collaboration in order to provide the best services to the clients.

Embrace Change: Alibaba has developed its services and operations which are in alignment with the latest trend. Alibaba has very effectively incorporated the digital technology in its web portal.

Passion: Alibaba is passionate to bring digital transformation in the world through its online retail and payment services.

Integrity: Since Alibaba carries huge online transactions worldwide, it has to maintain its integrity. The company has incorporated an effective verification process for its client which takes the company details of the client in order to build mutual trust between the company and client.

Commitment: Alibaba is fully committed to serve its business customers and clients and is consistently working to enhance its business operations in order to offer better services to them.

Industry Analysis

Porter’s Five Forces

Barriers to Entry

The industry has high returns due to which numerous firms have made efforts to imitate the business model of Alibaba.com. The business to business market segment has increased in the past few years which has encouraged the new players to enter the market. To enter the market of e-commerce, a company first needs to identify the target market for the specific industry. There have been firms such as finechemical.com, textilehome.com for chemical and textile industries respectively. These e-commerce companies target only a small market share of Alibaba.com and do not target a broad market segment.

Buyer Bargaining Power

The customer’s strength to pressurize the firm through their authority and power is the buyer’s bargaining power (Roy, 2011). Alibaba.com has small and medium sized enterprises as their customers who do not have their own websites. Alibaba sets its own standards which govern the small and medium firms and thus, these firms do not enjoy the liberty to set their own terms and conditions. Therefore, these firms cannot put pressure on Alibaba.com. On the other hand, the firms with their own websites are in the position to exert pressure on Alibaba.com for prices and other terms and conditions and thus, they negotiate with Alibaba to have some factors in their favor.

Supplier Bargaining Power

The suppliers for a firm could be labor, supplier of raw materials and components and services which could exert pressure over the firm (Hill and Jones, 2009). The suppliers could increase the price of raw material for the unique sources or simply say no to work with the firm. Alibaba does not have any suppliers because it is an e-commerce company which completely relies on marketing and advertising for its business. The company advertises itself through magazines, websites and newspapers which can only demand the market prices from the company. Thus, the bargaining power of supplier for Alibaba is limited.

Availability of Substitutes

When customers find the substitutable products with lower prices, they tend to switch towards them (Hill and Jones, 2009). The product substitute of Alibaba is the websites of companies through which they can easily attract their own customers and especially those customers who want to directly trade with the manufacturing company without any intermediate.

Competition

The rival firms are the determinant of the industrial factors for any firm (Hill and Jones, 2009). The rival firms compete with the firm through extensive marketing campaigns in order to attract the customers. Alibaba faces competition from free search engines such as Baidu.com and Google.com. The customers prefer to use these websites instead of Alibaba due to which Alibaba could incur profit loss.

Environmental Analysis

PESTEL Analysis: China

PESTEL analysis would help us to understand the challenges faced by Alibaba in the Chinese market by assessing the political, economical, social, technological, environmental and legal factors.

Political Factors

Political factors include the government policy structure of the country. China is an emerging market economy and introduced the policy of revolution and opening to give an opportunity to the private players in the country. The country has a communist form of government due to which the private players were facing challenges regarding the credit facilities for the growth of their businesses. The private players of the country have contributed a significant portion of revenue towards the economic growth of the country in the past few years due to which the government directed its attention towards the private players (Orszag, 2014). The government has claimed to offer its full support for the establishment of the private players such as Alibaba.com (Yue, 2016).). Alibaba has been forecasted to grow even faster in the market of China which has been estimated to be one of the largest markets of the world.

Economic Factors

The economy of China has been growing over the past thirty years with consistency and has made China the second largest economy of the world. The GDP value of the country was $ 9.2 trillion in the year 2013 (Focus Economics, 2017). The growth rate of GDP is more than 9% with very low inflation rate (Focus Economics, 2017). Thus, the growing economy of China has facilitated the growth of Alibaba.com in China. Alibaba.com emerged as one of the fastest growing companies of China and received full assistance from the company to enter international market (Berkeley, 2013).