Alibaba [PDF]

Zitiervorschau

ALIBABA – The Yangtze River Crocodile POLITICAL FACTORS OPPORTUNITIES -

ECONOMIC FACTORS

Alibaba’s relationship with the Chinese government : close liaison because many investors are stateowned enterprises. Political connections : links with “princelings” (= children of important political leaders). They are big investors in the company. The government promotes ecommerce. Foreign competitors are kept out of the Chinese market

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OPPORTUNITIES -

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Entering in smartphone e-commerce

THREATS

The percentage of Chinese using internet went from 34.3% to 51.3% in 5 years - Ageing population in China : Chinese parents till reluctant to have more children despite of the relaxation of the famous one-child per family rule in 2013, 2030 a quarter of the Chinese population will be over 65. - Fall of the Chinese workforce (by about 3 million workers a year). LEGAL FACTORS

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Alibaba’s smartphone screen-sizes are less attractive to advertisers

THREATS

Several investments from famous banks (western investors). - Redemption of a part of the group from big companies (+ some other companies hold share parts of the group) - The competition with JD makes the 2 companies stronger - Promising signs in favour of the globalisation strategy - Good international position : good position in many countries. - The Chinese ecommerce market went from 4.6% to 16.2% in 5 years making it the largest in the world - E-commerce is viewed as a key area for future economic growth - President Xi Jinping’s sweeping - 10 % fall in Alibaba’s share price. political and economic reform - Changing economic conditions in China campaign threatens Alibaba’s (decrease of the growth rate) + slower position domestically. economic growth. - Some princelings linked with - Slowing in the rate of growth of the Alibaba accused of corruption. Chinese e-commerce market. - Political connections are required to - Greater competition for Alibaba have a prosperous company (American rival E-bay) - local challenge from JD.com : twice as much domestic growth than Alibaba SOCIAL FACTORS TECHNOLOGICAL FACTORS

OPPORTUNITIES -

Beijing foreign ownership rules : limited recourse against abuses by Chinese companies’ managers for foreign shareholders

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ENVIRONMENTAL FACTORS

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THREATS

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VIE (Variable Interest Entity) structure -> cases of VIE controversy A combination of cultural, linguistic and government policy factors is favourable to Alibaba because it takes away Western internet companies from the Chinese market. Publication of an investigation by China’s State Administration for Industry and Commerce into Counterfeit goods and fake listing

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President Xi restrained the expansion of high polluting industries.