Business Report on Alibaba
Name: Xiya Chen
Subject: Business & Management
This report is based on the business environment analysis to identify key factor for Alibaba. From ratio analysis, it is found that financial performance of Alibaba is decreased in last two years due to decline in profitability and management efficiency. It is also identified from PESTEL analysis that political, social and legal environment of China is supportive for Alibaba, but there are some emerging challenges in economic environment. From SWOT, it is also found that are various opportunities and threats for Alibaba in the existing business environment. In the end, it is observed that global expansion can be effective …show more content…
It is because Chinese government is continuously giving special focus on development of e-commerce sector by reducing taxes and increasing FDI limit.
Economic Factors: There are several economic factors such as interest rates, labour cost, monetary and fiscal policies etc. that are supportive for online retailers in China. But, recent adverse change in Chinese economy in terms of decline in growth rate and flow of FDI can affect business growth rate of Alibaba in future (Porter, 2008).
Social Factors: In recent year, perception of Chinese people is changing towards online shopping due to improvement in their living standards, income level etc. But, increasing ageing population due to country’s family planning policy is an adverse factor for Alibaba. It is because population of youngsters is declined in this country that has potential to affect company’s business (Roll, 2015).
Technological Factors: China is third largest country in terms of number of internet and Smartphone users, which is favourable for the growth of online business in the country.
Environment Factors: In China, recently regulations related to air population, labour cost and customer internet are changing that can create adverse impact on the cost of Alibaba (Brown, 2009).
Legal Factors: The current business environment of China is more safe and regulated for e-commerce industry than earlier due to implementation of strict legal provisions for online payment in recent years (Roll, 2015).