Alibaba is one of the largest retailers in the world, with operations in many countries, including the most populous China and India. The organization seeks business development in R&D, opening research centers in Hong Kong, Singapore, Silicon Valley, and many other points of concentration of qualified specialists. Even the pandemic crisis has served as a catalyst for Alibaba’s revenue growth due to the forced transition to online consumer platforms. However, it should be noted that at the moment, the organization reaches its maximum in these regions when implementing this business model exclusively. Despite being the world’s largest retailer, Alibaba still has growth potential.
First, it is related to the diversification of the core business model. Alibaba is exclusively focused on online sales; all their developments in the field of technology, such as artificial intelligence, are entirely focused on this area (Li, 2019). The vertical expansion promises new potential markets, and the company’s financial capabilities can significantly mitigate the negative effect in case of failure. At the same time, the presence of severe technological support in many parts of the world gives the incentive to create unique IT services. One of these may be cloud computing, when users, for a fee, can get remote access to specific resources that are inaccessible or impossible on their hardware.
Second, a move similar to the first is to create strategic partnerships or acquisitions to enter the rest of the world’s markets where Alibaba does not yet have a presence. Creating an infrastructure for remote interaction always involves initial financial costs, which are more than paid off in the future if there is an appropriate turnover. Such a horizontal expansion will contribute to the company’s internationalization in the current globalization trends. As indirect consequences, there will be an increase in diversity, inclusiveness in the workplace, and compliance with social responsibility requirements. Finally, the ability to compete in markets where Alibaba is not the most prominent retailer will also evolve with geographic extrapolation—due to the fact that the company is highly dependent on the Chinese economy, entering the international arena is more important in the first place to solve this problem.
Reference
Li, F. (2019). Cloud-native database systems at Alibaba: Opportunities and challenges. Proceedings of the VLDB Endowment, 12(12), 2263-2272. Web.