Global Strategy of Emerging Multinationals †MyAssignmenthelp.com

Question: Discuss about the Global Strategy of Emerging Multinationals. Answer: Introduction The purpose of the topic is to discuss the main threats and opportunities which is created by globalization. This evident would be supported by the help of an MNC in an emerging market. The report deals about Alibaba.com, a China based MNC which has established successfully through the strategic and innovative marketing plans. The report would further suggest how this Multinational Company identified the threats and opportunities of the Australias global market in order to spread its branched in the market of Australia. This would further contrast the differences between the establishing its market both in the host and home country. PESTEL analysis would be further used to elaborate on the industrial and external factors of both Australia and China. PESTEL analysis would further discuss the political, economical, social, technological, environment and legal factors of both Australia and China in order to draw a life of difference between the macro factors of both home and host countr ies. Alibaba group is an e-commerce which is based in China which initiates the transactions between the entities. The company offers to the services of the consumer, customer to business and also business to the services of sales through the usages of international website. Another important service which is provided by the company incorporates shopping, search based engine and also the services based on the cloud computing services (Alibaba.com 2017). Alibaba initiated its operation in the year 1999 and now Alibaba has become the largest retailer business in the world which is running over 190 countries. The company has also become the dominating online retailer in this world by achieving the revenue of sales beyond the popular countries such as Walmart, Amazon or e-bay. Strategy Adopted The strategy developed by the country is to act as an initiator between the buyers and the suppliers by establishing the trusts in them. The company has also achieved the trust of the customers through its innovative online based platform. Alibaba at the first believes in the services to the customers. Teamwork: Alibaba has excellent services which gives importance to the organizations culture. The members of the team work in the collaboration by providing the best services to its customers (Alibaba.com 2017). Embracing the changes: Alibaba has developed its services and also operations which are in alignment with the latest era. It has successfully included the digital based technology in it portal of web (Alibaba.com 2017). Passion: The company is passionate to bring its transformation in the world through its payment and retail services. Alibaba is completely committed to its business towards their clients and customers which is consistently working to increase its operations of business which would provide best services to them (Alibaba.com 2017; Ferrell and Hartline 2012). Opportunities and Threats for the Decision makers in terms of Globalization Globalization has become a part of the fabric of the modern business. Managers are always under pressure to face the challenges as well as the opportunities that is existing on a daily basis (Hitt, Ireland Hoskisson 2012). In the world of the hyper competition, managers can easily focus on the important elements of the globalization, while losing the sights of developments based on longer terms. Further as well, the industrial globalization leaves an impact over the companies and individuals in various ways (Hitt, Ireland Hoskisson 2012). The international business always looks forward to create new opportunities and threats to the managers of this global world. Over here it is important to discuss how the globalization which incorporates the MNC trying to enter Australia would leave a challenge to the managers in order to take decisions accordingly. The options recommended was to enter the market of Japan, however the market of Japan is facing serious challenges for the other comp anies due to the ongoing politics (Cavusgil et al. 2014). Therefore, in this regard Australian Market is chosen which is financially well established with a positive legal structure (Hitt, Ireland Hoskisson 2012). The Chinese firm could be expected to grow in the Australian Market as it is abided by the sophisticated legal structure and also the environmental concerns. Therefore, these are the opportunities that Australia has to pave the way for an MNC of an emerging market (Wheelen and Hunger 2017) Now the current topic is about the increasing impact of China on the international Business. The economy of China has recently surpassed the countries like Germany and China in order to become the second largest country in terms of economy in the world. Along with this growth, there are certain amazing social and political developments (Najam, Runnalls and Halle 2016). The substantial growth of economy in China has impacted the growing business in various ways. The percentage of the population living under the poverty lines has also come down. The main challenges that a Globalization creates for the leaders are the political, legal and economic factors when the managers of the MNC wants to enter other countries such as Australia. In this respect it is important to identify the challenges that Alibaba group would face while entering the Australian Market (Peng 2012; Haley and Haley 2013). Australian Market Strategy Australia is having a free market democracy which has recorded an impressive growth. It has a systematic Government and well structured legal system and also having an independent bureaucracy which has facilitated the development of the entrepreneurship. It is the country which welcomes most of the industries and also skilled workforce (Baker 2014). Australia continues to be a dynamic and attractive investment from most of the countries in this market. However, the country is facing global financial crisis which is lower than the advanced economies, which can act as threats for the Chinese market as a part of their globalized market strategy (Baker 2014; Armstrong et al 2014). The other threats could be the business communication with cross cultural people. There are increased efficiencies and the improved productivity in the business transactions. The economy provides greater access to the marketplaces for conducting any local business. Alibaba is an e- commerce MNC of China so people would be connected to the internet at a greater connection speed (Plumb, Kent and Bishop 2013). The utilization of the talents would bring innovation to the digital technology. Threats of the Australian Economy As mentioned before, the country is facing global financial challenges which are also affecting the economy of the country. There are very few portals of E-commerce which amounts to the trust that Alibaba carries. If Alibaba is looking forward to expand in other country, this comes on the basis of the trust on the brand. As it would be a new emerging market to Australia. It would face tough competition among the other companies who would try their level best to gain the competitive advantages in the market. The global threats include the other retail shops such as Amazon or e-bay which would give tough competition to the existing market of Chinas company. Environmental analysis to draw differences between home and host countries Political Factors: It includes the policy structure of the Government. China is considered to be an emerging economy and it introduced the policy of the revolution and opening opportunities to the private players residing in the country. The country contains a communist form of government which further post challenges regarding the facilities of credit for the growth of their business. Alibaba forecasted to grow faster in the Chinas market which is considered to be one of the largest markets in the world (Shambaugh 2013). Economic Factors: Economy of China is a fast growing economy and it has made China the second largest economy. The countrys GDP value is $9.2 trillion in the year 2013 and the growth rate of GDP is more than 8%. Thus this growing rate of economy inspired the growth of the company Alibaba group (Shambaugh 2013). Social factors: With the population having more than 1.3 billion, it is very much concerned about the populations growth and it is concerned about the strict policy based on limitation. Another important factor which has been considered to the trend of China is the relation of unemployment with the factors of employment. The current unemployment in China is quite low. Therefore the workers of Alibaba would be happy and they want to work for the company. This would also lead to the recruitment of many labors in the company the ones who all are wish to work in the MNC. Technological Factors: The strategists of the science of China give greatest opportunities to the technology of the country in the field of innovation. The scientists are coming up with different technologies which are being incorporated in the different organization for making the work smooth. There are number of districts for the development of the high-tech was established for the purposes of the technological innovation. Environmental factors: The rapid industrial development in China are the negative impacts on the environment which includes the rise of pollution level. Water scarcity other than this is also being taken into consideration as a serious threat to the growth of economy. However, recently, the government of China is paying attention to the environmental factors and also participating in the climate change trends. China here also signed the Basel convention about the transportation of hazardous products. In this respect Alibaba group is also taking steps to make the company environmentally better. Legal Factors: In relation to the investment of the foreign companies, the government of China sets up complete law system. China is also known as one of the most incentive package to Asia. The incentives and also other facilities for the sectors in terms of the promotion of investment are bringing advantages to the firm. Political environment: Australia is considered to the important markets of MNC from Asia. It reflects a growing economy, a stable and political environment of the business and also a competitive base of cost. These are the factors which provide a sophisticated market and various Multinational Companies in order to drive technology and innovations. In this respect Alibaba would be profitable in terms of sustaining (Donegan, Chisholm and Obeklaid 2014). Economic Factors: With the rise in population, the income of the population also rises. The cost competitiveness of Australia also led to the growth of many foreign companies and it has also become one of the successful countries to attract the foreign countries here to make investment in their country. In the main cities of Australia, the unemployment is also relatively lower. This also contributes to the fact that Alibaba can recruit more people in their organization in terms of bringing prosperity to their country. Social Factors: The country Australia is divided into upper class, middle class and lower class and it also discusses the consumption pattern. Therefore accordingly the MNC can fix their price rates of the product. Like China, the growth of population would also enable to the rise of purchasing power of the customers which would led to the profit of the company. Thus social factors also here play an import ant role in terms of determining the success of the company. Technological Factors: Thee technological factors help to create new products and also lead to the innovation of quality in the products and this in turn would give benefits to the organization which are providing products. Government of Australia find 40% to the industries. Therefore, in terms of innovation and technological perspective, Alibaba group can suffer in terms of their productivity and hence more labors they would prefer to work for the organization. However, the market for e-commerce is well established, there the company can earn more profit (Donegan, Chisholm and Obeklaid 2014). Environmental Factors: The environmental factors also plays an important role for many industries. However, as there is a water scarcity problem in Australia, it might affect the working of the company. Legal Factors: In terms of Legal Factors, Australia is very strict in terms of the market entry operation. They have to make sure that they have gone through the credentials of the oversee buyers and partners. And also need to be wary about the scam operations which are working in the markets. It is important to seek the legal advice from the legal firms who are specialized in the international work (Donegan, Chisholm and Obeklaid 2014; Bodirsky and Popp 2015). The international business managers can come to a decision that, China being an emerging market can make its grip strong in the established market of Australia as it provides many opportunities. Unlike China, the government of the host country Australia is stable enough to give support to the Chinese company. The e-commerce facility and the availability of high technology would also enable the MNC to flourish. However, the managers are also need to keep in mind the financial problems in Australia after BREXIT. Therefore, the market entry strategy would provide both opportunities and threat to the MNC of China (Griffin 2012). Conclusion Therefore to conclude, it could be stated that a Manager needs to think about the business from the perspective of Globalization and accordingly would benefit the managers to take important decisions regarding the entry in their market and make profit in the world of economy full of challenges and threats. References Alibaba.com 2017.China Mnc, China Mnc Manufacturers and Suppliers on Alibaba.com. [online] Alibaba.com. Available at: https://www.alibaba.com/countrysearch/CN/mnc.html [Accessed 30 Aug. 2017]. Armstrong, G., Adam, S., Denize, S. and Kotler, P., 2014.Principles of marketing. Pearson Australia. Baker, M.J., 2014.Marketing strategy and management. Palgrave Macmillan. Bodirsky, B.L. and Popp, A., 2015. Sustainability: Australia at the crossroads.Nature,527(7576), pp.40-41. Cavusgil, S.T., Knight, G., Riesenberger, J.R., Rammal, H.G. and Rose, E.L., 2014.International business. Pearson Australia. Donegan, P., Chisholm, C. and Oberklaid, M., 2014.Mapping Australia's economy: Cities as engines of prosperity. Ferrell, O.C. and Hartline, M., 2012.Marketing strategy, text and cases. Nelson Education. Griffin, R.W. and Pustay, M.W., 2012.International business. Pearson Higher Ed. Haley, U.C. and Haley, G.T., 2013.Subsidies to Chinese industry: state capitalism, business strategy, and trade policy. Oxford University Press. Hitt, M.A., Ireland, R.D. and Hoskisson, R.E., 2012. Strategic management cases: competitiveness and globalization. Cengage Learning. Najam, A., Runnalls, D. and Halle, M., 2016. Environment and Globalization: Five Propositions (2010).The Globalization and Environment Reader, p.94. Peng, M.W., 2012. The global strategy of emerging multinationals from China.Global Strategy Journal,2(2), pp.97-107. Plumb, M., Kent, C. and Bishop, J., 2013.Implications for the Australian economy of strong growth in Asia. Reserve Bank of Australia. Shambaugh, D.L., 2013.China goes global: The partial power(Vol. 111). Oxford: Oxford University Press. Wheelen, T.L. and Hunger, J.D., 2017. Strategic management and business policy. pearson.