PESTLE and SWOT analysis of Alibaba
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In recent years, Alibaba has faced a number of growth challenges amid regulatory tightening on China's domestic technology sector and a slowdown in China, the world's second-biggest economy. Although analysts believe that the e-commerce giant's growth could pick up, the company has and is struggling with growth over the past months. According to the analysis, the company has lots of growth potential boosted by the fast-growing e-commerce market, growing middle class, 5G technology, and Chinese protectionist laws alongside the country’s cyber security laws which have continued to support Alibaba’s growth. The purpose of this report is to analyze the internal and external environment of Alibaba. Through examining Alibaba's internal capabilities (SWOT) and external environment (PESTLE), the author will create strategies that can proactively contend with the challenges currently faced by the company.
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PESTLE AND SWOT ANALYSIS OF ALIBABA Case Study
Key Learning Outcomes
By the end of the case, students should be able to:
- Understand and discuss the external and internal environment of a company and how it impacts its growth and success
- Analyze the broad macro-environment of organizations in terms of political, economic, social, technological, ecological, and legal factors.
- Understand how a company can use its inner resources (strengths) to mitigate its weaknesses and potential challenges in the environment.
1.0 INTRODUCTION
Founded in 1999 by Chung Tsai and Yun Jack Ma with headquarters in Hangzhou, China, Alibaba is China’s largest multinational technology company specializing in e-commerce, internet, retail, and technology (Reuters 2018). Alibaba primarily offers a digital marketplace that connects consumers and merchants and makes it possible for them to buy and sell from each other. Its other businesses include cloud computing, digital media and entertainment, and innovative initiatives among others (Nikkei Asian Review 2018). The Chinese online giant generates 86% of all its revenue from the core commerce business, followed by cloud computing, digital media and entertainment, and innovative initiatives respectively.
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