Alibaba.com: A Born-Again “Born Global” Firm?
Jack Ma had reached the pinnacle of a decade of entrepreneurial success when his firm,
Alibaba.com, tripled its 2007 IPO price on the first day listed on the Hong Kong Stock
Exchange. Alibaba.com had become the world’s fifth and Southeast Asia’s largest internet
firm. Alibaba’s performance continued to skyrocket until 2011, when the company faced
success and failure, both of its own creation. On the one hand, Alibaba had amassed over
50 million registered users ranging from entrepreneurs to SMEs, small e-tailers to retail
giants. Serving over 240 countries and regions, it operated through 70 offices located in
greater China, India, Japan, Korea, Europe,and the United States. On the other hand, new
challenges struck at the heart of its mission to “last 102 years.” China’s SMEs struggled
with rising raw material, foreign exchange, and labor costs at home, whereas Eurozone
debt and slow U.S. economic recovery led to weak overseas demand. Additionally, broadscale supplier integrity issues led to the resignation of CEO David Wei and COO Elvis
Lee who had led the previous five year’s success.
In January 2012, Jack Ma, chairman of the board and returning CEO, launched a new
initiative to reprivatize the company that could cost billions as it buys out investors such
as U.S.-based internet portal Yahoo, which holds a minority 23% stake. Many industry
analysts asserted that Ma and Alibaba Holdings did not have the capital to make such an
aggressive move. However, as of May 2013, 15 banks including the Chinese
government’s policy-oriented China Development Bank (CDB) had agreed to lend
Alibaba a combined US$ 6 billion toward a US$ 6.3 billion price tag for Yahoo’s stake
with the rest of the money coming from Alibaba’s cash reserves.
Alibaba.com now has over 69 million users. It may be that Jack Ma is back in the
entrepreneur’s game after all.
Review the attached case study file. Then, research Alibaba’s current business,
entrepreneurial history, and the industry it operates in. In your analysis, address the
following:
1. Would you consider Alibaba a “born global” firm?
2. How effectively does Alibaba help entrepreneurs overcome “psychic” distance?
3. Which internationalization entry modes has Alibaba favored? Were they all
successful?
4. How effectively has Alibaba utilized the five entrepreneurial strategies identified
in the module overview?
5. What are the strategic implications for action for Alibaba given your findings?
Suggested Resources:
Alibaba 2011 Annual Report and company website
Company, industry, and rival analysis (OneSource, Global Data, MarketLine, and
Lexis-Nexis Academic: Company Dossier)
Recent events (Reuters, WSJ, Financial Times, etc.)
