Sources:

http://www.bbc.com/news/business-29011649

http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/digital-media/11107575/Alibabas-IPO-is-testing-American-appetite-for-China.html

Having raised $25bn in its share, Alibaba, plans to use these funds to further expand the business on an international scale. However, despite being China’s largest e-commerce company, other foreign investors and even CEO Jack Ma himself have predicted that immediate international expansion, specifically in the U.S would be challenging.

Through the Ishikawa diagram, one can deduce that a major cause to this problem is the environment in which Alibaba is placed. One would be the fact that Alibaba originates from China. It is not uncommon for Chinese companies to have been subjected to fraud/scandals. The negative perspective of China’s “culture of fraud” that has been embedded in foreigners may drive away potential consumers even before the company even begins expanding. Another cause is the existence of already established e-commerce firms such as EBay, Amazon and Groupon because consumers who are frequent users of these sites will be more reluctant to switch to a completely new site. Both of these factors would be considered as threats in a SWOT analysis.

Positive marketing is key to overcoming these threats. This includes having foreign users post good reviews not only in the website, but also in other channels such as social media and magazines. Such activities will do much to draw in and reassure consumers who were initially uninterested and distrusting of the site. Alibaba already has a head start as its main strength is that it is very well ahead of US sites in terms of design and improving the consumers shopping experience; by exploiting its strengths, Alibaba will be able to undermine the threats presented to them.