there are some unique challenges that Alibaba faces in global markets. For example, switching costs to customers are low in the e-commerce industry. What keeps customers loyal is the consistent quality of service and price. The domestic macro-environmental and competitive threats that are covered 2 can seriously hamper Alibaba’s growth in China and the rest of the world. See Table 2 below.

Table 2 Impact of Macroenvironmental and Competitive Factors on Alibaba in China and Global Markets

Factor	Impact on Alibaba in the Chinese Market	Impact on Alibaba in the Global Markets
Demographic	Young population in China (and other developing nations)	Aging population in developed nations
Sociocultural	Rising concerns about health and climate change; xenophobia	Rising concerns about increasing market power & dominance by a few Internet companies; rising nationalism
Political/Legal	Barriers to e-commerce and social network rivals to protect incumbent Chinese providers	Open access and privacy/security concerns; trade barriers and tariffs
Technological	Diffusion of mobile devices and Internet access; cloud-based computing	Disruption of bricks & mortar retail by e-commerce vendors
Economic	Rising affluence	Low interest rates & low unemployment boost consumer spending
Global	Many global supply chains originate in China and the Pacific Rim.	Increasing global trade/emergence of China as a global economic power
Competitive	Moderate buyer power Moderate supplier power Low threat of new entrants Moderate threat of substitutes Moderate industry rivalry	High buyer power Moderate supplier power Low threat of new entrants Moderate threat of substitutes Intense industry rivalry

1. What steps will Alibaba need to take to retain a dominant and competitive position in China’s domestic market?
2. What are the domestic competitive threats?