Reference no: EM133491840

Case: Since its establishment in 1999 in Hangzhou, China, Alibaba has become a prominent force in the lives of Chinese consumers.

Alibaba (BABA) was initially regarded as China's equivalent of Amazon (AMZN). Since its IPO on the New York Stock Exchange (NYSE) in September 2014, the online marketplace has experienced tremendous growth in its product and service offerings, as well as its portfolio of owned companies.

In 2019, Tapestry, Inc. (NYSE: TPR), a prominent global player in modern luxury accessories and lifestyle brands, partnered with Alibaba's Tmall, China's largest B2C e-commerce platform. The collaboration resulted in flagship stores for Coach, Kate Spade, and Stuart Weitzman brands on Tmall Luxury Pavilion, offering exclusive products and personalized experiences.

However, in March 2021, China imposed a historic fine of 18 billion Chinese Yuan on Alibaba. The penalty followed an anti-monopoly investigation that revealed the e-commerce giant had been exploiting its dominant market position over an extended period of time. Around the same time, the Chinese yuan depreciated against the U.S. dollar.

Question 1) Before venturing into international commerce, Alibaba was shielded from foreign exchange risks due to its focus on domestic operations. Comment on the opinion.

Question 2) Discuss the reasons Alibaba, a Chinese firm, opted to go public in the U.S. market.

Question 3)provide an analysis of whether Alibaba should opt for foreign direct investment or focus on serving foreign markets.

Question 4) Identify and explain the strategies Alibaba utilized to cooperate with Tapestry.

Question 5) Imagine you are a U.S. investor holding Alibaba's stocks as of March 2021. Discuss whether you are likely to continue holding the stock based on the information provided.