Alibaba is a public company of China which is offering products or services including E-commerce, online auctions, mobile commerce, online shopping and online transfer of money. There are various factors present in the environment of Alibaba which can affect the performance of Alibaba as well as its effectiveness in the execution of the operations of the organisation (Chapman, 2014).Business environment in which the organisation exists is the sum total of the macro environment factors which can be explained as the factors affecting the economy at a large level and micro environment factors which can be explained as the factors creating direct impact over the business and its operations. For the analysis of the environment in which Alibaba’s existing strategic tools will be used. For analysing the macro environment factors PESTEL analysis will be used which helps in the analysis of the impact of these macro environment factors over Alibaba and helps in strengths and weaknesses of Alibaba in dealing with the threats and opportunities present in the business environment (Alibaba group, 2015). For the analysis of the micro environment factors six factors of the micro environment of Alibaba will be analysed. Alibaba is performing well and is using the resources available with it in an effective manner so as to operate in a successful manner on international level. It is expanding its area of operation with a motive to serve the large number of customers and using the factors of micro and macro environment factors in an effective manner. It has used a slogan “Global trade starts here” for promoting international trade (Alibaba health to develop online B2C & O2O operations platform for pharmacies, 2015).