Alibaba LOVE the price bargaining. So, Alibaba creates
Alibaba is an online commerce company, a search engine, a bank, a shipping service, a messaging
platform and, a media house – all in one package. Alibaba is a combination of Amazon, eBay and
Paypal with a dash of Google.
Alibaba Group was founded by Jack Ma along with 17 other co-founders in 1999 with the website
Alibaba.com, a business-to-business portal with an aim to connect Chinese manufacturers with
international buyers. Today, Alibaba Group Holding Limited is one of the biggest companies in
China that provides consumer-to-consumer, business-to-consumer and business-to-business sales
and various other services via e-commerce web as well as offline portals. The major revenue
earning services include electronic payment services, marketplace, and data-centric cloud
(a) To maintain efficiency do they conduct a performance gap for identifying the need for
performance improvement? (Research and discuss the following for your project –
work flow, continuity of production, production machinery, the use of automation, and
Many people think the success of Alibaba is derived from the fact that China is one of the biggest
economies on the planet with the population over 1.411 billion people. There is something more
than that. Let’s check out what we think Alibaba’s secret sauce is that they understand customer
behavior clearly. They know for the fact that Chinese customers just LOVE the price bargaining.
So, Alibaba creates the environment that customers can shop the way they always do in real life.
They build a chat application that customers will feel good by asking some discounts from vendors.
Another success factor of Alibaba is called “Xiaoer.” Xiaoer is literally a team of customer service
representatives who have the power to mediate any disputes. They also have the authority to
manage and control vendor’s performance and invite top performing vendors to participate in the
new marketing campaigns. So, Alibaba is delivering outstanding services as part of successful
supply chain. Alibaba established logistics partnership in China. China is a big country and some
parts are less developed than the others. In order to serve customers in as many areas as possible,
Alibaba relies on third party logistics providers. At first, Alibaba uses private couriers for in-
service areas and China Post for countryside delivery. When Alibaba realize that the expansion of
the network is required, they establish the company called “Cainiao”. “Cainiao” is actually not an
in-house logistics arm but it behaves like a fourth party logistics provider. While many companies
in the United States are results-driven, Alibaba has a different perspective. Even though high
performing employees are constantly rewarded with many cool perks, Alibaba encourages its
employee to set the realistic goal and break down the process so they can get some results every
day. Morning briefing and the after-work meeting is the way to explain what to do and lesson
learned each day. Alibaba encourages its employees to rotate work between each business unit and
branch quite frequently. Doing this way, each employee will have more understanding about the
overall business process. So they will be able to coordinate with each department much better.
Lastly, Jack Ma is known to hold the former G.E. Executive Jack Welch in high regard. Jack Welch
said in his book “Winning” that “Leaders make sure people not only see the vision, they live and
breathe it.”. He created vision for Alibaba.
Another venture from Alibaba is Alibaba Cloud. Alibbaba is charting a wat to push the application
of artificial intelligence in healthcare to make medical treatment more accessible, timely and
affordable. Health is very common issue not in china but in every country, lack on advanced
technology for health diagnosis, delay in treatment may prove severe cause. In march 2017,
Alibaba launched ET Medical brain which was one of adventures in artificial Intelligence. This
ET Medical Brain is suite of programs that enable virtual assistant for patients, derug development,
(b) What are the roles of senior management and teams in promoting operational (project)
efficiency? (Research and discuss the following for your project – changes to management
processes, information systems, management style, personnel competence, and rewards)
A Case Study on Building an International Imperium on Information and E-Commerce
The Alibaba Group is a group of internet based businesses with a mission to make it easy for
anyone to buy or sell anything, anywhere in the world, but especially to make Chinese businesses
more open and accessible for the world. Alibaba is the first company to make market information
and data available for free to all the users, all over the world. Customers/providers of goods can
expand the reach of their business quickly. In addition, the connection system of Alibaba and how
they connect business people with suppliers is fascinating. Their business strategy has made them
both well-known and successful in Asia already. Alibaba’s international interest is to get more
access to popular Western brands, especially high-end and luxury brands, given the huge unmet
demand among Chinese consumers for products that are not yet available in China. For that matter,
it is likely that Alibaba will become a successful brand for retailers all over the world for selling
their products and since the world is getting smaller, perhaps even for B2B or C2C markets.?
2. Develop a benefit map to show (the company you chose as a group) has used project
management or any efficiency model to help improve management. Focus on Outputs, not
Outcomes. ?A Benefits Map is created in a visual form to capture and communicate the
relationship between project outputs and business outcomes. You are answering the
question, does the organization efficiently meet its mission? ?
When it comes to online marketplace, the first name that comes to your mind is
Amazon. Amazonsurely is a big e-commerce company, but there is another upcoming e-commerce
company that is about to (and has already started to) take over the internet marketplace. It is a
China-based company whose founder was rejected by KFC. He is now the richest man in China.
This e-commerce giant is none other than Alibaba. With one of the most successful business
models in the world, this company is on to take on the online marketplace globally. But how does
Alibaba make money? What is Alibaba’s business model? Let us understand more about the
company before we move onto discuss Alibaba Business Model.
Alibaba has come a long way since its beginning in 1999. As of April 2016, It is the world’s largest
retailer surpassing Walmart, with operations in over 200 countries. But what exactly is Alibaba
Business Model? How did it manage to gain such success? For that let us first understand how
does Alibaba work and what all businesses does it own.
Alibaba is also involved/have stakes in other businesses. Some of them are:
Sina Weibo: China’s version of Twitter,
Youku Tudou: similar to YouTube,
Aliwangwang: an instant messaging service,
Juhuasuan: sales and marketing platform for flash sales for Taobao and Tmall.
Laiwang: a messaging application competing with WeChat.
Alibaba is famous for its B2B website, Alibaba.com, that facilitates international trade in China
and a few other Asian countries. However, it is not the sole reason for Alibaba’s success. It is
really in the game because of its e-commerce within China: Taobao and Tmall. Sales on the
Taobao marketplaces make up more than 80% of all online purchases in China. That’s huge.
3. Research and write what are the following actions the organization takes to ensure their
Business Planning Process helps to achieve their goals:
a. How does your organization develop long-term objectives for achieving the mission?
A Closer Look At Alibaba’s Long Term Strategy
Great SpeculationsBuys, holds and hopes Opinions expressed by Forbes Contributors are their
In a recent letter to its shareholders, Alibaba’s Executive Chairman Jack Ma mentioned that with
e-commerce rapidly becoming a “traditional business,” pure e-commerce players will face
tremendous challenges. The company is anticipating a transformed retail industry in the future,
one driven by the integration of online and offline shopping, logistics and data transmission across
a single value chain. The company is thus adapting itself to remain a major player in the new
economic environment. As the line between online and offline retail blurs, large e-commerce
giants such as Amazon are looking to open physical stores to adapt to this trend and brick and
mortar stores such as Walmart are strengthening their online presence. Alibaba is looking to create
an integrated solution for the future of commerce which includes marketplaces, logistics, cloud
computing and payments, making it easy for merchants to do business anywhere. Cloud computing
is likely to play a major role in the company’s long term strategy as it aims to serve 2 billion
customers around the world in the next twenty years.
See our complete analysis for Alibaba
Creating A Strong Infrastructure For Commerce
As pure e-commerce players look for other growth options, Alibaba is looking to create a retail
ecosystem which integrates the online experience with brick and mortar shopping. The company
is reportedly working with Suning Commerce and Intime Retail to achieve this goal. Alibaba’s
long term goal is to be the enabler for merchants to improve their overall sales and marketing
productivity and to enhance the shopping experience using digital tools. The company’s online to
offline (O2O) efforts are directed towards this goal and its mobile app merchants with the ability
to run their businesses more efficiently. The company is working on several initiatives in the
payments segment with Alipay (its payment gateway), which is being upgraded to meet
international security standards. In the logistics segment, Alibaba has alliances with several
logistics companies in Asia to strengthen its delivery network. The company is working to bring
millions of small and medium enterprises on its platform, providing them with ancillary support.
These efforts should continue to drive growth for Alibaba over the long term.
In the next 20 years, Alibaba hopes to serve 2 billion consumers around the world, empower 10
million profitable businesses and create 100 million jobs. While its position in China is undisputed,
global expansion has been slow. The company is looking at the acquisition route in India, where
it has stakes in several e-commerce and payment companies. It is likely to establish itself in the
region in the near term. While it is still exploring options in Europe and the U.S., the company is
strengthening its payments tool “Alipay’ such that it can be accepted by merchants in these regions
when used by Chinese travelers. Penetration into Europe and the U.S. can be trickier compared to
other Asian countries, but Alibaba is gradually trying to establish itself in these regions through
acquisitions to understand the market better. However, issues such as the large number of
counterfeit merchandise on its platform continue to plague Alibaba’s reputation in these regions.
As it works towards meeting its ambitious target of a large user base, global growth is essential
element of Alibaba’s longer term strategy.
Leveraging Cloud Computing Power
Currently Cloud Computing is a very small part of Alibaba’s business and accounts for around 8%
of its valuation according to our estimates. However, the company believes that cloud computing
and big data will be the two main pillars which will support its merchants in future. Computing
power and data would be the two key drivers which will transform the retail landscape in the next
thirty years, according to Alibaba. The company has been investing heavily in its cloud
infrastructure, which ranks among the world’s top three cloud computing companies. Nearly 35%
of the websites in China are hosted by Alibaba’s cloud. Another goal of Alibaba’s long term
strategy is to leverage this infrastructure to enable businesses to market their products better and
reach target audiences easily.
As e-commerce players look for the next wave of growth, Alibaba aims to integrate its offerings
into a retail ecosystem that can act as an enabler for merchants to do business better. This strategy
is the right approach for the long term. The company’s ability to effectively execute this strategy
amid strong global competition will be the key driver of its growth.
b. Do they use any specific models (Project Management, Sig Sigma) to help them achieve their objectives. ?
Alibaba.com is China’s largest global online wholesale marketplace and is the international
version of 1688.com. Alibaba.com, which is in English, serves buyers from over 200 countries
by connecting them with suppliers in China. Combined, 1688.com and Alibaba.com are the
biggest domestic and international B2B wholesale marketplaces globally.
Revenue model: Alibaba.com does not charge a commission. It generates revenue from
membership fees, marketing services and value-added services.
Strategy and Value Proposition
An effective channel for domestic suppliers to export to the rest of the world: Alibaba.com
helps domestic suppliers enter the international market through product listings, promotional
campaigns and order matching.
Digitizing global trade: Through solutions and partnerships, One Touch, an affiliated import
and export service, provides import/export business solutions such as custom clearance, value-
added tax (VAT) refunds and other value-added services. Alibaba.com has partnerships with
domestic third-party logistics providers and international players such as UPS, Fedex, Maersk,
DHL and Kuehne + Nagel to boost cross-border logistics operations.
Quality assurance for global buyers: Alibaba.com launched the Trade Assurance Program in
order to create trust and attract overseas buyers. Buyers are eligible for refunds related to quality
issues. Alibaba OneTouch vets suppliers that wish to participate.
Financing support enabled by data technology: “e-Credit Line” provides trade financing to
small businesses buying and selling on Alibaba.com. The credit financing decision is powered by
an automated credit scoring system that is able to grant full approval within 24 hours.