Alibaba: Competing in China and Beyond Essay

IntroductionIn this penning I will work outk the slipperiness Alibaba Competing in China and Beyond. Alibaba under the leadership of jackfruit tree Ma, its develop has transformed into one of the most achievementful e-commerce companies in China. In the 2000s Alibaba had emerged as the vastst e-commerce comp some(prenominal) in China. The federation tailored its strategies to meet the needs of the customers and tell on a mark because of its extrapolateing of the Chinese language and culture. However, some experts curb as well as raised doubts over the sustainability of Alibabas business get.In my report I will critic all in ally analyze the factors that led to Alibaba sustaining its leadership come out in the Chinese e-commerce market. I will Discuss the rationale rear end Ma establishing Taobao.com. I will examine the factors that led to Taoboas mastery in the Chinese online auctions market. Furthermore, with Baidus entry into the e-commerce market, I will talk ab out the challenges that Alibaba faces with regard to sustaining its position in the growing e-commerce market in China. finally I will critically examine Alibabas business model, possibilities of international expansion and the overall sustainability of the company.Questions 1.One of the most signifi idlert factors that lead Alibaba collection sustaining its leadership positioning in the Chinese e-commerce market was its ability to understand the Chinese market itself. Jack Ma, Alibaba Groups founder understood that Chinese consumers and their preferences rarified them selves from those in other countries. Other companies such(prenominal) as eBay did not prise the local market circumstances in China instead, they were using the strategies that were operative in the linked States. I believe for this reason Alibaba Group was equal to(p) to sustain its leadership position.Many of the competitors lacked understanding of the Chinese language as well as the culture. Moreover, Ali baba.com do its services extremely easy for its customers to use. Ma, himself, was a non-technical person and this helped him keep the websites more user-friendly. In the article Ma refers to this stating (Deresky, 2010). If you mention Googles way, you always be a follower We work to concur the Yahoo Search engine more human, more interactive some social function for the 1.3 one million million million sight in China who arent technology-oriented, who dont subsist how to ask the right question to a search engine for people who are like me. (p.320)An added factor is the services that Alibaba.com offered. The company believed that the first thing to do was to build a devoted customer base. Therefore, originally adding any charges, a lot of the services were free of charge. Alibaba.com offered many services such as email and listings of crossways/services free of charge. In addition, e-commerce was vulnerable overdue to the fact that sellers and buyers did not swan the ide a of sending money before receiving their products and the sellers wanted the money before they shipped their products.For these purposes, Alibaba.com launched Alipay in 2004, which was an online payment solution that allowed the users to make money movements in an easy, quick and safe way. All and all Alibaba.com basically concentrated greatly on increasing costumer happiness even on the expense of not gaining maximum profitability. The company made its customer and getting to know what customers want its number one.Question 2.Jack Ma established Taobao.com in May 2003 to enter the profitable e-commerce market. Taobao.com as well as symbolized a part of Mas Alibaba.com business model of get together SMEs, customers together, and helping SMEs grow. Taoboas goal was to generate an online trading platform for both(prenominal) B2C and C2C models. Several factors lead to Taoboas success over the rival eBay in the Chinese auctions market. First, Ma managed to raise a substantial inv estment of 56 million dollars from Softbank and teamed up with Masayoshi son the founder and CEO of Softbank who had previously helped to get the better of eBay in Japan (which lead to eBay leaving Japan in 2002). excessively again Ma decided to build a loyal customer base before really attempting to make a profit he did this by offering free listings as opposed to eBay, which charged for listings (Deresky, 2010).A major factors in Taoboas success was Alibaba Groups better management of the trust factor involved in e-commerce trading and better understanding of the local Chinese market. eBbay positioned its standard business model that was used in the United States and other countries. Taoboa, instead, established its own payment escrow service. With AliPay buyers paid into an escrow account that did not pay the seller until the buyer noted he had received the product therefore, making the transaction thrust worthy since the money was in escrow until the transaction was completed (Deresky, 2010).Furthermore, Taoboa offered e-mail and chat services between users unlike eBay, which out of sight identities and only had an offline messaging system. Taoboa also publicized aggressively through websites and billboards in major population areas something eBay did not do. The final steps of defeat for eBay was when Taobao offered collar years of free listings and when Taoboa launched its B2C services in 2006. Moreover Taoboa had a large list of companies supporting it and also Alibaba.com members that could join easily. Overall Taoboas success over eBay has been attributed its ability to know the local Chinese market and adapt to it as opposed to eBays strategies of using a inefficient model that could not adapt to the Chinese market (Deresky, 2010).However, now Taoboa is facing ambition from a company that knows the Chinese market very well. Taoboas important competitor Baidu, is the largest search engine market share holder in China. Baidu has a large, loyal customer base to work with and has ability to advertise and link its own ecommerce website. Taoboa will have many challenges facing the disceptation from Baidu. Never the less Alibaba Groups strong and evident presence in the Chinese e-comercial market signifies the companys ability overtake its competitors by feature all services and maintaining the user-friendliness of its services in B2B, C2C and B2C markets.Question 3.Absolutely it is sustainable. As Alibaba Group now further develops and expands its various web services, it must also additionally develop the various products within each website. Alibaba Group should have one department focusing one website development aspect and some other department focusing on product development aspect. The company digest still capitalize on his legacy sites that have millions of monthly subscribers. The purport for the company should be to find a way to raise the monthly run rate on each customer on a yearly basis, this would allow Ali baba Group to use these profits to fund the companys efforts to expand.In my opinion Alibaba Group should focus on piteous into Russia first, using their political ties to their advantage. Russia has many raw materials but few grinder centers like China. If they could move into Russia, this would effectively provide geographical access to the substance East and Northern Europe in the future. However, after Russia, I would in the first place focus on expanding through Southeast Asia all the way vanquish to Australia. This would fundamentally provide an ecommerce solution that can link B2B, C2C, B2C, sales crosswise the entire Eastern part of the world.ConclusionAfter reading the case and answering to the questions it seems like the case is too good to be true. still though Jack Ma had proven his capability ofbeing a good leader and business man it is impressive how he started from cultivated cabbage and was able to gather good people around him and develop this prospering mul tinational company. I truly believe that Mas and Alibab Groups lynchpin to success were the founder people in the company. Overall I see Alibaba Groups story as a big success. It is truly a sacred story. In the words of Mas business partner Masayoshi Son (Deresky, 2010).If theres a company outside of America that can introduce a new business model to the world, it is Alibaba. (Founder and CEO of Softbank Corporation, in Japan 2005.)ReferenceDeresky, H (2010). International Management Managing Across Borders and Cultures. seventh ed. Pearson Boston. 310-322.