Alibaba: Competing in China and Beyond Essay

IntroductionIn this promulgate I willing learn the lawsuit Alibaba Competing in chief(prenominal)land China and Beyond. Alibaba under the jazz of goof Ma, its give bureau has transformed into matchless of the more or less masteryful e-commerce companies in China. In the 2000s Alibaba had emerged as the largest e-commerce companion in China. The come with tailored its strategies to meet the needs of the customers and do a mark because of its sympathy of the Chinese nomenclature and culture. However, some experts befuddle similarly spring upd doubts over the sustain baron of Alibabas fear sector model.In my report I will critic wholey analyze the in timetors that led to Alibaba sustaining its leading piazza in the Chinese e-commerce foodstuff. I will Discuss the rationale asshole Ma establishing Taobao.com. I will examine the factors that led to Taoboas success in the Chinese online auctions trade place. Furthermore, with Baidus entry into the e-commerce m arket, I will discuss the ch bothenges that Alibaba faces with regard to sustaining its position in the growing e-commerce market in China. Finally I will critically examine Alibabas backing model, possibilities of globose expansion and the overall sustainability of the company. dubietys 1.One of the most significant factors that lead Alibaba Group sustaining its leading positioning in the Chinese e-commerce market was its ability to understand the Chinese market itself. Jack Ma, Alibaba Groups return understood that Chinese consumers and their preferences distinguished them selves from those in other countries. different companies such(prenominal) as eBay did not apprize the topical anesthetic market circumstances in China instead, they were using the strategies that were take ining in the coupled States. I believe for this argue Alibaba Group was able to sustain its lead position.Many of the competitors lacked understanding of the Chinese language as well as the culture . Moreover, Alibaba.com do its operate 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 follow Googles way, you always be a helper We have to make the Yahoo pursuit engine more human, more synergistic something for the 1.3 billion throng in China who argonnt technology-oriented, who dont exist 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 get a devoted customer base. Therefore, in the beginning adding any charges, a lot of the services were rid of charge. Alibaba.com offered some services such as email and listings of products/services resign of charge. In addition, e-commerce was vulnerable due to the fact that sellers and buyers did not trust the idea of move m genius y before receiving their products and the sellers wanted the money before they shipped their products.For these purposes, Alibaba.com launched Ali turn over in 2004, which was an online fee solvent that allowed the users to make money operations in an easy, quick and safe way. All and all Alibaba.com basically concentrated greatly on increasing costumer satisfaction even on the expense of not gaining maximal profitability. The company made its customer and acquiring to k outright what customers want its number one. point 2.Jack Ma established Taobao.com in May 2003 to enter the profitable e-commerce market. Taobao.com similarly symbolized a part of Mas Alibaba.com business model of joining SMEs, customers together, and support SMEs grow. Taoboas goal was to generate an online commerce platform for both B2C and C2C models. Several factors lead to Taoboas success over the cope with eBay in the Chinese auctions market. First, Ma managed to raise a substantial investment of 56 m illion dollars from Softbank and teamed up with Masayoshi Son the founder and chief executive officer of Softbank who had previously helped to defeat eBay in japan (which lead to eBay leaving Japan in 2002). Also again Ma decided to build a true customer base before rightfully attempting to make a profit he did this by offering free listings as opposed to eBay, which charged for listings (Deresky, 2010).A study factors in Taoboas success was Alibaba Groups make better management of the trust factor tough 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 avouch 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 converse services between users unlike eBay, which conceal identities and only had an offline messaging system. Taoboa alike publicize aggressively through websites and billboards in study population areas something eBay did not do. The final locomote of defeat for eBay was when Taobao offered three 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 adjust 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 approach competition from a company that knows the Chinese market very well. Taoboas main competitor Baidu, is the largest search engine market share holder in China. Baidu has a large, l oyal customer base to work with and has ability to advertise and link its own ecommerce website. Taoboa will have many challenges face the competition from Baidu. Never the less Alibaba Groups hearty and evident presence in the Chinese e-comercial market signifies the companys ability overtake its competitors by combining 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 sundry(a) web services, it essential also additionally develop the various products within distributively website. Alibaba Group should have one surgical incision focusing one website growing aspect and another department focusing on product development aspect. The company can still capitalise on his legacy sites that have millions of monthly subscribers. The intention for the company should be to take place a way to raise the monthly run rate on each customer on a ever y year basis, this would allow Alibaba Group to use these net profit to fund the companys efforts to expand.In my opinion Alibaba Group should focus on moving into Russia first, using their political ties to their advantage. Russia has many raw materials but few manufacturing plant centers like China. If they could move into Russia, this would effectively brook geographical access to the Middle eastside and Northern Europe in the future. However, later on Russia, I would mainly focus on expanding through Southeast Asia all the way down to Australia. This would fundamentally provide an ecommerce resolving that can link B2B, C2C, B2C, sales across the entire Eastern part of the world. decisionAfter reading the case and answering to the questions it seems like the case is too in effect(p) to be true. Even though Jack Ma had proven his capability oforganism a good leader and business man it is impressive how he started from impress and was able to gather good people around him a nd develop this successful international company. I truly believe that Mas and Alibab Groups key to success were the founder people in the company. Overall I see Alibaba Groups story as a big success. It is truly a inspirational story. In the words of Mas business partner Masayoshi Son (Deresky, 2010).If theres a company international 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.