Alibaba Analysis

1.0 Executive Summary Alibaba Group (AG) is Jack Ma for leadership and other 18 people, founded in 1999 in Han!ho Han!hou.A u.Alib libaba aba Group Group operat operates es a nu" nu"ber ber of bus busine inesse sses, s, and also also fro" fro" the associ associate ated d co"pan#$s business and ser%ices to obtain business ecos#ste" support.Alibaba roup$s business includes& 'aobao, '"all, barain, 'he lobal speed sell ton, Alibaba international tradin "arket, 188, Ali"other, Alicloud, 'he ant old, *o%ice net+ork, etc.n -epte"ber 19, 01/, Alibaba Alibaba roup officiall# officiall# listed on the *e+ ork stock echane, echane, stock code 23A3A2, 23A3A2, founder  and chair"an of the board for Mr Ma. 'hrouhout 014, Alibaba total re%enue of 9/.58/ billion #uan, net profit is 8.8// billion #uan.n April , 01, Alibaba announced has beco"e the +orld$s larest retail tradin platfor".6hina$s eco""erce ro+th in the past 10 #ears, in the near future +ill be "ore than the 7nited -tates. Alibaba roup in 6hina$s eco""erce "arket do"inance. Alibaba$s '"all dail# turno%er reached 10. billion #uan.Alibaba roup si %alues for ho+ to run the business, to attract talents, e%aluation staff, and decided to re+ard e"plo#ees  pla# an i"portant role, the si %alues are& custo"er first, tea"+ork, inno%ation, interit#, interit#, passion and dedication.

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2.0 Background Background of Alibaba Alibaba Group (AG) (AG)

Alibaba Group (AG) is Jack Ma for leadership and other 18 people, founded in 1999 in Han!hou, Jack Ma belie%e that the nternet can create fair co"petition en%iron"ent, for s"all  businesses to epand business throuh inno%ation and technolo#, and participate in do"estic or  lobal "arket co"petition co "petition in a better position.:6'A position.:6'A'* Ali14 ;l 1055 < Alibaba Group=s "ission is to "ake it eas# to do business an#+here. AG ha%e the 'aobao, '"all, '"all, >a# treasure to "ore than 10 kinds of ser%ices ser%ices such as business. business. Alibaba Alibaba roup$s oal in %ision is to build the future of business infrastructure. AG belie%es that the custo"ers +ill li%e and +ork in AG +ill continue for at least 10 AG. : 6'A 6'A'* Ali14 ;l 1055 < Alibaba roup=s "ain operation of the business is the 'aobao, '"all and Juhuasuan. 'aobao is the one of the AG +as founded in Ma# 005. t is a focus on di%ersified choice, %alue and con%enience of 6hinese consu"ers preferred online shoppin platfor". Asia >acific reion is a larer net+ork of retail. '"all is Jack Ma$s ne+ buildin in 36 (3usiness  to  6onsu"er) online retail "arket. 'he interate thousands of brands, "anufacturers, bet+een businesses and consu"ers to pro%ide one on e stop solution. : 6'A 6'A'* Jit14 ;l 1055 @ ser%ices. dentified the opportunities for the co"pan# is on the basis of the assets, +hich the co"pan# can use as opportunities. t is also to anal#!e %alue chains used to "easure AG. n addition to +eakness and threats are also identified for the business and a stroner a+areness that +ill help AG strateies in the future. t=s also takes >-' to help AG. -?' anal#sis is a full strateic anal#sis tool but unlike other tools, it could be a +ide rane of products in the eternal en%iron"ent, the business +ould not take the i"pact of the co"pan#, +hich could be a disad%antae for the -?' anal#sis. Strengt&   '    i   '   y    l   a   n    A   n    i   a    &    %   e   u    l   a    $

1. Bocus on the product %alue added in the "arket . -killful +orkforce is the ke# of  success in AG 5. Alibaba ha%e a stron brand na"e in the eco""erce "arket /. 'echnolo# infrastructure "pportunity

   #    S    E    (

1. A ood relationship +ith the o%ern"ent . 'he econo"# of circu"ference in Alibaba 5. -ocial and cultural aspect of  6hina pla#s an i"portant role /. 'he technolo# in 6hina is

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.+ Strengt&'

Alibaba Group=s %alue proposition for clientele is a ne+ creation of %alueadded as a result of the orani!ation inter"ediaries business processes are interated ser%ed closer to suppl# sources that accord cost effecti%e business strenths. +. ocu' on product value*added

Alibaba Group=s is the larest +orld businesstobusiness eco""erce ser%ices pro%ider, the %alueadded ser%ices account for about 50 percent of sales fro" pa#in "e"bers b# net #ears. Alibaba Group=s +ill be "ore focus on the product %alueadded +hich ha%e nlish lanuae 4

international "arketplace +ebsite +ould constitute "ore than 50 percent of sales and do"estic %alue%alue added ser%ices re%enue +ill be / percent. 3esides that, Alibaba s "ost popular  %alue aded ser%ices last Fuarter +as the Alipress +holesale transaction platfor" , Ali   Ad%ance ke#+ord listin , pre"iu" place"ent for searchin process and Ali@oan. :6'A'* -ou10 ;l 1055 < 2. Skillful !orkforce

Jack Ma is the founder and 6 of Alibaba Group. Jack Man is one of the +orld leadin e co""erce +eb portals, he=s ke# of success are true and inspirin for all e"plo#ee to i"pro%e the +orkforce and hu"an resources. Alibaba is not Iust ha%in an eco""erce co"pan# and also the 5 "ain platfor"s 'ao3ao (consu"er to consu"er co"pan#), '"all ( business  to consu"er  fir" ) and Alibaba.co" (business to business operation ). 'his sho+s that Jack Ma ha%e  pro%idin the reat +orkforce and the co"pan# is ettin reater and skillful. :6'A'* Mic1/ ;l 1055 < . Strong Brand ,ame

Alibaba Group=s ha%e the stron brand na"e +hen 1999 Jack Ma founded the +ebsite Alibaba.co". Alibaba is a 6hinese A"erican e co""erce co"pan# that pro%ides business to  business, business to consu"er and consu"er to consu"er. Alibaba is the +orld=s larest e co""erce business and handles sales bet+een i"porters and eporters fro" "ore than /0 countries and reions. (Alibaba, 01) Gi%in so"e ea"ple under Alibaba Group +hich is 'ao3ao, '"all.co" , e'ao, Alipa#, Alipress , ia"i , Alibaba.co" and etc. -. #ec&nology nfra'tructure

AG technolo# is "ade possible b# access +ebsite to search infor"ation rele%ant to the eecution of business transaction and it is easil# and sa%e ti"e and cost interaction o%er the +eb interface. Alibaba is bridin the ap bet+een direct "anufacturers and producers +holesale and retail custo"ers throuh its technolo# based solution and ha%in loistics support for the deli%er# postae transactions to co"plete the "arketin process +hich #ield the ulti"ate %alue. Bor ea"ple 6hinese +holesalers and "anufactures suppl# to lobal consu"ers on Alipress and lobal +holesalers and "anufactures suppl# the +holesale on Alibaba.co". (Keuters, 01/) 5

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.2 !eakne'' +. #oo many 'eller'

Alibaba roup ha%e a lot of seller +ho" ha%e been partner in ross nu"ber in online "arket. Alibaba roup has enlare the eco""erce seller hiher because the# i"port their ite"s o%ersea. 'he co"pan# continue to increase their forein products since the# see lare a"ount custo"er   people their products. 'he result of capital dischare forein in%estors "o%e out Alibaba at one  point of ti"e the co"pan# +eaken the econo"#. 'he proress as the o%ern"ent strule to sti"ulate eports throuh a softer currenc#. 'he Alibaba roup rand up +eaken co"pletel# the second half of 014. Eurin the ti"e period those products ha%e been sales displeasure the co"pan# but the# rebound in 01. Alibaba roup ha%e seen forein oods consu"er +ho" trustable and safer sells their products. 'he sellers are bein too freedo" and hih opportunit# to sell at profitable rates. ts "akes "ost the re%enue b# sellin pro"ote scope for the sellers. : 6'A'* Gen1 ;l 1055 < 2. nitial ublic "ffering (") /ill expo'ed a&oo

A deal +ith ahoo, +hich o+ned /0D of Alibaba roup shares. t "eans that the > it=s done +ould allo+ Alibaba to bu# back its share and end often stor"# relationship. 'he effect of it etre"el# difficult to concei%e the dra+back of ettin L10 billion in cash fro" +hat +ill likel#  be the "ost producti%e tech > e%er. t been outside li"it ahoo pro"pt pa#da# fro" its /D stake in 6hinese eco""erce hue Alibaba and thins aren=t so ros#. Alibaba i"ple"ent an dra+ attention platfor" for in%estors tr#in to ain back the profit fro" 6hina=s internet econo"#. 'here could be so"e alertness. 'he shares end up been bouht back b# Alibaba Group after  "uch losin their epense %alue. : 6'A'* Mar15 ;l 1055 < . 1ack of loyalty on e*commerce Alibaba

'here +as a lack of trust fro" the consu"ers because of the hue a"ount of fraud ha%e co""itted throuhout "arket places. 'here is a "assi%e cultural influence on Alibaba +ith "ost of the suppliers bein affected. Alibaba hierarchies and shares ha%e been break do+n due to the effect of >. A lot of forein consu"er stop purchase Alibaba products lack of technolo#, the trust to le%erae "assi%e se%er to kill their earnin as +ell. -o"e of the lo#al custo"er to+ards Alibaba after the cheapest deals and best knockoff to retain the custo"er trust. Alibaba hih

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%alue and hihl# secure users attract brands and "erchants decreasinl# rel# on Alibaba online "arketin proble" to reach and enae +ith these consu"ers. : 6'A'* Mar15 ;l 1055 < -. Alibaba Group rely on t&e government

Alibaba roup apparentl# "aIor fact is eco""erce +hich is internet infrastructure 6hina. Alibaba %er# dependent rel# on o%ern"ent. Alibaba is %er# ne+ to the 7- "arket ha%e been onl# traded since 01/. ?hen 7.- de"onstrate the strenth in 6hina, the 6hina bets the risks. Eurin the ti"e period 6hina +as been shaken and the o%ern"ent policies been "ore difficult. 'he specific o%ern"ent bans al"ost "ost of the internet access and internet support is under  control b# ad"inistrati%e throuh stateo+ned teleco""unication operators. Alibaba ha%e  biest lost +here all the net+orks super%ised b# nfor"ation 'echnolo# in 6hina. Alibaba Group not per"itted to connected +ith an# alternati%e net+orks e%en thouh in the e%ents of  disruptions, failures or other proble"s +ith 6hina=s internet infrastructure. n addition this cause a biest straiht for+ard i"pact on Alibaba the reputation tre"ulousl# shaken. : 6'A'* Ja#1 ;l 1055 <

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. "pportunity

'he possibilities Alibaba Group has in store are i""ense. Most of the result fro" forces. As it has a solid foundation in the 6hinese "arket and a deep understandin of eco""erce, it has tre"endous opportunities to tap into other "arkets. 'houht the ndian "arket has t+o do"inant  pla#ers, a lare influ of Alibaba has certainl# the abilit# to create +a%es.: 6'A'* Hit1 ;l 1055 < +. olitical

Alibaba Group and the 6hinese o%ern"ent bet+een the ood relations. Althouh these relations are i"portant in all countries, the 6hinese o%ern"ent$s Ianitor decides +ho +ill do it. Bor  ea"ple, Alibaba is one of the fi%e co"panies selected b# the 6hinese o%ern"ent to enter  nternet bankin, a hue opportunit# for a o%ern"ento+ned bank countr#.: 6'A'* >-14 ;l 1055 < 2. Economy

n Alibaba >ost> da#s doubted business anal#sts suspect that the co"pan#$s shares in 014 "a# reach 140 billion 7- dollars. 3ut in -epte"ber the net assets +as 1/4 billion 7- dollars. Jack Ma +rote the best practices in industr#. Ma kne+ he had to do so"ethin different to cancel the other bi ones. Jack Ma understands that there is a ne+ bold strate#, fa"iliar +ith the loistics process, the trust bet+een suppliers and custo"ers, and "obile and onde"and technolo#. : 6'A'* >an1/1 ;l 1055 < Alibaba$s ad%antae is circular econo"#. 6ost sa%ins are part of the Fuotation related to the %arious products that sell a sinle co"pan# throuh the sa"e distribution channel. n this case, Alibaba has t+o outlets, that is, 'aobao +ith thousands of nonbranded products, sold b# unkno+n dealers and '"all, branded products. All aspects of %arious products, especiall# 'aobao, are incredible. : 6'A'* >-14 ;l 1055 < Jack Ma understands the purchasin po+er in 6hina is %er# stron. t +as affected b# the content and recordin of a price of the product fa"il# and the a%ailabilit# of credit. As it has been sho+n that the recent econo"ic situation has sho+n a sinificant decline, it +ill ha%e a bad influence on the purchasin po+er of consu"ers. Bor co"panies that +ant to sell products to hihinco"e and 9

affordable custo"ers, the current econo"# +ould be a disaster for the".: 6'A'* >an1/1 ;l 1055 < ?ith "ore sales related to si!e, cost sa%ins. 2?hat is the eternal di"ension of Alibaba,2 +rote Ea!a+a. 2'he co"pan# said that 'aobao and @#n are responsible for "ore than half of 6hina$s  parcels, 01 'aobao and '"all$s total transactions reached 1 trillion #uan (15 billion 7dollars), "ore than A"a!on and e3a#. . Social

6hina$s social and cultural aspects of the population due to chanin and pla# an i"portant role. Bor ea"ple, population ro+th and ae distribution are constantl# chanin. 'his can also chane social trends and cultural %alues. Ba"il# si!e and social beha%ior often affect the +a# decisions are "ade. ther social factors are consu"er lifest#les, education, reliion and i""iration. 6hina is a collecti%ist culture based on the %alue of Hofstede. : 6'A'* >-14 ;l 1055 < 6hina$s literac# rate is abo%e 90D. 6hina e"phasi!es that the for"ation of "ost countries is literall#. 'here are /0 "illion nternet users in 6hina. 'here are nternet access, 6hinese shoppin is often online. 'aobao is the larest local eco""erce site, "an# people spend a lot of thins fro" the site. 'he 3oston 6onsultin Group epects the fiure to ro+ %er# Fuickl# in the future. co""erce has chaned the +a# local consu"ers see it at the ti"e of purchase. Ho+e%er, there is an orani!ation that +ants to a%oid the risks associated +ith online purchases. 6usto"ers like to shop and enIo# facetoface contact. : 6'A'* >an1/1 ;l 1055 <

-. #ec&nology

'echnolo# has a %er# ood ad%antae in 6hina. 6hina is the +orld$s larest nternet "arket, it is t+ice the 7- "arket, +ith 40 "illion nternet users spend 0 hours per +eek. Most i"portantl#, 6hina Iu"ps fro" the traditional etrailin details.

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2As 6hina$s +ireless co""unications technolo# continues to e%ol%e, 6hina$s tiles retail sales are acti%el# le%erain eco""erce leaps, +hich offer hue opportunities for nternet "erchants, especiall# earl# +orkers, such as Alibaba,2 Nen Hao said. : 6'A'* >-14 ;l 1055 <

Alibaba$s lonter" strate# is to focus eco""erce sites as part of the "obile platfor". Has  been dealin +ith this strate#& June, "ore and "ore "obile host "ore than 00 "illion 6hinese nternet users to bu# Alibaba Alipa#, electronic pa#"ent association and cloud ser%ices sector. : 6'A'* >an1/1 ;l 1055 <

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.- #&reat' +. olitical

n 6hina, Alibaba is the larest and "ost popular online retailin co"pan#, Alibaba Group has a "onopol# on 6hina$s basic online retailin, the 6hinese o%ern"ent is opposed to a co"pan# "onopol# an industr#. 6hina has been carried out on the Microsoft antitrust in%estiation, resultin in a decline in the status of the Microsoft in 6hina a lot. Alibaba Group "a# be hit b# the 6hina polic# at an# ti"e.: 6'A'* Hit1 ;l 1055 < 'he 6hinese o%ern"ent has al+a#s defended its position as a bank. Alibaba Group to pro"ote online bankin action "a# also be cauht in a dispute +ith the o%ern"ent. ?hen a business is in conflict +ith the o%ern"ent, co"panies are often hit hard. 'hat is to sa#, in 6hinese politics, #ou should be careful not to cross the line. 2. Economy

Alibaba Group filed a prospectus +ith the 7.-. -ecurities and chane 6o""ission, plans to "arket in the 7nited -tates >. >rospectus disclosure details of Alibaba holdins, nstitutional holdins, Japan$s -oftbank roup holdin 9/980 shares, the shareholdin ratio of 5/./D AH (/0.95, 1.1, ./D) holdin 4544/1 shares, the shareholdin ratio of  .D. n ter"s of personal o+nership, chair"an of the board of directors of Alibaba Ma holds 01005 shares, the shareholdin ratio of 8.9D. n other +ords, the Alibaba to the hue +ealth to the A"ericans and the Japanese.: 6'A'* ri1/ ;l 1055 < 'he e"erence of Alibaba, there are "an# Iobs are %irtuali!ed, and "an# entrepreneurial opportunities are transparent. 6hina$s real econo"# has been hit. Keal econo"# is the "ain dri%in force of national econo"ic de%elop"ent.: 6'A'* Ja#1 ;l 1055 < . Social  %ultural

Alibaba roup in societ#, there are "an# co"petitors, Jindon "all is his biest co"petitor in 6hina. 'he t+o sides often dispute. 6hina$s Jindon "all spendin last #ear about 100 billion, +hich +ill "ake Alibaba +orried. n the rapid ro+th of eco""erce "arket, Alibaba account 12

for about 48.D of the share, the basic flat +ith a #ear earlier. Ho+e%er, Jindon "all share increased to .8D fro" 19.D last #ear.: 6'A'* ri1/ ;l 1055 < n 6hina, people feel that Alibaba$s 'aobao to sell oods, eiht# percent of all fakes, +hich is the  biest threat to an enterprise. 'his is often a corporate social and cultural proble"s. -. #ec&nology

'he biest threat is lobali!ation and technolo# Alibaba +ireless ter"inal technolo#, ho+ can let the user at the ti"e of pa#"ent card pheno"enon does not appear, ho+ to "ake users "ore con%enient and efficient pa#"ent, ho+ to allo+ users to Fuickl# find the oods, and %ie+ the loistics infor"ation, is the priorit# a"on priorities. ?hen #ou bu# oods in the Alibaba, caton  pheno"enon +ill often appear, +hich +ill "ake bu#ers ps#choloical a%ersion. f such e%ents occur "an# ti"es, bu#ers +ill slo+l# drain. ?ith the rise of science and technolo# 'encent, 'encent also bean to Ioin the online retail industr#. 'encent nc$s products ?e6hat is the "ost deadl# threat to Alibaba in co""unications technolo#. n 6hina, 'encent "icro credit households eceeded 500 "illion dail# inco"e of  nearl# L500 "illion. Alibaba inno%ation is not as ood as 'encent, 'encent to carr# out %ideo technolo# to enhance the status of 'encent. >eople in the purchase of oods Alibaba, is in%isible to the entit# of the oods, +hich "eans that +e do not kno+ the Fualit# and st#le of this product, onl# throuh the seller to "odif# the picture to understand the oods. And 'encent$s %ideo technolo# can see the co""odit# entit#.: 6'A'* Her14 ;l 1055 < Alibaba to sell "ost of the Fualit# of the oods are defecti%e, it also "akes the scrap rate of these oods is particularl# hih.

13

-.+ Strategic %ompetitive Advantage' and 3a4or !eakne''e'

6hina$s population of 1.5 billion, the current a%erae annual ro+th rate of GE> reached 9D to 10D o%er the past 50 #ears, 6hina in the 7nited -tates +ill soon beco"e the second larest econo"# in the +orld "ore and "ore i"portant and influential. 'his positi%e chane can also be seen, the rapid de%elop"ent of 6hina$s "iddle class. 'his fa%orable econo"ic situation and the accu"ulation of "an# 6hinese societies ha%e created tre"endous opportunities for ro+th and established a reat "arketin e"pire. Alibaba Group Holdins toda# in 6hina$s eco""erce "arket do"inated, the effecti%e use of these opportunities. @et take a closer look at the 6hinese iant$s strateic co"petiti%e ad%antaes and the "aIor  +eaknesses -.2 Strategic competitive advantage * Strong Brand ,ame

Alibaba Group (AG) is the larest 33 +ebsite. Has the +orld$s larest online tradin pro%ider, the +orld$s larest business foru", Keistration of AG "e"ber of "ore than 000 e%er# da#. -i"plified 6hinese, Norean and nlish +ebsite for the lobal "erchants to pro%ide professional ser%ices. AG$s business reputation is %er# hih. -uch as 'aobao, '"all, corporate publicit#, al"ost all o%er the +orld ha%e AG$s ad%ertisin. : 6'A'* Gen1 ;l 1055 < Alibaba Group has a uniFue corporate culture, as +ell as the po+erful influence of Jack Ma, caused the co"pan# to "aintain a stron co"petiti%e ad%antae. Ouite a lot of entrepreneurs to the +orship of Jack Ma and AG, the AG brand are ettin stroner and stroner. At this point there is no other eco""erce co"panies can co"pete +ith AG. AG$s corporate %alues& custo"er  first, tea"+ork, e"brace chane, interit#, passion, dedication. AG allo+s "illions of s"all  businesses to obtain capital, and to pro%ide the necessar# help for s"all businesses to for" a ood reputation in the industr#. Alibaba Group to use its o+n stron brand benefit, established the Alibaba >ublic Boundation. AG announced since 010 to the annual inco"e of 0.5D set aside for public +elfare funds, "ainl# used in en%iron"ental protection, is the first do"estic nternet enterprise en%iron"ental

14

 protection fund. AG chair"an Jack Ma to 1./ billion #uan in donations, the ne+ title of 26hina$s national capital2.: 6'A'* >an1/1 ;l 1055 < ?ith the nternet ro+th, Alibaba has "ore than 10 #ears of de%elop"ent histor# and operatin eperience. 'hrouh the nternet de%elop"ent period, +ell into the current rapid de%elop"ent. Alibaba Group "aster po+erful nternet technolo#, deep understandin of user needs, in a ro+in user has a hiher %isibilit# and credibilit#, stron brand appeal. -. Strategic competitive advantage * Skillful !orkforce

-killful +orkforce +hich "ean the Bounder and 6 of Alibaba Group +ho" success and inspirin all e"plo#ee and i"pro%e the +orkforce. Alibaba Group ha%in 5 "ain platfor" of e co""erce co"pan# +hich is 'aobao (consu"er to consu"er) '"all ,(business to consu"er fir" ) and Alibaba.co" (business to business operation).'here is so"e proble"s occur in 3usiness to  business and consu"er to consu"er. : 6'A'* >an1/1 ;l 1055 < 3ased on the Alibaba 6o"plaint 6entre, so"e custo"er "a# co"plaint about recei%ed the fake  products and old %ersion of the products, so"e custo"er did not recei%ed the order for a "onth, and another co"plaint is there is no ans+er or repl# to the co"plaint centre.( Alibaba 6o"plaint 6entre , 01) 'his is the hue proble" that Alibaba is facin.: 6'A'* Mar15 ;l 1055 < -.- 3a4or /eakne'' 5 #ec&nology i''ue

n Jul# 014, 6hina released a draft c#bersecurit# la+ that +ould i%e the o%ern"ent an al"ost unfettered access the user=s data +here national securit# is concerned. 'he o%ern"ent ties the securit# +here Alibaba cannot access o%ersea net+orks. 'he 6hinese o%ern"ent announced a  plan to ha%e police officers stationed in internet co"panies so the co"pan# can better secured the strict policies. At the end of 014, 6hina passed a contro%ersial antiterroris" la+ that reFuired teleco""unication and internet ser%ice pro%iders to pro%ide the 6hinese o%ern"ent +ith 2technical support and assistance2 such as decr#ption, in terroris"related in%estiations. Alibaba business plan is to continue focus on the s"all and "idsi!ed that dro%e Alibaba=s ro+th. 3randin co"petition and the cultural barriers associated +ith 6hinese co"panies are Iust a fe+ of the obstacles Alibaba +ould ha%e to o%erco"e if it tareted the 7- "arket. Eurin the ti"e 15

6hinese internet co"panies lost the trust on o%ersea countr# especiall# 7s. Alibaba ha%e losses a lot because 7- echane chaned. t=s e%entual > is epected to be one of the biest but it=s drop e%entuall#. -.6 3a4or /eakne'' 5 olitical ''ue'

7nderstandin en%iron"ent of Alibaba Group can also be used in a political issue because 6hina is far fro" a co"pletel# free "arket. 'he 6o""unist >art# leads the "aIorit# of lare co"panies b# direct control or b# la+. 3ut the o%ern"ent in the field of eco""erce polic# is relati%el# absolute, Alibaba Group is an ea"ple of the spirit of inno%ati%e entrepreneurs, depends on the o%ern"ent$s friendl# support. Ho+e%er, due to the leadin role of the 6hinese 6o""unist >art#, 6hina$s political fa%or can disappear o%erniht  +hich "a# lead to econo"ic "onopolies or other neati%e choices that deter"ine the restriction of econo"ic and social  po+er. 'hese political risks "a# be the biest financial threat facin Alibaba Group. 'he 6hinese o%ern"ent accused the eco""erce iant Alibaba Group in rare public disputes in these places refused to sell fake and shodd# acts of corruption and other illeal acti%ities. 'his "a# be the double +arnin sin of Alibaba Group, +hich has the 2risk of credibilit#2 and the  potential threat of a sinle countr# and other +eaknesses.

16

6.0 7ecommendation' 6.+ Strategic 7ecommendation 6.+.+

Strong brand name 'he +ebsite of Alibaba is an inter"ediar# for" "ode, the Alibaba can use

the stron brand appeal, to in%ite the international bi brand products enterprises and Alibaba, +hich not onl# i"pro%e the sales of other   products, but also can i"pro%e the Alibaba$s re%enue and reputation.n recent #ears, the business "odel of 33 has not onl# de%eloped rapidl# in the +orld, but also raduall# for"ed a trend  eco""erce alliance  that is, the trend of "erers and cooperation, +hich +ill lead to increasinl# fierce co"petition. -uested that Alibaba$s search enine can support fu!!# search. 6lear  old, useless infor"ation to ensure the effecti%eness and a%ailabilit# of  infor"ation. Alibaba$s re%enue fro" ninet# percent do"estic, Alibaba should increase in%est"ent in the international "arket and publicit#. 6hinese products are uaranteed in ter"s of price and Fualit#, and "an# foreiners are interested in 6hinese products. 6.+.2

Skillful !orkforce Bollo+ up the strateic co"petiti%e ad%antae of skillful +orkforce, there

"a# be ood and bad, it is successful to be a eco""erce business and use to help Alibaba Group (AG) to be "ore better and i"pro%e"ent for" the  bads. 'hus, the reco""endation for this proble" is to check the supplier =s  profile correctl#. %er# AG +ill ha%e a supports %erification ser%es +hich to ensure the sellers are leall# reistered co"panies of representati%e of  AG. 3e sure that the suppliers profile infor"ation is correctl# leall# acco"plished b# AG. 'herefore, consu"er could also use the onsite check  and assessed supplier. nsite check is %erification processes +hich to confir" that the supplier  co"pan# pre"ises are checked b# Alibaba.co"= staff to ensure that onsite operation is eist in AG. Burther"ore, assessed supplier is define as the independent and i"partial thirdpart# %erification of #our prospecti%e 17

suppliers. 'his is to ensure the AG co""issions se%eral aencies is based on the international reputation and pro%en credibilit# to test the clai"s. Assessed suppliers +hich represent the assess"ent report, %ideos and Cerified Main >roducts. (Bake products of Alibaba, 01) @astl#, it could "ake sure that Alibaba can helps the user or consu"er to a%oid the fake  products and increase the skillful +orkforce on the ti"e. 6.+. #ec&nology ''ue Alibaba start to build up traditional business econo"# because the custo"ers ecos#ste" cannot be isolated fro" the participants. Alibaba=s de%elop"ent therefore "ust e"brace rapid chane accordin to our  e%ol%in en%iron"ent. Alibaba ro+th rise up in 6hina buildin "ore consu"er brands, +here a lot start bu#in and in%est "ore than epected. 3ut +hether or not Alibaba can be successful in the 7.-. shouldn$t +orr# in%estors, not #et at least, 2t doesn$t ha%e to be successful in the 7.-. an#ti"e soon because there is so "uch roo" for ro+th in 6hina,2 6ohen said. 2'he "arket potential in 6hina is still hu"onous and ro+in.2 6ohen said. After public co"pan# in 7- faced a lot challenin issues. ?hen the nternet +as scale up fro" 6hina enter lobal scene. Alibaba creates inno%ation le%el the pla#in field for s"all business and transfor"ation for social and econo"ic ro+th. 6.+.-

olitical i''ue Alibaba Group +ill continue to be the eco""erce co"pan# and the "ain

technolo# in 6hina, and on the +a# to beco"in one of the eco""erce  business and the "ost i"portant technolo# in the +orld. Alibaba Group should look for reater in%est"ent in o%erseas technolo# co"panies, suppl# chain infrastructure in 6hina and platfor"s to help forein co"panies of all si!es and for"s help the 6hinese consu"ers.  co""erce +ill continue to ro+ in all areas in 6hina and "obile technolo# easier. 'his can a%oid o%ern"ent proble"s in 6hina and keep the financial strenth of the co"pan#. 6.2 8u'tification of Strategy

18

6.2.+

ea'ibility 6.2.+.+ Alipay and 7egulatory 7i'k  Alipa# is part of the pa#"ent ser%ice in 6hina, Alibaba is used to

deal +ith "ost of the transactions on its +ebsite  it is rearded as Alibaba$s e3a# or >a#>al. Accordin to records, Alipa# deal +ith Alibaba$s business in 6hina, accountin for about 8D of all  pa#"ents  if the central bank to propose ne+ financial reulations, "a# be a proble". : 6'A'* Her14 ;l 1055 < 'he bank is proposin li"its on the si!e of pa#"ents on processors like Alipa#, to the tune of about L800. 'hat +ouldn=t be a proble", ecept a si!eable a"ount of the transactions Alibaba does are  businesstobusiness epenses, +hich often run into the thousands of dollars. n other +ords, if those rules o throuh, it could "ake it a lot harder for a bi part of Alibaba=s custo"er base to use it. : 6'A'* Her14 ;l 1055 < 6.2.+.2 9ncertain 7evenue Gro/t& ne of the "ost shockin parts of Alibaba=s financials is Iust ho+

fast its re%enues are ro+in for a "ultibilliondollar co"pan#. Bro" 010 to 015, for ea"ple, it re+ b# /00 percent, e%en thouh b# that point it +as alread# bookin sales in the billions. n%estors, then, are likel# to be epectin a certain a"ount of  upside +hen the# put their "one# into it P perhaps an unreasonable a"ount of upside. As Alibaba notes in its filin, the co"pan# doesn=t ha%e an# onoin aree"ents +ith its custo"ers that +ould lock in its ro+th. 'hat "eans "aintainin its re%enues at e%en the eistin le%el is not assured.: 6'A'* Gen1 ;l 1055 < n particular, Alibaba=s current ro+th has been fueled b# its ro+th in "ainland 6hina. nl# about 15 percent of its re%enue currentl# co"es fro" o%erseas, and ro+th in those sales has not kept pace +ith its do"estic re%enue ro+th P in the future 19

(Bro"01 to 019), o%erseas sales accounted for about 5/ percent of Alibaba=s business.: 6'A'* Her14 ;l 1055 <

Fiscal Year U.S. Dollar 9 8 7 6 5 4 3 2 1 0 2010

6.2.2

2013

2016

2018

2019

Acceptability t=s not all doo" and loo", ho+e%er. 6ruciall#, the li"it doesn=t affect

escro+ pa#"ents, and Alibaba does ha%e a +ellused escro+ business. As lon as it$s able to "o%e custo"ers o%er to its o+n escro+ business, Alibaba thinks it +ill still be able to collect the fees that "ake up "ost of  its inco"e. 3ut +ith all the "o%in pieces in%ol%ed in this, and the i"pact that e%en "odest increases in the difficult# of "akin a pa#"ent can ha%e on an eco""erce co"pan#=s botto" line, this is definitel# so"ethin that  potential in%estors should +atch closel#. Alibaba "a# be reachin a saturation point in 6hina (it=s said to account for so"ethin like L/ out of e%er# L4 spent on eco""erce in the 20

countr#), and recent econo"ic esti"ates suest that the 6hinese econo"# is slo+in do+n after #ears of sk#hih ro+th. 'hat "eans that its future ro+th "iht depend in lare part on its abilit# to ro+ that o%erseas re%enue nu"ber, so"ethin it=s not #et de"onstrated "uch abilit# to do. : 6'A'* Her14 ;l 1055 <

21

:.0 %onclu'ion and %on'e;uence'

n conclusion of the +hole assin"ent, accordin to the strateic reco""endation there are / +a# to conclude Alibaba Group(AG). Birstl#, stron brand na"e of AG can use to increase the stron brand appeal, and brins in the international bi brand products enterprises. AG can increase in%est"ent in the international "arket and publicit#. 'herefore, the skillful +orkforce +ill follo+ up to reco""endation custo"er proble"s to "ake a different chane. Bor ea"ple to check the supplier=s profile correctl# and onsite check and assessed suppliers. 'his +ould ha%e to %erification ser%es +hich to ensure the sellers are leall# reistered co"pan# of representati%e of  AG. Bollo+in is AG start to build up traditional business econo"# because the custo"ers ecos#ste" cannot be isolated fro" the participants. AG creates inno%ation le%el the pla#in field for s"all business and transfor"ation for social and econo"ic ro+th. -o, AG ro+th rise up in 6hina buildin "ore consu"er brands. @astl# is the political issue. AG +ill continue to be the e co""erce co"pan# and the "ain technolo# in 6hina. AG beco"e the "ost i"portant technolo# co"pan# and the best suppl# chain infrastructure in 6hina and platfor"s to help forein co"panies of all si!e and for"s help the 6hinese consu"ers. A could a%oid o%ern"ent  proble"s in 6hina and keep the financial strenth of the co"pan#. Burther"ore, there +ill be the Iustification of strate# +hich ha%e included feasibilit#, Alipa# and reulator# risk, uncertain re%enue ro+th, and acceptabilit#. Alipa# is a pa#"ent process ser%ices +hich +ill process about 8 percent of Alibaba pa#"ents in 6hina, it "iht be a  proble" if ne+ financial reulations proposed b# 6hina. t could "ake a lot harder for a bi part of Alibaba=s custo"er base. 'hus, the uncertain re%enue ro+th is Iust state that the re%enues are ro+in for a "ultibillion dollar co"pan#. Alibaba=s current ro+th has been fueled b# its ro+th in "ainland 6hina. 'he ro+th in those sales has not kept pace +ith its do"estic re%enue ro+th and international for about 5/ percent of Alibaba=s business. *et +ill be the acceptabilit#. 'he li"it doesn=t affect escro+ pa#"ents, and Alibaba does not ha%e a +ell used escro+ business. 3ut Alibaba +ill collect the fees and "o%in pieces in%ol%ed in this, and the i"pact that e%en "odest increase in the difficult# of "akin a pa#"ent can ha%e an eco""erce co"pan# botto" line. 'his sho+ the future ro+th "iht depend in lare part on its abilit# to ro+ .

22