Understanding Alibaba's Business Prowess Essay

Length: 5 pages Sources: 5 Subject: Business Type: Essay Paper: #74996347 Related Topics: Business English, B2b, Firewalls, Ecommerce
Excerpt from Essay :

Alibaba group of companies is a Chinese-based online company that specializes in providing online business services to the customers and businesses. One Mr. Jack Ma, a Chinese entrepreneur, started it. So far, the company has managed to spread its wings and covered other places outside China. Reasonably, it has managed to gain public acceptance all over the world. This paper discusses the concepts of formation as well as corporate governance, success determinants, among other factors of development in the company. In this regard, the company has managed to ensure that it stays ahead of the rest in the highly volatile online platforms (Anonymous, 2014).

The business service served

Alibaba Company engages in three major business services. One of the branches of the company is the one named as Alibaba.com written and launched in English. It facilitates trade between importers and exporters in more than 240 countries. The company does the business of linking the major exporters and importers from English-speaking countries around the world. It also ensures compliance of the import and export activities within the online business platform as well as making sure that the desires of both buyers and sellers converge at this point. Other functions that this service, Alibaba.com is specialized to do include ensuring that there is compliance between all the stakeholders in the trade on the regulations governing the online trade. In this sense, there are limited chances of exploitation or defaulting since the guidelines set for the smooth running of the organization are clear (Scott, 2013).

The second branch of the company is what is referred to as portal 1688.com. This one specializes in the Chinese markets only. It was created in order to facilitate local business-to-business transactions. It also serves the purpose of ensuring that there is compliance within the trade happening on the local platform. In other words, this branch was formed with the aim of ensuring that sufficient measures existed to ensure that the level of trade done locally achieved optimal levels of success. This would be attained when little losses are encountered from the possible operational inefficiencies. Compared to the kind of business that happens locally and in the physical market, the online option as given by this option of the portal 1688.com has by far leveled the playing ground for local business. There are little options left for exploiters to play a role in infiltrating the market since the online platform ensures that no wastages from any form of inefficiency are witnessed. Other than leveling the playing ground, this trading platform has also if there are little chances for government interference in the trade, which has long been an issue in the physical market.

The final service that the company engages is under its branch referred to as Aliexpress.com. This branch of the business enables the small buyers to make purchases of small commodities on a wholesale basis. It also allows the small customers to reap the same benefits as would have been reaped in an ordinary market. Other services from this branch involve the creation of an avenue where limited chances of exploiting the small traders are minimized (Scott, 2013).

Alibaba' success

Alibaba has succeeded in its business endeavors courtesy of various approaches it has employed in its operations. One such success strategy is with proper awareness creation. The brand of the Alibaba is known all over the world to major traders and to major businesses. This has come courtesy of the fact that the management has always ensured that its services are well-known in virtually all corners of the corporate world. Business processes have been supported in the best of ways possible. Ideally, Alibaba has acquired a real name as well as getting referrals from those who once is good business with it (Thomas, 2010). There have been other cases where the company has received publicity from the endorsements of prominent companies as well as respectable business personalities known to many. This also has contributed to the company's promotion, which is the reason behind the trail of success that has been witnessed so far (Anonymous, 2014).

The general manager, Mr. Jack Ma also has put in an invaluable breath into the life of the company. This man has the zeal and energy sufficient to push the company's agenda forth. One of the inputs that Mr. Ma has brought to the enterprise is the appropriateness of the use of customer relations as well as application of good marketing skills. In this regard, the company management has prioritized the free way of expressing their desires to the company management (Thomas, 2010).

The company value proposition and marketing strategy

The expression of value is centered on creating a name that can sell itself in the market. This is done through various branding techniques meant to create a good name of the company besides bringing out a sound management exercise with all the minimum policy measures of success. One such management policy that has been applied in the creation of value in the company is the use of proactive measures of approaching the issue of customer needs. During the course of doing business through these three platforms offered by the corporation, there are matters that arise at times (Ginty and Vaccarello, 2012). Such issues as the lack of privacy measures that might come when the system turns chaotic or the slow process of servicing the transactions are what contribute to the issue of lack of efficiency. While seeking to avert undesirable effects of the inefficiency, the company has formulated and instituted various measures to respond to them. Sufficient firewalls have been developed to assist in safeguarding the stability of the company profile from the possible threats of saboteurs (Scott, 2013).

Alibaba Group of Companies has adopted a marketing strategy that involves the use of interrelated networks and actions well coordinated to achieve the desired purpose. For instance, the company manages to stay afloat by selling its name through the other avenues of media other than the online media. Advertisements are made using print and electronic media as a compliment to the online media. One other marketing strategy is by use of endorsements as well as the company participation in corporate social responsibility. Both actions cast the company in good social limelight and by extension assists in the overall marketing agenda (Thomas, 2010).

Corporate governance

Corporate governance relates to how a company is managed right from the top down the hierarchy (Monks, 2014). At Alibaba, the business is arranged and organized in such a manner that there are top-level ranks as well as the lower level classes. The coordination of the activities in this business model is such that there are no frictions that occur from the same. Corporate governance also involves the principles and the paradigms that guide the company in its path towards attaining success. The following aspects of the corporate governance are discussed (Ginty and Vaccarello, 2012).

The legal structure

At Alibaba, the shareholding is a very tricky issue. It is common practice in all organizations that those owning shares or stakes in the company hold it. At Alibaba, there is no case where shareholders are given the chance own the company as it should be. It is an issue of having a share, and it ends there. The only advantage that comes to the shareholders is that they will have a voting right and a chance to reap the benefits that come from accrued yields from the business. This, however, is an undoing to the company. It will not be an easy thing maintaining the members following and as well as keep them loyal for long (Bogle, 2011). It is a discouragement to prospective investors, as they will not see the need to invest their money in the company. Other companies with a chance to own a stake in the company will easily convince the investors to shift to their side (Monks, 2014).

Possibility of entering new markets

For Alibaba to enter the new markets in the U.S.A. Or Europe, it has to ensure that it has better offering than it has now. In the present moment, the company does not have a good chance of outdoing the already existing big businesses of this nature in the sector. Therefore, they can easily lose currency once they enter into a competitive market. In the present market status in Europe and the U.S.A., there are better and well-funded online e-commerce companies running. It will be hard for the company to have to deal with the big market players with its current financial and strategic approaches (Ginty and Vaccarello, 2012).

References

Anonymous. Business: China's king of e-commerce; Alibaba. Report Information from ProQuest November 18, 2014 16:48

Anonymous. The Alibaba phenomenon; E-commerce in China. Report Information from ProQuest November 18, 2014 16:50

Bogle, John C. The Little Book of Common Sense Investing the…

Sources Used in Documents:

References

Anonymous. Business: China's king of e-commerce; Alibaba. Report Information from ProQuest November 18, 2014 16:48

Anonymous. The Alibaba phenomenon; E-commerce in China. Report Information from ProQuest November 18, 2014 16:50

Bogle, John C. The Little Book of Common Sense Investing the Only Way to Guarantee Your Fair Share of Market Returns. Hoboken, N.J.: John Wiley & Sons, 2011. Print.

Ginty, Maura, and Vaccarello Lauren. Complete B2B Online Marketing. Hoboken, N.J.: J. Wiley & Sons, 2012. Print


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