Business Innovation and Sustainable Business Development of Alipay

This report analyzes the business innovation and sustainable business development of Alipay, the second largest third-party online payment platform in China. It explores the impact of artificial intelligence on Alipay's innovative strategy and recommends ways to ensure strategic alignment with the organization.

Running head: BUSINESS INNOVATION AND SUSTAINABLE BUSINESS
DEVELOPMENT OF ALIPAY
Business Innovation and sustainable business development of Alipay
Name of the University:
Name of the Student:
Authors Note:

1BUSINESS INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT OF ALIPAY
Executive Summary
Alipay is one of the second largest third-party online payment platform situated in China which
operates with no transaction fees. The report revealed that with an opportunistic along with
constructive business environment, Alipay can make a positive approach in the direction of
identified innovation trends that can be implemented by the company in the form of its
innovative strategy. Artificial Intelligence is one of the most innovative concepts which have
revolutionaries the technology based businesses, particularly in Alipay. The online payment
based company can ensure that the strategic alignment can deal with innovative trend associated
with Artificial Intelligence through ascertaining that every function that is followed in Alipay are
in terms of business goals understanding and technology.

2BUSINESS INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT OF ALIPAY
Table of Contents
1. Introduction..................................................................................................................................3
2. Discussion....................................................................................................................................3
2.1. Company Introduction and Selected Innovation Trend........................................................3
2.2. Innovation Concepts and Interrelationships in Alipay.........................................................4
2.3. Innovation Strategy Creation Ensuring Strategic Alignment with Organizations................7
2.4. Impact of Innovation Trend “Artificial Intelligence” on Alipay..........................................7
2.5. Recommendation on Ensuring Strategic Alignment for Addressing Innovation Trend.......9
3. Conclusion.................................................................................................................................11
References......................................................................................................................................12

3BUSINESS INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT OF ALIPAY
1. Introduction
Innovation initiatives in a company are driven by innovation strategy that is deemed to be
a subset of a company’s overall strategy. Innovation strategies explain future development of a
company’s innovation abilities along with deciding future direction of innovation activities based
on trends (Jia et al. 2018). For this reason, companies consider diagnosing certain circumstances
encompassing innovation trends in informing the innovation strategy design and development for
attaining competitive edge. The objective of the report is to analyse the case of Alipay “an online
payment platform” based in China in establishing the link between business environment,
business innovation strategy, business capabilities and value creation.
2. Discussion
2.1. Company Introduction and Selected Innovation Trend
Alipay is one of the second largest third-party online payment platform situated in China
which operates with no transaction fees. The company was initially launched in China in the year
2004 by Alibaba Group. As per the market research report, this company has the largest market
share in China having 300 million users that has control of around half of China’s online
payment sector (Alibaba., 2019). The organization offers account transfer, payment, repayment,
small amount loans, money management along with certain other services. Alipay business
operations are focused on deducting the payment from the buyers account within real-time and
also considers collecting money from shoppers to purchase foreign currency along with that
consumers are also offered with real tome payment solution. The products and services offered

4BUSINESS INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT OF ALIPAY
by the company are cross-border website and mobile payment along with auto-dent service and
Alipay epass.
The innovation trend that is observed to be followed by Alipay in attaining strategic
competitive advantages is “Design Thinking” through Artificial Intelligence. Such innovation
strategy is selected by Alipay as design thinking strategy provides a structured framework for
realizing along with perusing innovation in manners which contribute to company’s growth
along with adding value to the consumers (Fasnacht, 2018). The design thinking innovation
cycle in Alipay is deemed to involve an observation for revealing unaddressed needs in the stated
context along with constraints of a specific situation. Design thinking innovation is referred as
cognitive, strategic and practical processes through which design concepts are developed by the
design teams of Alipay in attaining business growth and competitive edge.
Innovative Strategy Implemented at Alipay
Alipay is an online payment based organization that has always attempted to maintain
innovative technology in offering value to its target consumers that can be revealed in its
management approach, organizational culture and strategic marketing model. In attracting
increased young consumers Alipay has launched innovations such as facial recognition
technology termed as “Smile and Pay” in verifying the identity of its users and complete
transactions (Zeng, 2018). Such innovative technology employs 3D camera for scanning
consumer’s face as an identity to conduct transactions. Such technology has created value for its
target audiences within dynamic market setting.

5BUSINESS INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT OF ALIPAY
2.2. Innovation Concepts and Interrelationships in Alipay
The organizational environment of a company such as Alipay.Com has a vital role in
consideration to the type of approach hat is ensured in context to any type of innovation trend
that is “artificial intelligence”. With an opportunistic along with constructive business
environment, Alipay can make a positive approach in the direction of identified innovation
trends that can be implemented by the company in the form of its innovative strategy. An agile
business surrounding is considered to have a capability of effectively adapting to changes devoid
of facing any issue (Fabre, 2018). The company is able to develop its innovative abilities or
develop improvisations within its innovative payment functions to attain the advantages of an
effective innovation strategy. The inclusion of innovative strategy within Alipay is only
considered to be possible in case the business environment of the company Bourne some
innovative capabilities. A failure in ensuring same can lead to inability to develop innovative
vale creation among its key consumers. For this reason, in ensuring an innovation value capture
it is vital that the organizational environment of Alipay is aligned with the recent innovation
trends (Cambini & Faccini, 2018). Moreover, relied on such situation an innovation strategy for
Alipay is developed that basically indicates the company along with the type of innovative
capabilities present by the company is necessary. This is important in developing systematic
processes that Alipay would be capable to create in adding innovative value in its products and
services.
Innovative Capabilities of Alipay
The innovative capabilities can be explained as the capabilities set such as the technology
development, operational, management and transaction capabilities. Over years, Alipay has
developed its innovative capabilities for developing exceptional offerings set that is technology

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based. The major innovation skills encompass the expertise manpower. Research and
development department along with innovative leadership model are also the strategic innovation
asked capabilities of Alipay (Zhang & Xie, 2018).
Figure 1: Organization Capabilities of Alipay
(Source: Cheng, 2019)
Innovation Value Chain
The primary along with support activities of Alipay is focused around innovation and
considering that the company has developed its strong supply chain. Based on its strong value
chain innovations, Alipay has attained more than 3 million efficient QR code merchants that
have considered employing AI powered mobile application offering (Zayed, 2017). This tool
employs AU to evaluate business outstanding invoices in determining the borrowing needs along
with block chain in authenticating the invoices along with loan application data securing.

7BUSINESS INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT OF ALIPAY
Moreover Alipay employs creative marketing strategies for attaining competitive edge along
with offering after-sales services for assisting consumers at the time of interacting with the
brand.
The support activities of Alipay has an important function as its technology model
centres on offering exceptional quality and innovative payment options and services to
consumers (Chen & Yin, 2019). The human resources also make efficient use of expertise and
skills for creative firm and consumer value. Procurement is a vital option which ensures that an
organization has a good supplier relationship. Infrastructure of the company has transformed
over years that has supported Alipay to adapt within innovative business environment.
2.3. Innovation Strategy Creation Ensuring Strategic Alignment with Organizations
For innovative business undertakings like Alipay, the innovative strategy is considered as
an important part of its strategic business model. In the current era, no organizational strategic
model can be developed devoid of an exceptional innovative perspective that is greatly observed
in case of Alipay as the company totally relies on innovation for generating exceptional offerings
within a dynamic and competitive market surrounding (Chen, Yin & Mei, 2018). In Alipay,
generation of an innovative strategy entertains that there is a strategic alignment in the company
as it entertains that the innovative aspects are integrated in distinct aspects of the company
encompassing the organizational culture, leadership approach along with the organizational
outlook. Focusing on the case of Alipay it is gathered that there is a dynamic relation between
the variables such as innovation and business strategy. Alipay has been able to redevelop its
innovative model and modernize its business operations because of its robust relationship that
aligns both of the elements (Fasnacht, 2018).

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2.4. Impact of Innovation Trend “Artificial Intelligence” on Alipay
Artificial Intelligence is one of the most innovative concepts which have revolutionaries
the technology based businesses, particularly in Alipay. Even though the online payment
company has considered staying ahead in the innovative setting, its exposure within the
innovative model is limited. The innovative assignment of implementing Artificial Intelligence
has persuaded Alipay to work towards designing along with providing AI solutions within the
market which can totally transform interaction along with communication that is present in the
current era (Chen & Mei, 2018). In order to be competitive within the dynamic technology based
business surrounding, Alipay brand has developed the building blocks that have the capability to
decrease the work processes which includes manual activity the can increase certain automated
processes which is carried out in the organizational context.
SWOT Analysis
The SWOT analytical framework is employed as a major strategic tool for analyzing the
strengths, weaknesses, threats and opportunities of Alipay Company’s business concerns.
 Strengths: Certain key strengths that has facilitated Alipay in employing the innovative
Artificial Intelligence technology includes wide technological infrastructure, exceptional
ability of the marketer in developing and designing its core business aspects which is
focused on innovation, reputed brand name along with loyal base of consumers
(Riasanow et al. 2018).
 Weaknesses: The key weakness of Alipay can be the limited degree of experience
associated with the Artificial Intelligence concepts. This can decrease the ability of the
company to exploit the dynamic market setting.

9BUSINESS INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT OF ALIPAY
 Opportunities: Implementation of AI technology serves as an innovative technology that
can serve as the main pathway in generating uniqueness and innovative offerings which
might be of unimaginable value for the target consumers. It can also decrease the human
factors along with strengthening the new business concept effectiveness (Cambini, Giusti,
& Faccini, 2018).
 Threats: The major threat that takes place before Alipay associated with the uncertainty
that exist in the Artificial Intelligence setting. This is totally unexplored territory which
can result in causing complex challenges for the business undertaking in the recent era.
2.5. Recommendation on Ensuring Strategic Alignment for Addressing Innovation Trend
Recommendation to Respond to Innovative Trend
Alipay is recommended to organize an innovative model in a methodological way so that
there is increased scope to develop the Artificial Intelligence model. For creating exceptional AI
offering within the market setting, the leaders and the innovators role is highly important. They
can serve an active function to offer scope to human factors for including the AI innovation in
several aspects of the company. For supporting the innovation brought in by AI initiative, Alipay
must focus on developing innovative approaches through strengthening the machine learning
mode in a way it can suppose the computer-aligned robotic model.
The online payment platform must also consider taking into account the important factors
associated with security and cloud supercomputing in a way that the innovative initiatives is in
synchronization with the business concept of AI. Alipay can also make sure that it is capable to
generate and capture value through using innovation approach on a regular basis considering
technological advancement along with related changes which can take place within dynamic

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along with uncertain technological environment. This innovative imitative can also facilitate
Alipay to effectively implement AI that is considered as future of digital frontier.
Recommendation for Strategic Alignment
The innovation trend of AI is deemed to be most powerful in the current years that have
the capability to totally transform and revolutionaries’ technology and innovation within Alipay.
The online payment based company can also ensure that the strategic alignment can deal with
innovative trend associated with Artificial Intelligence through ascertaining that every function
that is followed in Alipay are in terms of business goals understanding and technology. As the
company employs innovation as important element in all the organizational levels, it can centre
on real-time learning within the company’s context. This can further associate the overall
innovation learning and AI technology concept. Alipay can implement the concept of AI through
attempting to mature in a digital sense.
Figure 1: AI based Strategic Alignment
(Source: Hong, Lu & Zheng, 2017)

11BUSINESS INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT OF ALIPAY
In ensuring that business strategy followed by Alipay is aligned with AI technology it
must consider developing its digital business model through modernizing its technological assets,
use of innovative aspects within business undertaking along with effective development of
expertise and skill of labour. The business must also consider developing its value chain
particularly for the AI model that is aligned with smarter R&D model, optimized maintenance
and production initiatives enhanced sales along with marketing with improved user experience.
This holistic innovation approach is deemed to play an important function for ensuring that
technology based business undertaking might exploit the AI trend along with making name for
itself.
3. Conclusion
The objective of the report was to analyse the case of Alipay “an online payment
platform” based in China in establishing the link between business environment, business
innovation strategy, business capabilities and value creation. It was gathered from the report that
the organizational environment of a company such as Alipay.Com has a vital role in
consideration to the type of approach hat is ensured in context to any type of innovation trend
that is “artificial intelligence”. Considering same, Alipay can make sure that it is capable to
generate and capture value through using innovation approach on a regular basis considering
technological advancement along with related changes which can take place within dynamic
along with uncertain technological environment.

12BUSINESS INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT OF ALIPAY
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