Innovative Strategy of the Firm

This report analyzes the innovative strategy of Alipay, a leading payment platform in China. It discusses the innovational trend, strategy, capabilities, and organizational environment of the firm. The report also includes a SWOT analysis and recommendations for additional innovation capabilities.

Running Head: INNOVATIVE STRATEGY OF THE FIRM
Innovative strategy of the firm
Name of the Student
Name of the University
Author’s Note

1INNOVATIVE STRATEGY OF THE FIRM
Executive Summary
The chosen topic for the analysis of the report is Alipay. It is one of the leading payment
platforms within the region of China. It was within the early ear of the year of 2015 that the
business firm moved its headquarters within the region of the Pudong, Shanghai. However,
speaking about its parent company, it is still the Ant Financial remains Hangzhou-based. The
very sole purpose of conducting this report is to analyze the concerning business firm innovative
move.
On the other hand, there is a need to make use of innovational strategy to gain a competitive
advantage over the other rival business firms. Besides, what is the present innovational strategy
that the concerning business firm is making use of. The primary motive of conducting this very
report is to analyze the selected business firm regarding the innovational strategy, innovational
trend, innovational capabilities, and that of the organizational environment. However, within this
specific report the significance of innovation will be discussed and the innovational strategy that
ensures strategic alignment within the organizations. After that, the impact of selected
organizational trend upon the selected organization will be well discussed. However, a SWOT
analysis will also be undertaken to understand the pros and the cons that stay in favor of the
concerning business firm.

2INNOVATIVE STRATEGY OF THE FIRM
Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
Organizational environment:...........................................................................................................3
Innovational trend:.......................................................................................................................4
Innovational Strategy:..................................................................................................................5
Innovational Capabilities:............................................................................................................6
SWOT analysis of the organization:............................................................................................7
What additional innovation capabilities should the organization develop?..............................10
Conclusion.....................................................................................................................................11
References......................................................................................................................................12

3INNOVATIVE STRATEGY OF THE FIRM
Introduction
The selected innovational trend is "Design thinking (Liedtka, 2018; Liedtka & Ogilvie,
2011)". The chosen firm for the formulation of the report is Alipay. According to the official
website of Alipay (Intl.alipay.com, 2019), It was founded by Alibaba group in the year of 2004.
On the other hand, it was established by Hangzhou, within the region of China. It is a third party
payment app that is introduced by the Alibaba business firm. It is like an online payment wallet
system that enables a user to make transaction effectively without making payment by means of
internet banking or by means of any other payment method. Speaking about the founder of the
platform, the professional body is addressed as the “Jack Ma.” However, it is the early ear of the
year of 2015 that the business firm moved its headquarters within the region of the Pudong,
Shanghai. However, speaking about its parent company, it is still the Ant Financial remains
Hangzhou-based.
Discussion
Organizational environment:
It is managed by the Ant Financial body. They have about 500 million active users
within the region of China itself. Hence, we can have a pretty good idea that the new idea of an
online payment system is quiet favorable among Chinese citizens. Besides, the mobile wallet
service is already accepted by over 100,000 retailers in 70 different countries. This innovational
wallet system was introduced with the objective to allow the international boundary consumers
to buy or consume product offering from the region ofChina (Chin et al., 2017).

4INNOVATIVE STRATEGY OF THE FIRM
On the other contrary, the entire business continues by means of an online platform.
There is a back team that monitors and tracks the movement that takes splay within the payment
channel.
Innovational trend:
Its latest online platform release is of version 9.0. One of the strategic moves as
undertaken by the concerning firm was the use of the online platform. The use of the online
payment gateway system for the consumption of the commodities is one of the key factors
towards innovation move. The payment was secured such that the consumer feels great and
enjoyed the service. On the other hand, this payment system has been successful in capturing a
major proportion of the market share, special of the individuals who like to make payment within
the online system by means of wallet especially. It is the choice of the Chinese consumer to shift
the entire market within the online channel. It was found that the majority of the consumer
market like to make a sell and purchase activity by mean of the online platform (Zhu et al.,
2016).

5INNOVATIVE STRATEGY OF THE FIRM
Figure: consumption
Source: (Dragonsocial.net, 2019)
One of the innovational moves as undertaken by the concerning business firm is they are
forming a joint partnership with that of the Stripe; this financial body will help in penetrating the
foreign international market which is an innovational move as undertaken by the company. The
also made use of a number of the international move such that it was able to capture the interest
of the UK market as such that they struck a deal which allowed Alipay users to shop at 4 million
U.S. merchants.
Innovational Strategy:
This wallet system is directly linked with that of the social-network website; this means
that whenever a particular user like a particular commodity the individual can avail the desired
commodity at a single click. On the other hand, this wallet system maintains a logistics system
that enables a user to keep track of the flow of money. Besides, there is a maintenance body
where you can claim for the refund or make a dispute in case if any conflicts arise (Lu et al.,
2016). The other rival wallet payment business firm fails to make available this feature of
integrating the wallet with that of the social-network website. Thus, this helps the firm to gain a
competitive advantage over the other rival business firm by making use of an innovational
strategy.
Another innovational strategy is the use of barcode for undertaking transactions. This
barcode can be used to save as a picture which can be later used at some point of time in order to
proceed with the required transactions.

6INNOVATIVE STRATEGY OF THE FIRM
Figure: Blue ocean strategy of Alipay payment channel
Source: (Daxueconsulting.com, 2019)
Innovational Capabilities:
The transformation of Alipay into the one-stop-payment portal it is today can be seen as
an indicator for changing commerce in China. The online payment system makes use of the AI
platform. This ensures that the flow of activity will take place within the right path.
On the other hand, use of the AI field such as that of the data analysts and that of the data
scientist enables the concerning business firm to keep track of the movement 0f the subject such
that if any illegal activity takes place the GPS technology and the other technology platform can

7INNOVATIVE STRATEGY OF THE FIRM
be made use to track the illegal person. This has, on the other hand, enabled to gain the faith of
the consumer market. Besides, the use of the AI field enables the concerning firm to keep an eye
on the movement of the consumers this avails the firm to understand the consumer choice and
preferences. This will help in further improvement within the business process of Alipay (Zhong
et al., 2015).
Besides, upon having a thorough evaluation, it was found that brad makes use of the
promotional activity where they even earn by making attractive ad campaigns within the internet
pages and that of within the app store. Whenever an individual user clicks on the ad, the user gets
directed to the official page of Alipay. However, some amount of money is being directed to the
concerning brand whenever the user clicks on the ad.
Figure: Market share of Alipay within the region of Asia
Source: (Caixinglobal.com, 2019)

8INNOVATIVE STRATEGY OF THE FIRM
SWOT analysis of the organization:
STRENGTH - It has been successful in capturing the
major proportion of the market share.
On the other hand, the firm has been
able to make use of the online
platform for which the majority of the
consumer market relies upon this
payment platform as a seal f trust has
been formed.
- It provides a set of financial services
for the individual and the commercial
purpose,
- It has a strong base of social-network
presence.
- The use of the AI platform is being
undertaken; this AI platform ma use of
the AI based bots that interact with
that of the clients on a real-time basis.
WEAKNESS - The number of rival firms that are
offering online payment wallet
system. On the other hand, some of
them even have their competitive
advantage which the other rival firms

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fail to provide.
- It has a geographical barrier as such
that it is limited within the region of
the China itself.
- The payment settle period in case of
any dispute is generally composed of a
longer period of time.
- The introduction of a new business
firm may outdate the current
innovational strategy that is being
followed by the concerning business
firm Alipay.
OPPORTUNITIES - There lies a huge opportunity for the
firm as such that the concerning brand
has a presence of positive brand-
equity and that of the goodwill. This
will help the firm to penetrate within
the international boundary (Wu et al.,
2016).
- Alipay needs to strike more overseas
partnerships. This will help in gaining
a major proportion of international

10INNOVATIVE STRATEGY OF THE FIRM
consumers.
- The unique ability to get merge within
the user interface of digital devices
such as that of the smartphones and
tablets enables a user to make
payment at any point of time at any
place.
THREATS - The firm has a threat regarding the use
of technology as such that the present
technology may become outdated
within the near future because of the
introduction of some new segment of
technology.
- The other platform such as that of the
WeChat and that of PayPal, they make
use of the same kind of payment
platform. Hence, making use of the
innovational strategy by any of the
concerning firms will directly hamper
the ongoing business of the Alipay.
- The local government rules and
regulations may directly hamper the
well-being of the concerning business

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firm.
What additional innovation capabilities should the organization develop?
On the other contrary, there is a need to conduct a poll and survey session in order to
understand the consumer’s expectation from the concerning business firm. Understanding the
consumer desires and expectation from Alipay will help in taking the business firm to the next
step. Besides, the online payment system like that of the Alipay fails to operate on an
international scale; it is limited to the region of China itself. This barrier is to be eliminated as
there is huge scope within the international boundary. On the other hand, the Alipay wallet is to
be made available by means of POS machines such that the passer-by users who do not have
access to digital devices still can make use of the wallet system in order to carry out the payment.
This will be one of the strategic innovational moves that will be introduced by the concerning
firm as such that no other rival business firm has planned until now to introduced the POS
machines (Chang et al., 2015).

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Figure: Alipay mobile payment report, 2017
Source: (Tearsheet.co, 2019)
On the other hand, this wallet platform should make use of the reward point system in
terms of the digital coins. Such that this specific digital coins will be credited within the account
of the desired user which can be used later at some point of time to initiate the transactions. This
competitive advantage will help in gaining innovational gain over the other rival business firm.
As a result, much of the consumer will choose to proceed with that of the Alipay wallet instead
of any other rival business firm wallet.
Figure: Alipay mobile payment as per yearly basis
Source: (Tearsheet.co, 2019)

13INNOVATIVE STRATEGY OF THE FIRM
Conclusion
Thus, it is to be concluded there still lacks some of the innovational moves by the
concerning firm which can be overcome by making use of the above mentioned system. On the
other hand, the use of the above mentioned strategies will enable the concerning business firm to
formulate competitive advantage, and this will furthermore help in sustaining within the
consumer market for a longer period of time.
The use of the reward platform will help in attracting the major proportion of the market
share it will act as the pull concept of marketing. Furthermore, the concerning brand for at least
once should plan to make a number of efforts for penetrating within the international boundary.
Besides, setting up of POS machines at different locations of the region will not only help in the
promotional activity but will also help in increasing the number of potential consumers.

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