Alibaba's Innovative Business Model: A Project Analysis

This project analyzes Alibaba's business model, focusing on its innovative strategies and its impact on the e-commerce industry. The project examines Alibaba's activities and processes, highlighting how the company challenges traditional business practices and achieves organizational ambide...Read More

Introduction to the business we have chosen
 Alibaba – is a Chinese multinational e-commerce retail, internet and technology conglomerate
 Founded in 1999
 Provides sales services via web portals (ex: payment, shopping, cloud computing)
 The founder is Jack Ma
Introduction to a topic we have chosen for the business
 Innovation - is a production or adoption, assimilation, and exploitation of a value-added
novelty in economic and social spheres; renewal and enlargement of products, services, and
markets; development of new methods of production; and establishment of new management
systems. It is both a process and an outcome.’ – (Crossan & Apaydin, 2010)
Steps of our presentation
Question 1
 Business model on innovation (activities and processes)
 Argument: new way of creating and delivering goods and services, buy and sellers
relationship- buying online, 4 dimensions of challenging orthodoxy
 CA: orthodoxy and ambidexterityTo what extent and in which ways do the company’s activities and processes reflect
important themes and issues relating to your chosen topic? Give (critical) consideration
to whether and how these can be explained by available frameworks and concepts
Alibaba's activities and processes reflect important themes and issues regarding innovation to a
large extent. Alibaba first launched as a business to business model connecting manufacturers in
China to overseas buyers. In 2003 building upon it's success, Alibaba founded Taobao an online
customer to customer market place. It's unique business model is based upon providing an
online service platform to individuals and merchants. Taobao's business model created a new
market where small firms and individuals can sell their goods in a competitive manner manages
to achieve radical innovation due to the large impact it had on the way in which goods can be
sold and bought. At the same time, Alibaba manages to achieve incremental innovation by
implementing integrated services in their existing platforms. Shortly after launching Taobao
Alibaba implemented "Aliwangwang" a web messenger that allowed consumers to have direct
conversations with sellers and "Alipay" an integrated payment system similar to PayPal. These
integrated services improved upon the service provided to merchants and consumers. Alibaba

pursues both explorative and exploitative innovation and manages to achieve organizational
ambidexterity by not only focusing on its main e-commerce platforms but also by putting
emphasis on the integrated services they provide. Alibaba challenged the traditional way in
which goods are sold and bought. It created e-commerce eco system by focusing on various
aspects of e-commerce and is a form of business model innovation.
Question 2
 Orthodoxy Alibaba doesn’t only concentrate on one key aspect and prefect in e-commerce
however, it focuses on the e-commernce ecosystem which can be seen as a new business
model having complete dominance of what can be seen as the online retail world
 `explain these activities
Organizational ambidexterity: the combination of exploitation and exploration
Exploitation is reusing existing knowledge associated with activities such as efficiency,
selection, refinement, and implementation (book2).
Exploration is learning that is obtained from the processes of concentrated differences,
organized experimentation, and discovery(book2).
Incremental innovation - Exploitation
• Radical innovation -Exploration
• Ambidexterity –is the process ability to simultaneously pursue both incremental
and radical innovation
Structural solutions//Alibaba’s business plan is to manage the whole e-commerce ecosystem
rather than mastering one section in e-commerce.
 Alibaba the main business business to business
 Taobao consumer to consumer
 Alipay like paypal
 Tmall business to consumer
 Aliwangwang social networking
 Alimama online marketing platform that helps sellers on Alibaba
 Diverse selection of apps such as Alitrip ans Weibo
 Alibaba pictures movie production
Contextual solution//process
Synergy between the multiple platforms Alibaba owns can be credited for one of the main
reasons of alibaba success and dominance in the online world

 They use a two sided business model were they link their multuiple services to
increase users use. For instance, for Singles day which is the equivalent of black
Friday and cyber monday however even larger they include huge discounts that are
offered by alibaba’s retailers however using Alipay another service of Alibabas
 Alibaba offers a wide range of individual services that coordinate and control the
whole customer experience
 Alibaba doesn’t only concentrate on one key aspect and prefect in e-commerce however, it
focuses on the e-commernce ecosystem which can be seen as a new business model having
complete dominance of what can be seen as the online retail world
 Challenge Orthodoxy
 2. Analogical thinking: using insights from other contexts
 Design thinking: Drawing insights from unarticulated user needs
 Scenario building: Using insights from the future
Background information
Much like Google came from nowhere to lead through
customer-focused innovation, Alibaba did the same in
China, toppling established players such as eBay.
Unlike other categories such as search and social
media, foreign ecommerce competitors were not
blocked by the Government – meaning it was
innovation
https://www.forbes.com/sites/tannermark/2017/09/27/
alibaba-china-google/#72f455547e3e
"Being innovative means you look at today from a viewpoint of tomorrow. We
need to look at today's China from a viewpoint of the world, and look at ourselves
from the viewpoint of those outside this industry. When you think this way, you
will do things in a different way," Ma noted.
http://www.chinadaily.com.cn/business/2017-09/18/content_32147328.htm

Conclusion
The business world is changing, and this is exposing businesses to more opportunities. As the
business world evolves, the society evolves too, and this requires technological innovations to
exploit the potential opportunities in the market. The e-commerce industry has many players, and
this creates a competitive business environment that requires intensive technological innovations
for a company to thrive. Alibaba's technology innovations drive the company's e-commerce
business. Alibaba owns multiple platforms that create synergy, and this is the main reason behind its
dominance and success in the online business world. The company's powerful computing network
positions Alibaba to a more competitive technological innovation, and this is based on its unique
artificial intelligence. Alibaba continues to succeed and gains a broader customer base in China and
other global markets where it has formed partnerships with enterprises operating in different
industries such as the Chinese banks. Integration with other e-commerce companies enables Alibaba
to reach their target audience sufficiently. Technological innovations have positioned Alibaba to a
higher bar that requires advanced artificial intelligence by other e-commerce companies to compete
Alibaba. Innovations by the company have solved customers problems faced when buying online,
and this has built the company as a brand whose reputation's loyalty keeps growing each day.
Sabina's notes in relation to 1st question:
 Online system Alipay ( formed partnerships with leading Chinese banks and signed a long term
agreement with China Post
 In 2007 it set up Alisoft.com --> could buy customised software from independent vendors
 Integrated with Alimama.com --> post ads to reach their target audience
 Taobao provided services and solved problems for the smaller businesses that are the driving
force behind China’s economic boom
 Taobao set up or integrated services that complemented each other and used this ecosystem
to create a bar to competition.
 Taobao identified how to help people buy and sell. By making online shopping easy, safe and
fun it helped many first-time online buyers build confidence in e-commerce.