Alibaba Group: Enterprise & Innovation Report - [Course Name]

This report provides a comprehensive analysis of the Alibaba Group, a leading e-commerce conglomerate. It delves into Alibaba's strategic statement, examining its business model, expansion into international markets, and its e-commerce operations. The report highlights the role of strategic leadership and organizational culture, focusing on the leadership style of Jack Ma and its impact on the company's success. Furthermore, it analyzes the external environment using PESTLE and Porter's Five Forces frameworks to understand the opportunities, threats, and competitive landscape Alibaba faces. The report concludes with an assessment of Alibaba's strengths, weaknesses, and future prospects, offering insights into its strategic positioning and potential for continued growth. It also discusses the three horizons of growth for the firm, including extending core businesses, building emerging businesses and creating viable options. The report also explores the impact of innovation and investment on Alibaba's leading position in the market.

Enterprise & Innovation

TABLE OF CONTENTS
1. INTRODUCTION.......................................................................................................................3
1) STRATEGIC STATEMENT OF ALIBABA.............................................................................3
2) THE ROLE OF STRATEGIC LEADERSHIP AND CULTURE IN ENTERPRISE................6
3) ENVIRONMENT .......................................................................................................................8
4. CONCLUSION............................................................................................................................9
REFERENCES..............................................................................................................................11
Appendix 1 .....................................................................................................................13
Appendix 2 .....................................................................................................................13
Appendix 3 .....................................................................................................................15

1. INTRODUCTION
In current scenario, competition has been increased in the market. With unstable
market conditions and regular changes, it has become necessary for enterprises to
make essential modification so that they could find stability in this occurrence.
Innovation is one of the best ways through which firm can improve its performance. It is
also quite effective in gaining competitive advantage in the market. In this report has
been taken into consideration. It is an e-commerce conglomerate that is providing their
sales services via web portal. Along with this, company is also providing electronic
payment service, shopping search engine and cloud computing work. The report will
analyse different approaches of enterprise in context of Alibaba group. Along with this, it
will also analyse the impact international market and external environment has on the
various operation of an entity. Role of strategic leadership in the development of
enterprise is also discussed here.
1) STRATEGIC STATEMENT OF ALIBABA
Alibaba is a Chinese e-commerce conglomerate that provides their services in
various sectors of nation. The company own its existence for 18 years. The firm was
established in 1999 by Jack Ma and Peng Lei. It was a small firm that found the website
called Alibaba.com, a business to business portal, so that they can connect with their
oversea buyers. The firm is regularly progressing and developing in the current time
the firm has already expanded their business to such a extent that it also included the
transaction between business to business sales services but also consumer to
consumer, and business to consumer too. Along with this, firm is also indulged in the
business of search engine and cloud computing services. Alibaba has already opened
its wing in international market and is currently operating their business in various
countries. It is a leading e commerce platform in south-east Asia. Also, it provides
services in Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam. Further,
firm also has its branches in Brazil, India, Mexico, Russia, Saudi Arabia, South Africa,
turkey, UK, etc. (Analyze of the Marketing Strategy of Alibaba in China 2016).
Alibaba is one of the most valuable organisations in the world. In 2016, it has
become one of the leading retailer companies surpassing big firms like Walmart. It has
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also become the largest internet companies as its online sales and profit have already
beaten the profit and score of amazon, eBay and Walmart. The net income of firm was
recorded US$6.2 billion in 2017.
Strategic planning in simple words can be defined as formulation and
implementation of various plans so that goals and objective of firm can be achieved.
This strategic management helps organisation in analysing their existing strategy and
making necessary changes. It is the strategic planning that is the major reason behind
success of Alibaba. It provides the platform to merchant who want to sell their products
in exchange they provides firm with partnership (Tan, 2016).
One of the biggest strategies that firm has adopted in their working is profit
sharing which was able to assist company in establishing their business in various
countries and finding stability as well as success in new market. In addition to this, firm
also ensures that it has good relationship with the government of nation as it plays the
major role in economy of China. By creating a large network, it can have many benefits
such as high number of traders (Liu, Ren and Zhang, 2015). Maintaining good
relationship with government helps the firm in running their various business operations
freely.
Other than this, the firm focus for the success lies on the strategy of market
segmentation, it carries out proper market analysis so that best strategies can be used
Alibaba has always paid attention to the needs, demand and trends of market as well as
made necessary changes so that they can maintain their stability in market. The firm
has always used price marketing mix as one of their leading strategies (Xiaohan Zang.
2015). With growth in internet, they provide people with cheap products so that they can
attract their attention towards the firm. They attract potential clients with free
membership and later, they start charging (Wong, 2015).
In the current scenario, they are offering their customers value added services
along with the competitive price for its product than competitors. They also offer their
customers with gifts and additional services so that they can remain loyal towards the
firm. E The lack of innovation and investment can cost firm its leading position. The firm
is receiving aggressive competition from its rival firm JD.com who has adopted the
latest technology in their working leading to high profit. In 2015, the domestic growth of
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firm was twice that of Alibaba. Though JD is still a small firm, but if the firm does not
make necessary changes in their working, it will cost the firm it positions in market. It is
essential for the firm to tighten its rope in the market so that they can perform well.
Three horizon
Horizon 1: extend and defend core businesses
The Alibaba has many opportunities that can support the firm in its long term
success. Globalization strategy of the firm is very strong, this has supported in rapid
growth in Russia and Brazil. Sales of the company is increasing per year it shows that it
is providing satisfactory good to its valuable consumers. Its goal is to improve profit and
make its financial background more strong.
Horizon 2: build emerging businesses
It is another horizon of the firm, Alibaba is expanding its business across the
world. It has supported in building emerging business (Chen, 2016).
Horizon 3: create viable options
In this respect Alibaba is introducing new revenues lines for that it has made
upfront investment. These viable options have given chance to grow well.
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Illustration 1: Three horizon
Source: (McKinsey’s Three Horizons of Growth Can Help You to Innovate, 2017)
2) THE ROLE OF STRATEGIC LEADERSHIP AND CULTURE IN
ENTERPRISE
Jack Ma is the pillar behind the grand success of the Alibaba group his great
leadership and innovative idea has make it possible for the organisation to become one
of the leading firm in whole world. Jack Ma has adopted various approaches in his
leadership that has helped him in directing the effort of various employee in right
direction so that goals and objectives of firm could be achieved (Huang, Hu and Lu,
2016). Transformational and team leadership style that has been adopted by Jack Ma,
He makes sure that he involve each employee in important decision of firm so that
performance can be enhanced. He gives its employee a freedom and chance to present
their views so that they can come up with the best innovative idea that can help
business entity in gaining competitive advantage in market.
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Jack Ma has great foresight which help him in directing their workers. Jack Ma
make sure that he can hire only those employees who have great skills or potential to
improve. He ensures that training and development programmes are provided to them
so that they could perform well. Another things which make Jack Ma a successful leader
is that he was his ability to take risk and taking responsibility for the various decision
(Sundaramurthy, 2015). The term failure was exchange with term I give up. Jack Ma
continuously support their staff so that they can perform well even in the difficult
condition. He makes sure that he keep open mind to the view of employee so that best
way can be selected to handle various problems. He invests in the future generation of
nation as he knows that they have very high potential. Accepting the criticism and make
necessary changes for the continuous development has helped them in finding stability
in changing market. Culture impacts on the business activities. If organizational culture
is not healthy then entity will not be able to retain its skilled employees in the workplace
for longer duration. Culture of Jack Ma is good they provide good support to employees
so that they can perform better (Xue and Xu, 2017).
Approaches
Transformational leadership is the approach that is useful in different
situations. These leaders have high emotional intelligence. They encourage employees
by sharing vision of the company.
Blake & Motion
Blake & Motion managerial grid was came into existence in the year 1964.
It has explained the most appropriate styles that can be implemented by leader .
Impoverished management: These managers have low dimensions and they put
minimum efforts to work with their subordinates effectively.
Task management: It is also known as perish style, in this leaders pay more attention
on production. They do not concern about people. Stick policies are implemented which
increase employee turnover rate.
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Middle-of-the-road: It is another leadership style in which leaders try to maintain
equilibrium between goal and people. They do not push people in order to meet with the
objectives.
Country club: It is based on low task and high people orientation. In this leaders pay
more attention on employees and behave friendly with them.
Team management: It concentrates more on high people and task. In this leaders gives
power to employees and trust on them so that they can perform their duties well.
3) ENVIRONMENT
Summary of Pestle
Alibaba is global firm providing its services to many of the countries all over the
world. In current time the firm is planning to establish their market in US which is one of
the largest economy in the world with great market. It is necessary for entity to pay
attention to various law that nation has implement so that it can stay away from any
legal hassle and carry out its function efficiently. The economy of china has been
continuously growing (Alibaba Group environmental analysis. 2016). There has been
major shift in the e-commerce among small and medium enterprise which has shown
positive sign for the Alibaba group. The current economic condition in international
market is also stable. It is essential for business to adopt the social environment in order
to survive in market. It generally focuses on the demand and needs of people which
keep changing from time to time. There has been major change in the shopping style of
people in china, they had turned to the online shopping that has helped Alibaba in
making people aware of their services and products. It also necessary of Alibaba to
understand the culture of various nation and their needs and demand so that they can
provide their services in the best possible way which can satisfy their customer. Their
Business to business venture is one of their unique investment in technology that has
helped them in securing their place in international market. Alibaba has to pay attention
to these changes before they venture in any new business. Each country has their own
environmental and liability law that everyone must follow. Alibaba should carefully
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evaluate such rights before they enter the market as it can have major theft to the
organisation secrets.
Opportunities
 Government support and regulations
 Strong in economic and industrialisation
 increasing use of technology
Weakness
 High investment in the research and development program
 Lack of infrastructure for customers
 Slow deliveries
Porter’s five forces
It is another model that can help firm in understanding various external factors
and threats that can have their impact on the working of firm. Threats of new entrant is
low, bargaining power of suppliers is low, bargaining power of buyers is moderate.
Whereas threats of substitutes is high and rivalry between existing companies is high.
Competitive positive of Alibaba
Alibaba has strong competitive position. It has become the leading brand in the
retail industry. But due to lack of innovative ideas it has to face difficulties.
4. CONCLUSION
From the above report, it can be concluded that Alibaba is one of the strongest
firms in the market. Its unique idea of connecting business to business has been so
successful that it has made it one of the leading companies in China. Even though firm
is making continuous changes in their working, they can be more profitable but their
lack of investment and innovation is costing the firm its position. In order to keep
holding its leading position in market its necessary of the firm to invest in technology.
This will not only provide the firm with stability but also with competitive advantage.
Along with this, it can also invest in offline trading.
Recommendations
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Looking at the strengths and weaknesses of Alibaba, some strategic plan has
been recommended that can help Alibaba in gaining competitive advantage. Online to
offline is one of the strategies that Alibaba can be adopted in their working. The
corporate entity can join the hands with physical retail stores of country this will not only
provide them with competitive advantage but will also solve their problem of late
deliveries. The customer can browse the products on the stores before they can make
any purchase on Alibaba website. By joining its distribution forces with the network of
physical stores, it can cut down its delivery time to mere 2 hours. This will also reduce
the threat of substitution.
Firm can also invest in technology and can start its own distribution channel so
that the problem of late deliveries can be solved. It can also form partnership with
leading brand who can promote their company on their sites for e.g. in China people
use wechat, the firm can form alliance with them and can ask them to advertise their
product their
Johnson strategy test
Johnson has given strategy testing model which helps to analysis effectiveness
of the strategy. Successful strategy needs to be suitable, acceptable and feasible.
Investment in technology is the great strategy and suitable for the organization because
it has adequate financial resources and it will help in brining innovation in the workplace.
By this way operational efficiency will get improved. Investment in technology will
support in gaining high profit and minimizing cost so it will give benefit to shareholders.
It would be feasible as well.
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REFERENCES
Books and Journals
Chaffey, D. and et.al., 2015. Internet marketing: strategy, implementation and practice.
Pearson Education.
Chen, S.H., 2016. The influencing factors of enterprise sustainable innovation: an
empirical study. Sustainability. 8(5). pp.425.
Huang, L., Hu, G. and Lu, X., 2016. E-business ecosystem and its evolutionary path:
the case of the Alibaba group in china. Pacific Asia Journal of the Association for
Information Systems. 1(4).
Liu, G., Ren, Q. and Zhang, W., 2015. Method, system and server of removing a
distributed caching object. U.S. Patent 8,935,482.
Qing, H., 2015, December. A model for value-added e-market provisioning: Case Study
from Alibaba. com. In Future Generation Communication and Networking
Symposia, 2008. FGCNS'08. Second International Conference on 1. pp. 47-52.
IEEE.
Sundaramurthy, C., 2015. BA 630 Business Strategy.
Tan, B. and et.al., 2015. The role of is capabilities in the development of multi-sided
platforms: The digital ecosystem strategy of Alibaba. Com. Journal of the
Association for Information Systems. 16(4). p.248.
Tan, H., 2016. How to identity valuable firms for outside investors?: a case study of
Alibaba Group (Doctoral dissertation).
Wong, Y. L., 2015. Government and business in China: the case study of Alibaba
Group.
Xue, C. and Xu, Y., 2017. Influence Factor Analysis of Enterprise IT Innovation Capacity
Based on System Dynamics. Procedia Engineering. 174. pp.232-239.
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Online
Alibaba Group environmental analysis. 2016 [Online] Available through:
<http://fernfortuniversity.com/term-papers/pestel/nyse4/2588-alibaba-group-
holding-limited.php>
Analyze of the Marketing Strategy of Alibaba in China. 2016. [Online] Available
through: <http://ecommercechinaagency.com/top-marketing-strategies-to-
success-with-alibaba/>
Xiaohan Zang. 2015. Alibaba shift in strategy. <https://themarketmogul.com/alibabas-
shift-in-
McKinsey’s Three Horizons of Growth Can Help You to Innovate, 2017. Online
Available through: <https://www.executestrategy.net/blog/mckinseys-three-
horizons-of-growth/>
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Appendix 1
SWOT analysis
Strengths
 Great success in domestic market.
 High growth rate
 Good distribution and sales network
 Strong financial support
Weaknesses
 Weak brand portfolio
 High investment in the research and
development program
 Lack of infrastructure for customers
 Slow deliveries

Opportunities
 Government support and
regulations
 Strong in economic and
industrialisation
 increasing use of technology
Threats
 Changes in Government regulation
 Economic crisis
 Emergence of E-commerce and
involvement of various companies
Appendix 2
PESTLE Influence and implication Importance level
Political Political factor in simple words can be defined as the
government intervention the economy. Before
High
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establishing the business in international market its
necessary to understand the various law such as
employment, tariff law, etc. that can have major
impact on the working of firm. The government of
china is very supportive to domestic business which
help Alibaba in operating their activities smoothly.
Furthermore, the government is also investing money
for the further development of technology and online
market which will also be in the favour of nation (Tan
and et. al., 2015). The nation has effective rule that
Alibaba has to follow if it wants to establish in the
market of US. It can also invest in developing
countries like India
Economic Economic play important role determining how much
of revenue an organisation can earn. It is important for
Alibaba to analyse the economic environment of
nation before establishing in that market. Economic
factor generally include interest rate, exchange rates,
inflation per person income etc., US is one of the
largest economy with GDP more than $16.760 trillion.
The strong economy of US will assist Alibaba in
entering the market of US and finding stability there.
High
Social Social factors include different aspect related to culture
and demographic aspects of society. The USA has
high number of people who use online medium to
carry out their various activity. This will be in the
favour of Alibaba. The large number of population in
US is consisted of old people who are still reluctant to
accept technology in their daily life.
Medium
Technological Technology play major role in the working of firm and High
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providing them with competitive advantage. From very
early time the Alibaba has adapted necessary
technology in their working which has helped them in
their success.
Environmental Different market has different environmental standard
and norm which has major impact on the profitability
of firm in the market. For example, America have
various liability law in case of environmental disaster
or in case of ant mishaps. Many of European country
also have healthy tax break to company that are
operating their business in renewable sector.
Medium
legal There are many countries whose legal framework are
not build enough to protect the intellectual rights of
organisation.
Medium
Appendix 3
Porter’s five forces Influence and implication Importance level
Threat of new entrant Setting up a smaller and Low
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more focused e-commerce
is not difficult in China but
setting up the market as big
as Alibaba where
manufacturers themselves
are registering them self for
fee. Along with this long
time and high profit was
able to help Alibaba in
making their place secure in
the market of China, which
has reduced the treat. But
same can be said for the
international market,
especially in retail where
the new entrant and
innovative idea is putting
pressure on the group.
Bargaining Power of
Suppliers
Suppliers of Alibaba are the
manufacturers that are the
members or the part of
Alibaba selling page. Due to
its strong position in market.
Its suppliers who have to
pay the group in order to
have their product listed on
the website of cited firm
(Chaffey and et. al., 2015).
There are many suppliers in
China who are eager
Low
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register with Alibaba.
Bargaining Power of Buyers Buyers of Alibaba included
both business across the
globe as well as individual
customers. The firm offer
their buyers a low price for
the quality product along
with wide variety and strong
distribution channel which
make it difficult for them to
switch to other firm. In
recent time specialized
online marketplace has
been introduced which was
able grab large share of
market. It has provided
buyers with other option
making their bargaining
power to medium level
against Alibaba.
Medium
The Threat of Substitutes The threat of being
substitute is high in
international market as they
are offering various product
which can replace the
product of cited firm for e.g.
physical retail stores that
are offering goods at low
price. Furthermore, there
has been changes in the
High
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way things work, many of
the suppliers are directly
delivering their products to
the customers (Alibaba
Group environmental
analysis. 2016).
Rivalry between Existing
Companies
Competitive rivalry is one of
the important factor that can
lead to many changes in
the decision and strategy of
firm. Alibaba faces serious
competition from different
online site that both within
and outside of china (Qing,
2015). This alternative
market has been the reason
behind the loss of profit.
However, the large
connecting market with
buyers provide Alibaba with
an competitive environment
High
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