MGT 626 - Innovation Strategy Making Process within Alibaba Corp

This essay delves into the strategy making process for innovation within Alibaba Corporation, an e-commerce giant founded in 1999. It highlights Alibaba's mission to facilitate global business, supported by core commerce, cloud computing, digital media, and innovation initiatives. The analysis includes a SWOT assessment, emphasizing Alibaba's strengths in its scale of operations and market share in China, its weakness in managing massive sellers, and opportunities in emerging technologies like cloud computing and AI. The essay also identifies threats such as competition from Flipkart and Amazon in India. Furthermore, it discusses the resources driving Alibaba's innovation, including cloud computing infrastructure and big data analytics, and examines how the organization's size and decentralized structure impact its decision-making processes. The essay concludes by referencing the cyclical innovation model and the importance of collaboration and technology choices in sustaining Alibaba's competitive edge.

Running head: STRATEGY MAKING PROCESS FOR INNOVATION 1
Strategy making process for innovation within Alibaba Organization
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Strategy making process for innovation within Alibaba Organization
Strategic innovation is mainly focused on creating a sustainable superior performance. A
robust strategy is extremely important in every organization to achieve a competitive advantage.
Due to the limited resources, organizations make strategic decisions to achieve and sustain a
competitive advantage. As pointed out by Lee & Olson (2016), innovation strategy making is set
to commit a corporate to specific technologies, resources, products and markets over a long
period of time. It enables an organization to match its existing resources with opportunity as well
as risk in outside environment. In order for an organization to make a well-articulated strategy,
the corporate must its mission, external factors, strength and weakness as well as threats in the
dynamic and challenging market. In this essay, we discuss the strategy making process for
innovation within Alibaba Corporation.
Alibaba Inc. is an e-commerce organization which was formulated by Jack Ma back in
the year 1999. The business is based in Hangzhou, China. The corporate has a business to
business online platform which serve the needs of its suppliers and buyers. The business has a
wholesale platform for small scale buyers who seek to ship small amounts of goods from global
site (Choi, 2017). Alibaba also provides internet infrastructure services and business
management software which targets its business across China. Alibaba’s group mission is to
make it easy to do business from anywhere. As such, the business is armed with core commerce,
cloud computing, digital media and entertainment as well as innovation initiatives to help it
achieve its mission. The organization generates a bulk of its revenue from its online platforms
including, alibaba.com, tmall.com and taobao.cm. Along with the stated sources of funds that
operates Alibaba, a considerable amount of funds also come from Alibaba cloud computing, an

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online pay system like Paypal known as Alipay, and laiwang messaging application to mention a
few.
In summary of the organization’s SWOT analysis, the key strength of Alibaba is its scale
of operation and the market where it majorly operates. China is the country with the highest
population in the world and to have stronghold in such kind of market besides being the leader in
the market is not a mean feat (Kantar, 2019). Another noteworthy strength of the business is its
market share. According to Long (2019), 60% of China’s market share is dominated by three
organizations including Alibaba, Baidu and Tencent of which Alibaba accounts for 32% of the
market share. Alongside the organization’s strength, its major weakness is that it ways massive
sellers. The organization does not put any qualification for its sellers, as such, it has a large
number of online sellers competing in the market.
In Alibaba’s opportunities, the key opportunity of the organization is the current
innovation. The advanced technology has come with various opportunities including cloud
computing, Artificial intelligence and machine learning to mention a few that the organization
can exploit to achieve its mission to make it easy to do business anywhere (Kim & Chen, 2016).
Along with that, other opportunities Alibaba have is its rise in investment and trust by people.
The organization’s major threat, however, is the Flipkart and Amazon in India. As such, if
Alibaba wants to expand its business in other countries especially in India, the organization’s
biggest threat is the establishment of Flipkart and Amazon in the country.
There is a number of resources that determines the value of the organization’s innovation.
The adoption of cloud computing by the organization infer Alibaba’s innovation efforts. As
stated by Ma, “Large scale computing and data are the father and mother of Artificial
intelligence AI.” The company has heavily increased its focus on cloud computing (Leavy,

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2019). In fact, Alibaba’s ICT sector has developed an OS known as Apsara which can process
over 175000 transactions in one second.
Moreover, the revenue of the organization from internet infrastructure and cloud
computing are growing at a very high rate. In addition to cloud computing, Alibaba Big Data is
another handy resource that suggest the corporate’s efforts to innovation. The corporation
integrates a comprehensive big data covering almost all aspects of their customer’s daily lives by
cooperating with software organizations. These data are used by the organization’s marketers to
choose the best advertising channels.
The organization secure has its innovation options in various ways ranging from its human
resource to technology department. Alibaba has a tech savvy department. It could take the
organization’s engineering department several days or months to launch a new product in the
past. Now Alibaba literally launch products and new features on a daily basis. The organization
has not limit itself to e-commerce sector (Yang, Sun & Lee, 2016; Bai & Yu, 2016). Alongside
e-business, Alibaba is on technology in order to enable Internet of Things IoT such as smart
products that are networked and are able to respond to voice command a sector known as
distributed voice recognition and the organization seek to apply this technology in manufacturing
sector.
Various factors including technology, and size may affect an organization’s decision
making (Tan, Pan, Lu & Huang, 2015). This section presents how the size of Alibaba affects its
decision making. Alibaba is a large organization which operates from various countries. As such,
the organization is decentralized and this would impact decision making within the corporate.
The larger the size of an organization the higher the chances of decentralization this is very
significant from the organization’s innovation strategy perspective.

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Collaboration across trust, products, and functions must take place in order to enable
Alibaba to flourish by combining capabilities across various organizations. Innovation only take
place when an organization join other corporates’ know how with its users’ needs (Zhang &
Wang, 2018). According to cyclical innovation model, the innovation involves a continuous
process of interaction between changes and developments in markets, technology, products and
services as well as science. The choice of technology of the organization can be explained as a
trade-off between its variable and fixed costs, Alibaba needs to spend on flexible costs.

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References
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Choi, B. (2017). Corporate Strategy of Baidu, Alibaba, Tencent for Electric Vehicle (EV)
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Kim, Y. C., & Chen, P. C. (2016). Alibaba's strategic drift.
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Lee, S. M., & Olson, D. L. (2016). Convergenomics: strategic innovation in the convergence
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