BUS 301: Competitive Strategy Analysis of Alibaba and Tesco Report

This report provides a comparative analysis of the competitive strategies employed by Alibaba Group and Tesco PLC. The report begins with an overview of both companies, including their founding, business models, and market positions. It then delves into the specific strategies each company has used to gain and sustain a competitive advantage, such as innovation, customer focus, and effective promotional strategies. For Alibaba, the report highlights the evolution of its business model, the introduction of services like Taobao and Alipay, and its continuous innovation to maintain its market leadership. For Tesco, the analysis focuses on its customer intelligence, innovative virtual store concepts, and effective social media marketing. The report concludes by summarizing the key factors that contribute to the success of both companies in their respective markets, providing valuable insights into their approaches to business development and competitive positioning.

Running head: Competitive Strategy 0
Competitive Strategy Assignment
Alibaba and Tesco

Competitive Strategy
1
Alibaba Group
Alibaba Group is a Chinese company established in 1999 in China. The company’s
headquarters are located in Hangzhou, Zhejiang, China. The company was founded by Jack
Ma. The company is an e-commerce website that provides customer to customer, business to
customer and business to business services to its customers. It has operations across 200
countries. In 2016 the company defeated world’s largest retailer Wallmart and secured the
topmost position. The company began as a website that was designed to help small Chinese
manufacturers and retailers to sell their products in global markets. Now the company is a
world leader in online and mobile e-commerce. Today the company has expanded its
portfolio to digital media, cloud computing and entertainment (Alibaba group 2017).
Today Alibaba is more successful than eBay and Amazon together. The credit for Alibaba’s
success could be credited to unique business model and sustaining the competitive advantage
through innovation and development. The company had a unique business model that was
designed only for small enterprises. This model provided value to small enterprises that were
not possible individually (Pavie 2016).Alibaba’s business model is different from that of
competitors rather than normal e-commerce company, Alibaba makes efforts to provide best
service quality to sellers and buyers. The company works on the principle of collectivism and
trust. People look up to Alibaba as a platform where they can build up trade connections with
people internationally. It is easy to gain competitive advantage but difficult to sustain it.
Every company needs to do something innovative in order to remain in the competition. The
company sustained its competitive advantage through time to time innovations. The major
successful innovations that helped the company secure current market standing are discussed
below (Success story 2017):
 In 2003 Alibaba founded Taobao. Taobao is a customer to customer retail sales
website of Alibaba group.
 In 2004 the company offered Alipay. It is an app which holds payment and releases it
to the seller only when the product is received.
 In 2005 the company entered into a partnership with Yahoo and acquired Yahoo
China.
 In 2008 the company launched a web portal known as Tmall.
 In 2010 company introduced a search engine for shopping named eTao.

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 In 2011 the cloud computing team of the company launched mobile operating system.
The above examples show that company did not stop at one place it continuously evolved to
sustain the competitive advantage. The other reasons for Alibaba’s success are consistently
creating value to the firm. The company always keeps its customers at first priority. Alibaba
does constant efforts to increase customer satisfaction. The company reduces cost for
customers by innovation in the traditional supply chain. The company also reduces the
product turnover time by application of latest technology in the business. It has also launched
a venture named Alipay which allows the customer to release payment after the product is
received. To analyze the needs of its customers Alibaba takes help from its huge customer
behavior data. The company offers various other support services to its customers (Redaction,
R. 2016).
Tesco
Tesco is a British multinational company. Tesco is a well-known grocery and general
merchandize retailer. It was founded by Jack Cohen. The company is having in the United
Kingdom but it operates in various countries around the globe. Tesco began as a small market
stall in 1919 and today it is a leading market player in the industry. It has around 460,000
colleagues. It has about 6,809 across the world. Tesco’s vision is to serve customers little
better every day. Today the company has expanded so much and emerged as a leading retailer
because of its continuous innovative offers. Tesco is world’s third largest super market group
(Tescoplc 2017).
From a small grocery shop, Tesco became a leading retailer in the industry. The reasons for
the success of the company can be credited to customer intelligence, innovation and a strong
presence on social media. Tesco is the company that works to gain profound knowledge of its
customers so that it could analyze customer’s needs ahead of the competitors. This
knowledge gave Tesco an opportunity to sell more goods and services than its competitors.
The company works not only to attract new customers but also takes initiatives to sustain old
customers. Tesco provides club cards to its customers that provoke its customers coming
back to the company. It has also offered price benefits to its customers. The company
launched a scheme in 2015 that guaranteed that if the sum total of 10 or more products will
be more than any of its rival, then the company will refund the amount to the customers. The
company used price as a weapon to gain competitive advantage (Lee 2016). The next thing

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that is the essence of company’s success is innovation. The company implements innovative
ideas to take the first mover advantage and lie ahead of competitors. Innovation ideas at
Tesco are based on two factors that are customer’s needs and future forces (Destination
innovation 2017). One of the most successful innovations of the company is virtual stores.
The company analyzed that South Korean customers are very busy and work for longer
hours. They do not have time and energy to visit the stores for grocery shopping. The
company came with an idea of virtual stores; these stores reduced the need for going to the
stores to shop for the grocery. These stores provided product catalog at places such as bus
stops and railway stations. The customers can scan the QR code of desired product through a
mobile app and utilize their waiting time by shopping for groceries (Creevy 2011). This
venture of the company gained immense success and a major contributor of today’s market
standing of the firm. Another reason for the firms leading position is its effective promotional
strategies. The firm is continuously engaged in social media marketing. Tesco’s face book
and pages are constantly upgraded with the latest offers and schemes. Tesco also gives
various advertizements on YouTube according to the occasion. The company keeps
constantly turned up with various other digital marketing platforms. The promotional
strategies of the company are aimed at creating an emotional touch with the customer.

Competitive Strategy
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References
Alibaba Group, 2017. History and milestones, viewed on 18 August 2017 from
http://www.alibabagroup.com/en/about/history
Creevy, J. 2011. Tesco opens virtual store in South Korea, viewed on 18 August 2017 from
https://www.retail-week.com/topics/technology/tesco-opens-virtual-store-in-south-korea/
5028571.article
Destination innovation, 2017. The innovation process at TESCO, viewed on 18 August 2017
from http://www.destination-innovation.com/the-innovation-process-at-tesco/
Lee, A. 2016. How Tesco Became the UK’s Biggest Retailer via Word-of-Mouth, viewed on
18 August 2017 from https://www.referralcandy.com/blog/tesco-marketing-strategy/
Pavie, X. 2016. Seven reasons for Alibaba’s success, viewed on 18 August 2017 from
https://www.digitalcommerce360.com/2016/07/27/seven-reasons-alibabas-success/
Redaction, R. 2016. The seven reasons for Alibaba’s success ; Alibaba’s development and
framework, viewed on 18 August 2017 from https://www.retailnews.asia/seven-reasons-
alibabas-success-alibabas-development-framework/
Success story, 2017. Alibaba Group Success Story, viewed on 18 August 2017 from
https://successstory.com/companies/alibaba-group
Tescoplc, 2017. Our businesses, viewed on 18 August 2017 from
https://www.tescoplc.com/about-us/our-businesses/