Competitive Policy Analysis Report: Alibaba vs. Virgin Group

This report presents a comparative analysis of the competitive policies and business strategies employed by Alibaba and the Virgin Group. It begins by examining Alibaba's rise in the e-commerce sector, detailing its business model, which focuses on connecting manufacturers with international buyers, and how it has achieved its current market position through various strategies. The report then explores the CAGE framework utilized by Alibaba in its global operations. Following this, the analysis shifts to the Virgin Group, discussing its diversification strategy across multiple sectors, its unique business model, and the factors contributing to its market success. The report also investigates Virgin Airlines' business model and the application of the CAGE framework by the group. The analysis includes references to key strategies, market positions, and the application of frameworks like CAGE to understand how both companies have achieved and sustained their competitive advantages.

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COMPETITIVE POLICY
Contents
ALIBABA........................................................................................................................................1
HOW ALIBABA HAS ACHIEVED ITS CURRENT POSITION IN MARKET..........................1
BUSINESS MODEL OF ALIBABA...........................................................................................2
CAGE FRAMEWORK................................................................................................................2
VIRGIN GROUP.............................................................................................................................3
HOW VIRGIN GROUP HAS ACHIEVED ITS CURRENT POSITION IN THE MARKET......3
BUSINESS-MODEL OF VIRGIN AIRLINES...........................................................................5
CAGE FRAMEWORK................................................................................................................5
REFERENCE LISTS.......................................................................................................................7

COMPETITIVE POLICY
ALIBABA
Alibaba Group is a Chinese e-commerce company which pioneered in the e-commerce
business in the country. Allibaba was founded by Jack Ma in the year 1999 with the novel
motive of connecting manufacturers of China with international buyers. The company operates
on customer-to-customer, business- to -customer and business- to –business model. Alibaba
revolutionized the e-commerce business in People Republic of China and have achieved business
excellence. The reason behind choosing the company is to study how Alibaba had a humble
beginning in the year 1999 and surpassed companies like Walmart and Amazon to be the largest
retailer of the world in the year 2016(Alibaba , 2017)
HOW ALIBABA HAS ACHIEVED ITS CURRENT POSITION IN MARKET
The company operates in more than 200 countries .In the year 2017, the market cap of
was about USD$305. Alibaba followed different business strategies to achieve its current top
position in e-commerce market. From the year 1998 to 2001, the motive of the company was to
serve the needs of all the small and medium size enterprises of China by providing them online
services and connecting them with customers. In the year 2000, Porter Erisman was hired by the
company who guided the company in globalizing its operations. In the year 2002, a certification
of credit which was extremely reliable called TrustPass was invented by Alibaba which made
transactions safe for customers. The demand for products at reasonable price grew worldwide,
thus Alibaba had the opportunity to excel in the export business by gaining more global
customers. In the year 2014, Alibaba received the largest IPO in the history of the United States.
The major stakeholders of the company are Softbank Corp and Yahoo Inc.

COMPETITIVE POLICY
Thus Alibaba applied the concept of strategies by figuring out who their customers were, how
the company could serve them and how it would generate revenue (Hill, Jones & Schilling,
2014).
BUSINESS MODEL OF ALIBABA
 Alibaba centered its core-business on e-commerce and the business model of
the company is a combination of many famous technological companies of the
United States, but the company has not imitated the business model of any
particular company.
 The company does not hold any inventory, neither has warehouses. The prime
feature of Alibaba’s business model is its innovative software platform.
 Alibaba has created companies like Alipay, an online payment platform,
Aliyun for cloud computing and China Smart Logistics.
 Alibaba has made major investments in a number of start-up companies in the
United States like Snapchat. The company has also invested in many other
Chinese companies.
CAGE FRAMEWORK
Alibaba operates in 200 countries by analyzing their Cultural, Administrative,
Geographic and Economic factors. The company connects the global customers with the small
and medium size Enterprises of China by offering them products at reasonable rate. The
company operated on Just-In-Time Technology with no inventory and warehouses. Orders of
global customers are processed on real time and payment is safe for these customers. Alibaba’s
innovative online platform and digital marketing tool enables the company to connect with
global customers in more than 200 countries (Madsen & Walker, 2015).

COMPETITIVE POLICY
VIRGIN GROUP
The Virgin Group is a British company and was founded by Richard Branson. The group
invests in five core sectors like Financial Services, Travel and Leisure, Telecoms and Media,
Music and Entertainment and Health and Wellness. The group is a venture capital conglomerate
and has achieved excellence in business since its inception in the year 1989. The group is
headquartered in City of Westminster. The group also has family owned ventures like Virgin Car
and accomplished several successful business like Virgin Airlines, Virgin Cruises, Virgin
Records and Virgin media. The company is chosen to study its unique business model of
diversification (VIRGIN GROUP, 2017).
In the year 2014, the net worth of Virgin Group was estimated to be around 5 billion
British pounds. The company has achieved this outstanding position in the market with its
innovative business model .The founder Richard Branson founded Student Magazine and Virgin
Records which gained huge popularity. After 10 years of success, the company ventured into
airline business with the foundation of Virgin Airlines. The Virgin group has 200-300 brands.
HOW VIRGIN GROUP HAS ACHIEVED ITS CURRENT POSITION IN THE MARKET
The founder of the company -Richard Branson’s agile business style is the main reason
behind the success of the group. He has high risk tolerance, and iterates ideas rapidly and is
extremely graceful in shutting down a failure. He protects his business from downsides before
venturing into a new business (Dhliwayo, 2014).

COMPETITIVE POLICY
BUSINESS-MODEL OF VIRGIN AIRLINES
The business model of the company is a generic conglomerate and keiretsu.
 At times the company simply licenses its brand, like Virgin Records. The
company has diversified into different sectors and runs under one brand name –
The Virgin. The single brand name enables the company to retain its brand image
and customer perceived value.
 The company is extremely customer-centric (Block et al., 2015). This enables the
founder to survive in the industry since more than 50 years. The feedbacks from
customers are taken and necessary changes are incorporated in the service sectors
business of the company, like Virgin Atlantic airlines.
 The company has diversified into more than 300 brands but all these brands are
centered across its five core sectors- like Financial Services, Travel and Leisure,
Telecoms and Media, Music and Entertainment and Health and Wellness (Eden &
Ackermann, 2013).
 The company has strong network of investors. The company is an investor in
technology-focused ventures and has invested in more than 35 technology
ventures. The company gains long term capital appreciation by its innovative
investment schemes (Gamble & Thompson, 2014).
CAGE FRAMEWORK
Virgin group is a global company and before venturing into global market the company
analyzes the Culture, Administrative, Geographic and Economic factors of a particular country.

COMPETITIVE POLICY
For instance, the British company has its popular airline in Australia –Virgin Australia. The
company has studied the Australian market well, has analyzed all macro business environment
factors and applied the CAGE framework before beginning its airline operation in the country
(Bereznoi, 2015). The successful implementation of CAGE framework makes the business
model innovative for the company and helps the company to implement the environmental
changes of a particular country in its model while operating in that country.

COMPETITIVE POLICY
REFERENCE LISTS
Alibaba. (2017). alibabagroup.com/en/global/home. Retrieved 8 September 2017, from
http://www.alibabagroup.com/en/global/home
Bereznoi, A. (2015). Business model innovation in corporate competitive strategy. Problems of
economic transition, 57(8), 14-33.
Block, J. H., Kohn, K., Miller, D., & Ullrich, K. (2015). Necessity entrepreneurship and
competitive strategy. Small Business Economics, 44(1), 37-54.
Dhliwayo, S. (2014). Entrepreneurship and competitive strategy: An integrative approach. The
Journal of Entrepreneurship, 23(1), 115-135.
Eden, C., & Ackermann, F. (2013). Making strategy: The journey of strategic management.
Sage.
Gamble, J. E., & Thompson Jr, A. A. (2014). Essentials of strategic management. Irwin
Mcgraw-Hill.
Gamble, J. E., & Thompson Jr, A. A. (2014). Essentials of strategic management. Irwin
Mcgraw-Hill.
Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an
integrated approach. Cengage Learning.
Madsen, T. L., & Walker, G. (2015). Modern competitive strategy. McGraw Hill.

COMPETITIVE POLICY
VIRGIN GROUP. (2017). virgin.com/. Retrieved 8 September 2017, from
https://www.virgin.com