Strategic Management Report: Alibaba E-Commerce Company Analysis

This report provides a strategic analysis of Alibaba Group Holding Limited, evaluating its vision and mission statements, and assessing its external environment using PESTEL and Porter's Five Forces. It also examines Alibaba's internal capabilities, including value chain and resource audits, and utilizes the VRIO framework and KPI benchmarking against JD.COM. The report proposes strategies based on SWOT, TOWS, and Ansoff Matrix, followed by an evaluation using SAFe (suitability, acceptability, feasibility). The analysis covers Alibaba's market position, financial performance, and strategic direction in the e-commerce industry, offering insights into its strengths, weaknesses, opportunities, and threats. The report offers a comprehensive evaluation of Alibaba's strategic approach, making recommendations for future growth and adaptation.

Running Head: ALIBABA E-COMMERCE COMPANY
1
1
1
1
Alibaba e-Commerce Company
Name
Professor
Course
Date

ALIBABA E-COMMERCE COMPANY
2
Table of Contents
1.0 Introduction
1.1 Purpose of Study
1.2 An Overview of Alibaba Group Holding Limited
2.0 Alibaba’s Statements
2.1 Alibaba’s Vision
2.2 Alibaba’s Cultures and Values
2.3 Alibaba’s Vision Statement Analysis
2.4 Focus Clear and Motivational
3.0 Environmental Analysis
3.1 PESTEL Analysis
3.2 Porter’s 5 Forces
4.0 Capability Analysis
4.1 Value Chain
4.2 Resource Audit

ALIBABA E-COMMERCE COMPANY
3
4.3 VRIO
4.4 KPI Benchmarking (Alibaba Vs JD.COM)
5.0 Proposed Strategy
5.1 SWOT
5.2 TOWS
5.3 Ansoff Matrix Proposed Strategies
6.0 Evaluation of Proposed Strategy – SAFe (suitability, Acceptability Feasibility)
7.0 References
8.0 Appendix
1.0 Introduction
Strategic management is the comprehensive collection of ongoing practices and procedures that
an organization uses to efficiently facilitate and align the resources & actions with their mission
& vision all through., Jagero(2014).
There are alternate views that says Strategic management is a tool made available and accessible
for organizations to establish the organizational management systems., Gerry (2014).
Some of the elements Strategic management covers aremonitoring, analyzing, assessing and
continuous planning of all that is necessary for an organization to meet its goals & objectives. It

ALIBABA E-COMMERCE COMPANY
4
encourages one to survey their organization's current situations, chalk out strategies, deploy them
and examine the viability of the implemented strategies.
1.1 Purpose of Study
This report will examine& analyze the Strategic Plan of Alibaba Group Holding Limited,
Report Analysis will consist of
 Evaluating and determining both Vision and Mission statement matches the company
focus.
 Evaluating the external Macro environment of E-Commerce industry in China.
 Evaluating the internal capabilities of Alibaba Group Holding Limited.
 Conducting a 3-year Key Performance Indicator (KPI) analysis between Alibaba
Group Holding Limited and JD.COM
 Proposing Relevant Strategies to address issues identified in Alibaba Group Holding
Limited
 Evaluating the Proposed Strategy
1.2. An Overview of Alibaba Group Holding Limited
Alibaba Group Holding Limited, founded in April 1999 by Jack Ma whom was an ex
teacher in Hangzhou, China. He led 18 people together and started this company to
champion small businesses with the confidence that the internet even the oddsby
empoweringsmall enterprises to use technology and innovation to develop and
competeall the more viably in the local and worldwide economies.

ALIBABA E-COMMERCE COMPANY
5
Alibaba Group Holding Limited,most commonly known as Alibaba is a Chinese
multinational online business, retail, Internet, AI and Innovationcombination that gives
customer to-shopper, business-to-purchaser and business-to-business sales services by
means of web-based interfaces, and in addition electronic installment administrations,
shopping web crawlers and distributed computing administrationsas well as electronic
purchasing services, shopping web crawlers and cloud computing services.
Alibaba is a Public Listed company on New York Stock Exchange (NYSE :
XNYS:BABA), owns & works a various exhibit of organizations around the globe in
various divisions, and is named as one of the world's most respected organizations by
Fortune.,(Tung 2018).Alibaba is one of the top 10 most valuable and biggest companies
in the world., (Rebecca2017)and it is also the second Asian organization to break the
US$500 billion valuation stamp and as of 2018, Alibaba has the ninth highest global
brand value.
Alibaba Group Annual Revenue Report from 2010 to 2018 (in yuan millions)

ALIBABA E-COMMERCE COMPANY
6
Figure 1: Alibaba Group Annual Revenue Report from 2010 to 2018 (in yuan millions)
2.0 Alibaba’sStatements
2.1 Alibaba’s Vision
 To solve challenges of small business in procurement, sales & marketing,
management & financing through information technology
We aim to build the future infrastructure of commerce. We envision that our customers will meet,
work and live at Alibaba, and that we will be a company that lasts at least 102 years.
 Meet at Alibaba

ALIBABA E-COMMERCE COMPANY
7
 We enable hundreds of millions of commercial and social interactions among
our users, between consumers and merchants, and among businesses every
day.
 Work at Alibaba
 We empower our customers with the fundamental infrastructure for commerce
and data technology, so that they can build businesses and create value that
can be shared among our ecosystem participants.
 Live at Alibaba
 We strive to expand our products and services to become central to the
everyday lives of our customers.
 102 Years
 For a company that was founded in 1999, lasting at least 102 years means we
will have spanned three centuries, an achievement that few companies can
claim. Our culture, business models and systems are built to last, so that we
can achieve sustainability in the long run.
2.2 Alibaba’s Cultures & Values
Cultures: To operate an ecosystem where all merchants, participants, third-party service
providers, consumers and others have an opportunity to prosper.
Success and rapid growth is built on the spirit of innovation, entrepreneurship,
and an unwavering focus on meeting the needs of the customers.

ALIBABA E-COMMERCE COMPANY
8
Believing that a strong sense of shared values enables them to maintain a common
company culture and community, no matter how large they grow.
Values: Alibaba's values are fundamental to the way they work and how they enrol, assess
and compensate their people.
Alibaba group has 6 values and they are:
Figure 2: Alibaba group 6 values

ALIBABA E-COMMERCE COMPANY
9
2.3 Vision Statement Analysis
Alibaba only has a vision statement and it only seems to be emphasizing on the
importance of economic value, growth from customer perspective, the intention to
expand as a business and to last at least three centuries from the established date. From a
company perspective, this can be said sufficiently focus however there was nothing
mentioned of their workforce nor was there a direction mentioned for their employees.
This can be said to be less-motivational and on an overall aspect, it can be justified that
their direction is not clear enough.
To assess Alibaba's vision statement, this report will be using SMART Principle and
finish up by evaluating if the mission and vision statements are clear, focused and
motivating.
Focus, Clear & Motivational as indicated by Lee's structure, the achievement of Alibaba
Organization will be specifically identified with the rate at which the organization watches the
consistent utilization of the web in their correspondence. The it focuses on quicker spread of data
and also the formation of correspondence stages where sharing of data will happen. The
utilization of the structure likewise guarantees that the organization the spryness and
maintainability of the organization is kept up along these lines prompting the general
accomplishment of the organization. The e-business in Alibaba Organization is on its developing
stage and in this way more consideration is expected to make the organization prosperous. This
should be possible by nearly checking the activities of the organization by utilization of the web
to get to the required data (Estampeet al, 2013 p.247). More concentration is any way

ALIBABA E-COMMERCE COMPANY
10
coordinated towards the part of electronic production network and how it influences the
execution of the Alibaba Organization.
1.1 Purpose of study
The study is purposely for analysis of Alibaba company supply chain is merchandise,
administrations and cash spill out of providers of crude materials to end clients through
production lines and distribution centers. E-store network is an inventory network whose
administration is done electronically more often than not through utilization of web application.
E-store network administration is the utilization of innovation to enhance production network
exercises activities (Estampe et al, 2013 p.247). The accomplishment of e-store network is
essentially reliant on the permeability of data along the inventory network, tight coordination of
production network, the perspective of accomplice joint effort as a vital resource and quality,
speed, cost and client benefit (Caldwell let al, 2013 p.688). E-inventory network administration
of Alibaba chiefly includes the accompanying exercises; renewing the store network, E-
acquisition, checking and controlling of the store network utilizing RFID collective arranging,
outline and advancement of the item, E-coordinations and utilization of B2B supply networks
(Caldwell et al, 2013 p.688).
2.0 Environmental Analysis
2.1 PESTEL
 Political.

ALIBABA E-COMMERCE COMPANY
11
As of the end of the year 2017, ecommerce in china has developed more than 50%
growth year over year and this number is expected to continuously grow. Ecommerce
vendors in China actively introduce new ideas, create new options and service models to
consistently upgrade the efficiency of the online channels. This is competently supported
with the encouragement of the Chinese government furthermore; the local shoppers are
among the most anxious to embrace e-commerce over all business sectors around the
world. Nonetheless, local buyers are also demanding and critical of e-commerce channels
and services, which also drive innovation. (Yan 2018).
China is currently assessing the potential effect of steady yuan devaluation, the country’s
leaders measure their alternatives in an exchange spat with US President Donald Trump
that has roiled financial markets worldwide.
While Trump frequently bashed China on the campaign trail for keeping its currency
misleadingly frail, the yuan has increased around 9 per cent for every penny against the
greenback since he took office and has been steady of late in spite of the acceleration of
trade tensions between the world's two biggest economies.
 Economical.
About a decade ago, China represented short of what one percent of the global e-
commerce market; today its share is 42%. Comparing with the United States’ share of the
market is 24%, down from 35% out of 2005, as the chart below outlines. The Ecommerce
market in China continues to see growth in double-digit year on year. Such is China's
predominance in ecommerce, it presently handles a greater number of exchanges every
year than France, Germany, Japan, the United Kingdom and the United States joined.

ALIBABA E-COMMERCE COMPANY
12
 Social
Typical cost for basic items in China is 3.18% lower than in Malaysia however Rent in
China is 48.02% greater. The middle-classgroup of consumers are the main contributors
for the growth in the ecommerce economy as they seek for premium and expensive
brands which leads them to spend more than their planned budget. The Economist
Intelligence Unit (EIU) expressed that the extent of the population earning upper-middle
and high incomes in China will extend from 10 percent to 35 percent in the upcoming
decade.
 Technological
Technology and its influence is causing an Upward-Movement in consumer behavior
everywhere throughout the globe, no place is this brought into more keen point of view
than in the colossus of a market that is China. China has turned into a world leader in
showcasing to a digital world with its ecommerce division now worth $600 billion,
representing around 14% of its aggregate retails. Internet enabled mobile phones and
other devices has penetrated 95% into the country making China's shoppers to have
progressed towards becoming hyper-engaged and hyper-associated with the available
technology today (keith Weed 2018)
 Environmental
The Alibaba company environmental framework for market share incorporates intranets,
corporate gateways, groupware, work process framework and devices, extranets and
electronic information exchange (Shaikhet al, 2014 p.211). There are a few issues which
are fundamentally experienced along the store network of Alibaba. As indicated by Chen,