Alibaba Case Study
Alibaba is a multinational technology corporation based in China that focuses on e-commerce retail. The company, created in 1999 by Jack Ma and his friends, has grown into a thriving enterprise. Alibaba manages its operations through several subsidiaries and divisions. These businesses bring in a lot of money for the company.
Alibaba began as an online marketplace for business-to-business (B2B) transactions. The founder in his Hangzhou residence founded the company. In October 1999, 3-4 months after its founding, the company secured its first substantial investment from Goldman Sachs and Softbank. These companies made a $25 million first investment.
Initially, the business was losing money. However, 2002 was the company's first profitable year. The company expanded its offerings to include a global e-commerce system a year later. As a result, Taobao Marketplace, Alipay, Alimama.com, and Lynx were launched. As part of its expansion into China in the same year, eBay offered to take out its subsidiary Taobao. The buyout, however, was rejected by Alibaba's founder.
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Alibaba SWOT Analysis
The strengths, flaws, opportunities, and dangers that impact the operations and future of one of the world's major online sales platforms are examined in this section.
Alibaba's SWOT analysis Strengths
- Operational scale – One of the first advantages that come to me when I think of Alibaba is the sheer size of its operations and the area in which it primarily works. China is the world's most populous country. Therefore having a stronghold and being a market leader in such a market is no small task.
- Market share - Alibaba had a market share of 58 percent in China in 2015, while its closest competitor had a market share of only 22 percent. One of China's primary advantages is that its market share supremacy is based on the support of solid manufacturers capable of mass production and global distribution.
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Alibaba's SWOT Analysis Weaknesses
- Way too many vendors — When Alibaba went public a few years ago, it had over 8.5 million active merchants, and the number has only continued to rise since then. As a result, a few well-known firms have stopped selling their items on Alibaba's Taobao and Tmall websites.
- Very large discounts - Another flaw is the company's inability to allow sellers to sell at fair and profitable prices. The majority of its income comes from selling advertising space to vendors. Sellers are currently oppressed, with no freedom or chance to sell at profitable rates.
Alibaba's SWOT analysis reveals opportunities
- China Experience - It has enormous prospects in reaching additional markets because it has a strong foundation in the Chinese market and a thorough understanding of the e-commerce sector.
- E-commerce portal demand and investment are on the rise – Alibaba is one of the few E-commerce portals that has earned the trust of its users. So naturally, when Alibaba enters a new country, it brings years of brand credibility with it. As a result, local e-commerce businesses face stiff competition. It also enjoys the support of the manufacturers.
Alibaba's threats in a SWOT analysis
- Flipkart and Amazon in India — If Alibaba wants to expand its operations to other countries, notably India, the presence and established establishments of Flipkart and Amazon will be the largest challenge.
- Overall, there is increasing rivalry — Tencent and JD.com are local competitors in China, while Amazon and eBay are worldwide dangers.
- Economic stability — The economic stability of China will also play a part in determining the success of the firm. However, because practically all of Alibaba's revenue comes from within China, the global markets will only be negatively impacted in extreme circumstances.
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Alibaba PESTLE Analysis
- Political: When it comes to Alibaba's political side, the Chinese government has been pushing for AI to be implemented in the commercial process. The use of Artificial Intelligence in the processing of business assessments will benefit Alibaba, but the primary factor to consider is that the cost of the deployment process will be a significant concern.
- Economic: Macroeconomic issues are the most important considerations in the business management help system's processing. It may be claimed that because Alibaba is based in China, the most important factor to examine is that Alibaba as a brand enjoys a high economic standing. However, there is a problem with China's economic instability once again. Therefore, even though it is a leading economy, it can be argued that a good macroeconomic assessment of its corporate structure will be well preserved.
- Social: The increasing population in target markets has been a significant factor in the target market's segmentation. It can be argued that proper market assessment will be done with enhanced faith in the target audience. It will be necessary to maintain the introduction of CSR initiatives. Alibaba will be required to improve the diversity of items due to an aging Chinese population and a young Chinese population.
- Technological: AI implementation in the data-driven user experience has been observed, and as a result, a careful evaluation of the data-driven user experience will be carried out. This integration of data-driven user experience aids Alibaba in making accurate predictions, which benefits the operation of Alibaba's digital platform-based application.
- Legal: Lawsuits against counterfeits have been conducted after a thorough investigation of the fraud groups. This is why fraudulent stockholders would face legal consequences if their debts were not paid.
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Alibaba Case Study Conclusion
Following an in-depth examination of Alibaba's swot analysis, we have concluded that Alibaba is the world's leading IT firm and e-commerce platform. Counterfeits, data breaches, competition, and rising taxes are just a few major issues. Alibaba needs to safeguard its network and solve the issue of counterfeit vendors. If you are struggling with the Alibaba case study, take help from Assignmenthelp.us.