Alibaba- Corporate Advantage and Competiton

In: Business and Management

Submitted By jackjob
Words 1804
Pages 8
How does Alibaba group create corporate advantage? (Why are the businesses under one roof?) Is this corporate advantage sustainable?

Is the current degree of competition amongst the business units appropriate? Do you think Jack Ma should encourage more cooperation? If so how?

The Alibaba group has thrived in the Chinese e-commerce sector from its inception in 1998. They currently account for over 70% of online shopping in China and delivered annual revenues of $636 million in the 12month period ending June 2009 (case p1-2). Alibaba’s successes are due to multiple factors that have allowed them to create corporate advantage, and thus establish market leadership in China (Case p1). The configuration and coordination of Alibaba’s multi-business activities are paramount to understanding the way in which corporate advantage is created. The relationships between subsidiaries are also a key point of scrutiny, as to whether Ma achieves the correct balance between competition and coordination of business units.
Primarily Alibaba’s organisational structure has allowed the firm to create corporate advantage by encouraging subsidiaries to be leaders of their respective industries (Case p7). Alibaba has also benefitted from a strong set of shared values and a culture which focusses on serving the consumer above all else. This can be seen as a major source of corporate advantage creation across a number of subsidiaries.
The sustainability of Alibaba’s corporate advantage hinges on their continued ability to adapt to the changing market. With significant resources at their disposal, including large consumer databases and a majority share of online retail shopping, it is vital that these are harnessed effectively. There are also threats to Alibaba, particularly the development of the mobile platform. This sector contains competitors with considerably larger user bases (Lex…...

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