Analysis of Alibaba Group: History and Success

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History of Alibaba group

Alibaba Group, which is based in Hangzhou, is the largest online business organization in China. The history of Alibaba Group starts in 1999 when it was founded by 18 businessmen, headed by Jack Ma. In 2000, the group managed to pursue a loan of US$25 million from institutions such as Softbank and Goldman Sachs among others (Zheng 68). This amount helped the organization hire foreign professionals to run the company and help it globalize. This organization operates internet-based businesses and affiliated entities. These include Alibaba.com, Taobao, Tmall.com, China Yahoo, Laiwang, Juhuasuan, e Tao, and Alipay among others (Wang 94). Its mission is to ease buying and selling anywhere, globally. Since its founding, Alibaba Group has always been at the forefront in terms of the development of businesses. These include e-commerce, B2B marketplaces, online payments, and cloud computing among others.

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Alibaba.com started to make profits in 2002, after its launch (Chao and Shara 5). This was after the internet penetration in China became significant. The organization has achieved a lot in the past, specifically after integrating new technologies in its operations. Its expansion to new areas in attempts to keep pace with the technological changes, consumer preferences, globalization, and innovation, act as the major pillars for the company’s success. Known for being the manufacturer of the world, China attracted many low-cost producers and suppliers to its marketplace. Many buyers from different parts of the world joined in to benefit from the low wages in the industry. Since 2002 up to date, Alibaba Group has been performing well in the domestic market (Alibaba in Hong Kong Talks, par 4).

Why and how Alibaba becomes a success compared with other similar companies

Compared to its competitors, several factors contributed to the success of the Alibaba Group. First, the company was more focused on international businesses, and hence formulated strategies that were internationally-based. The international market for this organization was country-independent, making it easy for Second, unlike its competitors in the internet business, Alibaba Group had no problems in language. This is because the organization ensures that its people different languages for its employees early enough. The focus on growing international influenced the Alibaba Group to make this move, to be prepared in the foreign markets. This is because the organization’s membership base started communicating in the English language long enough before its arrival on the scene. This eased communication because the non-English individuals had been already aware of different languages (Alibaba 56). The third success factor that distinguishes Alibaba Group from its competitors is employing price, place, promotion and product (the four Ps of marketing strategies). These include price, place, promotion, and product/service.

The organization offers unique 24/7 services. These include online payments, instant messaging, and after-sales services among many others. The organization also employs different pricing strategies to gain a competitive edge. It employs marketing strategies to create brands, and hence gains a competitive edge. It employs internet websites as its distribution strategy which is cheap, fast, and efficient. This helps Alibaba Group to maximize profits and reduce costs. Sixth, the simple model of this organization enables a 24/7 operation. Seventh, compared with its competitors, Alibaba Group has a flexible organizational structure. For instance, the organization initially comprised of 5 subsidiaries. Since 2011, the company has reorganized its organizational structure more than three times (Barboza 34). It restructured Taobao into three affiliate entities three years ago, purposely to keep pace with the fast-growing Back to China (B2C) internet market (Chao par. 3). The flexibility in organizational structure differentiates the organization from its competitors and hence gains a competitive advantage.

Success in the stock market and data analysis

Alibaba Group has been showing success in the stock market and data analysis despite skeptics and fierce competition. The company employs scientific data analysts who use diverse techniques to inspect, clean, transform, and model data, with a focus on coming up with resourceful information. The organization employs multiple systems in data analysis such as shop system, order system, user system, and relevant middleware among others. These systems support all trade requirements of the organization. Alibaba Group continuously increases its volume of transactions in the marketplace. For instance, the organization is predicted to overtake Wal-Mart and become the world’s largest at the end of this year. It attracts many big stock exchange companies to invest in its e-commerce site, which is Alibaba.com. For instance, in 2009, Yahoo invested a lot in the e-commerce site of the Alibaba group (Kriegler par. 4). The New York Stock Exchange and the NASDAQ stock market, which are the two largest stock exchanges in the US, set in October 2013 to compete for the organization’s IPO (Dean and Laura 5). The sales of Alibaba Group exceed those of eBay and Amazon. It makes its offer of shares to the public, specifically in its potential markets, which are Hong Kong and the United States (Hamilton and Jinxuan 6). These confirm the success of the Alibaba Group in the stock market.

Works Cited

Alibaba. S.l.: General Books, 2010. Print.

Barboza, David. “China’s Alibaba Internet Company Splits E-Commerce Site Into 3 Units.” New York Times 2011: 5. Web.

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Chao, Loretta, and Shara Tibken. “Alibaba Regains Control.” Wall Street Journal – Eastern Edition 2012: B5. Web.

Chao, Loretta. “Alibaba Breaks Up E-Commerce Unit.” Wall Street Journal – Eastern Edition 2011: B2. Web.

Dean, Jason, and Laura Santini. “China’s Alibaba Plans IPO for Core Unit.” Wall Street Journal – Eastern Edition 2007: A16. Web.

Hamilton, Stewart, and Jinxuan Zhang. Doing Business with China: Avoiding the Pitfalls. Houndmills, Basingstoke, Hampshire: Palgrave Macmillan, 2012. Print.

Kriegler, Yun. “Freshfields And Wachtell Help Alibaba Buy Back Shares From Yahoo!.” Lawyer (Online Edition) (2012): 1. Web.

“Alibaba in Hong Kong Talks” Wall Street Journal – Eastern Edition 2013: C3. Web.

Wang, Helen H. The Chinese Dream: The Rise of the World’s Largest Middle Class and What It Means to You. S.l.: Bestseller Press, 2010. Print.

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Zheng, Mingxun. On Equal Terms: Redefining China’s Relationship with America and the West. Singapore: John Wiley & Sonss, 2011. Print.

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