UNIVERSITY INSTITUTE OF

INFORMATION TECHNOLOGY

CASE STUDY:

Submitted To:- Submitted

By:-
Er. Akshay Bhardwaj Akshay
chaudary(64009)
Ishant
Chouhan(
64042)

1
 Certificate

This is to certify that the case study on ERP Implementation in Cadbury aimed for E-
Commerce Laboratory was worked upon by the following individuals under my
supervision at UIIT labs in University Institute of Information Technology, Silver Wood
Estate Summerhill, Shimla.

Ishant Chouhan(64042)
Akshay Chaudary (64009)

It is certified that this case study is done by the team and has been submitted for their
degree curriculum.

Er. Akshay Bhardwaj

(Assistant Professor)
 Declaration

I hereby declare that the case study entitled “ERP Implementation in Cadbury “is an
original case study, submitted by us in fulfilment of requirements for the award of the
marks of Industrial/Vocational training of “Bachelor of Technology” for the 7 th Semester.
It has not been submitted elsewhere for the award of marks in any degree or diploma.

Ishant Chouhan (64042)

Akshay Chaudary (64009)
 Acknowledgement

We are highly grateful to our Director, Prof. P.L. Sharma, who gave us this opportunity and
always inspires us with his new motivated ideas.

It gives us immense pleasure to express our deep sense of gratitude to our esteemed
teachers of our Institute for their guidance and constant encouragement at every juncture
of present report work.

Every effort is motivated by an ambition and all ambitions have an inspiration. We owe our
deep sense of gratitude to all those who helped us in such a constructive work. It gives us
immense pleasure to express our sincere thanks to Er. Akshay Bhardwaj, our guide and
teacher for his effort to help us in every possible way.
 Sr. No. Topic Page No.

1 7-9
Introduction

Customer Relationship
2 10-15
Management (CRM)

3 Alibaba : Introduction 16-18

4 History 19-21

Alibaba’s Products And

5 22
Partnership

Easy To Do Business
6 23-24
Everywhere

7 Branding And Image 25-26

8 Business Model 27-29

9 Products And Services 30-31

10 Target Users 32-33

2
 Payment Methods 34-37
11

12 Revenue And Price Strategy 38

13 Target Market 39

Comparison Of Alibaba With

14 Other Techgiants 40-42

15 Promotion Strategy 43

16 44
Information Technology

17 45
Expected Market Growth

18 46
Future Strategic Actions

19 47
Discussion

20 48
Conclusion

21 49-50
References
The initials ERP originated as an extension of MRP (material requirements
planning; later manufacturing resource planning) and CIM (Computer Integrated
Manufacturing). It was introduced by research and analysis firm Gartner in 1990.
ERP systems now attempt to cover all core functions of an enterprise, regardless of
the organization's business or charter. These systems can now be found in non-
manufacturing businesses, non-profit organizations and governments.

To be considered an ERP system, a software package must provide the function of

at least two systems. For example, a software package that provides both payroll
and accounting functions could technically be considered an ERP software package

Examples of modules in an ERP which formerly would have been stand-alone

applications include: Product lifecycle management, Supply chain management
(e.g. Purchasing, Manufacturing and Distribution), Warehouse Management,
Customer Relationship Management (CRM), Sales Order Processing, Online Sales,
Financials, Human Resources, and Decision Support System.

Some organizations — typically those with sufficient in-house IT skills to integrate

multiple software products — choose to implement only portions of an ERP
system and develop an external interface to other ERP or stand-alone systems for
their other application needs. For example, one may choose to use human resource
management system from one vendor, and perform the integration between the
systems themselves.

This is common to retailers, where even a mid-sized retailer will have a discrete
Point-of-Sale (POS) product and financials application, then a series of specialized
applications to handle business requirements such as warehouse management, staff
rostering, merchandising and logistics.
Ideally, ERP delivers a single database that contains all data for the software
modules, which would include:
 Manufacturing Engineering, bills of material, scheduling, capacity,
workflow management, quality control, cost management, manufacturing
process, manufacturing projects, manufacturing flow

 Supply chain management Order to cash, inventory, order entry,

purchasing, product configurator, supply chain planning, supplier
scheduling, inspection of goods, claim processing, commission calculation

 Financials General ledger, cash management, accounts payable, accounts

receivable, fixed assets

 Project management Costing, billing, time and expense, performance units,

activity management

 Human resources Human resources, payroll, training, time and attendance,

rostering, benefits

 Customer relationship management - Sales and marketing, commissions,

service, customer contact and call center support

 Data warehouse - and various self-service interfaces for customers,

suppliers, and employees

 Access control - user privilege as per authority levels for process execution

 Customization - to meet the extension, addition, change in process flow

Enterprise resource planning is a term originally derived from manufacturing
resource planning (MRP II) that followed material requirements planning (MRP).
MRP evolved into ERP when "routings" became a major part of the software
architecture and a company's capacity planning activity also became a part of the
standard software activity. ERP systems typically handle the manufacturing,
logistics, distribution, inventory, shipping, invoicing, and accounting for a
company. ERP software can aid in the control of many business activities,
including sales, marketing, delivery, billing, production, inventory management,
quality management and human resource management.

ERP systems saw a large boost in sales in the 1990s as companies faced the Y2K
problem in their legacy systems. Many companies took this opportunity to replace
their legacy information systems with ERP systems. This rapid growth in sales was
followed by a slump in 1999, at which time most companies had already
implemented their Y2K solution.

ERPs are often incorrectly called back office systems indicating that customers and
the general public are not directly involved. This is contrasted with front office
systems like customer relationship management (CRM) systems that deal directly
with the customers, or the eBusiness systems such as eCommerce, eGovernment,
eTelecom, and eFinance, or supplier relationship management (SRM) systems.

ERPs are cross-functional and enterprise wide. All functional departments that are
involved in operations or production are integrated in one system. In addition to
manufacturing, warehousing, logistics, and information technology, this would
include accounting, human resources, marketing and strategic management.
ERP II, a term coined in the early 2000's, is often used to describe what would be
the next generation of ERP software. This new generation of software is web-
based, and allowed both internal employees, and external resources such as
suppliers and customers real-time access to the data stored within the system. ERP
II is also different in that the software can be made to fit the business, instead of
the business being made to fit the ERP software. As of 2009, many ERP solution
providers have incorporated these features into their current offerings.
EAS — Enterprise Application Suite is a new name for formerly developed ERP
systems which include (almost) all segments of business, using ordinary Internet
browsers as thin clients.

Best practices are incorporated into most ERP vendor's software packages. When
implementing an ERP system, organizations can choose between customizing the
software or modifying their business processes to the "best practice" function
delivered in the "out-of-the-box" version of the software.

Prior to ERP, software was developed to fit the processes of an individual business.
Due to the complexities of most ERP systems and the negative consequences of a
failed ERP implementation, most vendors have included "Best Practices" into their
software. These "Best Practices" are what the Vendor deems as the most efficient
way to carry out a particular business process in an Integrated Enterprise-Wide
system.

A study conducted by Lugwigshafen University of Applied Science surveyed 192

companies and concluded that companies which implemented industry best
practices decreased mission-critical project tasks such as configuration,
documentation, testing and training. In addition, the use of best practices reduced
over risk by 71% when compared to other software implementations.

The use of best practices can make complying with requirements such as IFRS,
Sarbanes-Oxley or Basel II easier. They can also help where the process is a
commodity such as electronic funds transfer. This is because the procedure of
capturing and reporting legislative or commodity content can be readily codified
within the ERP software, and then replicated with confidence across multiple
businesses who have the same business requirement.
Advantages of ERP

In the absence of an ERP system, a large manufacturer may find itself with many
software applications that cannot communicate or interface effectively with one
another. Tasks that need to interface with one another may involve:

 Integration among different functional areas to ensure proper

communication, productivity and efficiency

 Design engineering (how to best make the product)

 Order tracking, from acceptance through fulfillment

 The revenue cycle, from invoice through cash receipt

 Managing inter-dependencies of complex processes bill of materials.

 Tracking the three-way match between purchase orders (what was ordered),
inventory receipts (what arrived), and costing (what the vendor invoiced)

 The accounting for all of these tasks: tracking the revenue, cost and profit at
a granular level.

ERP Systems centralize the data in one place. Benefits of this include:

 Eliminates the problem of synchronizing changes between multiple systems

 Permits control of business processes that cross functional boundaries

 Provides top-down view of the enterprise (no "islands of information")

 Reduces the risk of loss of sensitive data by consolidating multiple

permissions and security models into a single structure.
Some security features are included within an ERP system to protect against both
outsider crime, such as industrial espionage, and insider crime, such as
embezzlement. A data-tampering scenario, for example, might involve a
disgruntled employee intentionally modifying prices to below-the-breakeven point
in order to attempt to interfere with the company's profit or other sabotage.
ERP systems typically provide functionality for implementing internal controls to
prevent actions of this kind. ERP vendors are also moving toward better integration
with other kinds of information security tools.

Disadvantages of ERP

Problems with ERP systems are mainly due to inadequate investment in ongoing
training for the involved IT personnel - including those implementing and testing
changes - as well as a lack of corporate policy protecting the integrity of the data in
the ERP systems and the ways in which it is used.

Disadvantages

 Customization of the ERP software is limited.

 Re-engineering of business processes to fit the "industry standard"

prescribed by the ERP system may lead to a loss of competitive advantage.

 ERP systems can be very expensive (This has led to a new category of "ERP
light" {Expand section} solutions)

 ERPs are often seen as too rigid and too difficult to adapt to the specific
workflow and business process of some companies—this is cited as one of
the main causes of their failure.

 Many of the integrated links need high accuracy in other applications to

work effectively. A company can achieve minimum standards, then over
time "dirty data" will reduce the reliability of some applications.
 Once a system is established, switching costs are very high for any one of
the partners (reducing flexibility and strategic control at the corporate level).

 The blurring of company boundaries can cause problems in accountability,

lines of responsibility, and employee morale.

 Resistance in sharing sensitive internal information between departments

can reduce the effectiveness of the software.

 Some large organizations may have multiple departments with separate,

independent resources, missions, chains-of-command etc. and consolidation
into a single enterprise may yield limited benefits.
 The system may be too complex measured against the actual needs of the
customers.

 ERP Systems centralize the data in one place. This can increase the risk of
loss of sensitive information in the event of a security breach.
Once you have a defined idea of who your users are, it’s important to then look at
which actions they take, and why those are important to your business. Actions are
defined as a behaviour that brings value to your company. This could be anything
from subscribing to a newsletter, to purchasing a product or writing a review on
your site.

It all comes down to knowing your audience, who you’re trying to convert, and
retain. Users for an e-commerce-based site for example would have purchasers as
one type of user – their action would be to purchase. However you could also have
an e-commerce site that requires its users to sign up in order to purchase, so
members (the user type) would have two actions: registering, and purchasing. This
user and action relationship is something you can measure and infer upon as well
as use as the basis of your retention strategies.

Once you have an idea of your user base, and what actions they possess, you can
then start to analyze them with various metrics.

6 KEY METRICS FOR MEASURING SUCCESS

When it comes to customer retention – what’s the measurement for improvement?
You can’t just “think” or “feel”, you have to have the data to back it up. Statements like
“I think have more users on the site” or “people feel better about this part of
the site” don’t come from successful e-commerce businesses. Turn away from
feelings, and turn towards concrete data to make smart and educated decisions.

This is where measuring the data from your site comes into play. All metrics are
important, however some are more important for e-commerce-based businesses
as opposed to Subscription based. There are many different ways to measure your
site’s performance, and below we’re going to cover six critical metrics for e-
commerce and customer retention. 1. Engaged Users
2. Repeat vs. First Time
3. Time between Actions
4. Repeat Action
5. Cohort Analysis
6. Lifetime Value of a Customer (LTV)
Customer relationship management (CRM) is a term that refers to practices,
strategies and technologies that companies use to manage and analyze customer
interactions and data throughout the customer lifecycle, with the goal of improving
business relationships with customers, assisting in customer retention and driving
sales growth. CRM systems are designed to compile information on customers
across different channels -- or points of contact between the customer and the
company -- which could include the company's website, telephone, live chat, direct
mail, marketing materials and social media. CRM systems can also give customer-
facing staff detailed information on customers' personal information, purchase
history, buying preferences and concerns.

CRM software consolidates customer information and documents into a single

CRM database so business users can more easily access and manage it. The other
main functions of this software include recording various customer interactions
(over email, phone calls, social media or other channels, depending on system
capabilities), automating various workflow processes such as tasks, calendars and
alerts, and giving managers the ability to track performance and productivity
based on information logged within the system.

Common features of CRM software include:

CRM SOFTWARE

• Marketing automation: CRM tools with marketing automation capabilities can

automate repetitive tasks to enhance marketing efforts to customers at different
points in the lifecycle. For example, as sales prospects come into the system, the
system might automatically send them marketing materials, typically via email or
social media, with the goal of turning a sales lead into a full-fledged customer.

• Sales force automation: Also known as sales force management, sales force
automation is meant to prevent duplicate efforts between a salesperson and a
customer. A CRM system can help achieve this by automatically tracking all
contact and follow-ups between both sides.
• Contact center automation: Designed to reduce tedious aspects of a contact
center agent's job, contact center automation might include pre-recorded audio
that assists in customer problem-solving and information dissemination.
Various software tools that integrate with the agent's desktop tools can handle
customer requests in order to cut down the time of calls and simplify customer
service processes.

• Geolocation technology, or location-based services: Some CRM systems

include technology that can create geographic marketing campaigns based on
customers' physical locations, sometimes integrating with popular location-
based GPS apps. Geolocation technology can also be used as a networking or
contact management tool in order to find sales prospects based on location.
THE CRM TECHNOLOGY MARKET

The four main vendors of CRM systems are Salesforce.com, Microsoft, SAP and
Oracle. Other providers are popular among small- to mid-market businesses, but
these four tend to be the choice of large corporations.

With cloud-based CRM -- also known as SaaS (software-as-a-service) or on-demand

CRM -- data is stored on an external, remote network that employees can access
anytime, anywhere there is an Internet connection, sometimes with a third-party
service provider overseeing installation and maintenance. The cloud's quick,
relatively easy deployment capabilities appeals to companies with limited
technological expertise or resources. Companies might consider cloud-based CRM
as a more cost-effective option. Vendors such as Salesforce.com charge by the user
on a subscription basis and give the option of monthly or yearly payments.

Data security is a primary concern for companies using a cloud-based system since
the company doesn't physically control the storage and maintenance of its data. If
the cloud provider goes out of business or is acquired by another company, a
company's data can be compromised or lost. Compatibility issues can also arise
when data is initially migrated from a company's previous system to the cloud.
Finally, cost may be a concern, since paying subscription fees for software can be
more costly than onpremises-based models.
Open source CRM programs make source code available to the public, allowing
companies to make alterations with no cost to the company employing it. Open source
CRM systems also allow the addition and customization of data links to social media
channels, assisting companies looking to improve social CRM practices. Vendors such
as SugarCRM are popular choices in the open source market.
Adoption of any of these CRM deployment methods depends on a company's
business needs, resources and goals, since each has different costs associated with
it.

TRENDS
Traditionally, data intake practices for CRM systems have been the responsibility of
sales and marketing departments as well as contact center agents. Sales and
marketing teams procure leads and update the system with information
throughout the customer lifecycle and contact centers gather data and revise
customer history records through service call and technical support interactions.

Social CRM refers to businesses engaging customers directly through social media
platforms such as Facebook, Twitter and LinkedIn. Social media presents an open
forum for customers to share experiences with a brand, whether they're airing
grievances or promoting products.

TOP 5 CUSTOMER RELATIONSHIP MANAGEMENT TOOLS

Improve customer support with customer relationship management tools
You may have seen the term “CRM” bandied
about on blogs and technology sites and
wondered what it means. The term stands for
“customer relationship management,” and it’s a
hot topic for small businesses. CRM is all about
improving contacts with existing and future
customers. It runs from a sales office fielding
calls from potential customers, through to
scheduling sales meetings, and on to customer
service and technical support after a
sale.
Maintaining an office just for customer support is
an expensive luxury that most small businesses just can’t afford. However, more and
better customer relationship management tools are now becoming available to
reduce the complexity of this field of business to the point where an existing small
team can integrate CRM functions into its usual work schedule. This review
examines the top five customer relationship management tools currently on the
market.

1) Zendesk
One of the main benefits of customer relationship management tools is that they
enable you to focus all the contact channels customers may use to contact you in
one dashboard. You centralize information gathered by different team members
during customer contact, share any pertinent information, and enable the
customer to feel recognized. There is nothing more annoying than calling a
company, getting transferred to different people, and having to explain your needs
all over again. Zendesk helps keep your team informed regarding contact with
customers made by other team members. Therefore, it helps reduce repetition of
effort and improves response times to customer queries through workflow
scheduling. This customer relationship management tool is cloud based, so you
don’t have to install any complicated software, and your team members can access
the system from home or while on the move

2) Get Satisfaction
Zendesk includes a customer self-service module to help reduce the demands on
your technical support team, but Get Satisfaction takes this concept one step
further by fostering the creation of customer communities. This is like having a
Facebook specifically dedicated to your company, its products, and its customers.
You encourage customers to check out the community when they first visit your
website. This has the benefit of getting existing customers to guide potential clients
on the value and usage of your products. People naturally resist sales pitches, so
being able to talk to existing customers gives first-time visitors the courage to buy.
The community ethos carries through the customer life cycle, enabling customers
to advise each other about how to install and exploit your products to their full
potential. Customers having trouble with a purchase can use the community for
technical advice as well.

3) SurveyMonkey
SurveyMonkey is the world’s leading online survey platform. It includes access to
millions of respondents in the world population, which enables you to research the
appeal of your products while they are under development. However, surveys and
questionnaires are also key tools in CRM, and you can use SurveyMonkey as a
customer relationship management tool. Customer feedback is a key input to
improving your services. People are sometimes reluctant to complain if they
received poor service, but they will tell their friends, meaning you will lose
potential customers without realizing your company is doing anything wrong.
Prompting customers for feedback, especially those that chose not to buy, will help
you highlight and fix weaknesses in your business’s customer services.

4) Casengo
Casengo is a lot like Zendesk, but it’s a lot cheaper. It can be difficult to choose
between these two customer relationship management tools, but fortunately, both
offer a 30day free trial, so whether you choose Casengo or Zendesk may just come
down to which of the two you feel more comfortable using. Like Zendesk, Casengo
centralizes customer contact channels and provides a central store for records of
contact events. Casengo also has a customer self-service module. Both Casengo and
Zendesk have a free version with limited functionality. The free version of Casengo
only allows you to monitor chatbased contacts with customers. The free version of
Zendesk only covers email contact. Casengo is based in Amsterdam,in the
Netherlands, so its tariff is priced in Euros, not US dollars. Casengo’s basic paid plan
costs €9 per user per month, whereas Zendesk’s cheapest paid package costs US $25
per user, per month. Casengo offers a free trial of any of its packages, but Zendesk’s
free trial offers its mid-range package, which retails at US $59 per user per month. The
equivalent package at Casengo costs €29 per user, per month.

5) Deskero
The distinguishing feature of Deskero is that it integrates with Facebook, Twitter,
Google+, LinkedIn, and YouTube. So if you focus your marketing efforts on social
media, it’ll probably be the most appropriate customer relationship management tool
you could choose. The Deskero presentation specifically refers to the system as Help
Desk software, so they don’t aim to fulfill all CRM functions, such as pre-sales and
sales force support. Deskero has four different price packages, the cheapest of which
is free. The free version allows for only one user and integrates with just one social
media platform. The cheapest paid package costs US $15 per user per month and can
be integrated with accounts on all five of the social media platforms that Deskero
supports. Your help desk webpages are hosted on a subdomain of the
Deskero site. Although Deskero’s user interface comes as a standard series of
pages, these can be customized to reflect the look and feel of your main website.

Prioritize customer support

Customer relationship management tools enable you to quickly and cheaply offer
online customer support, without the need to outsource services to a call center.
Whether you expect to get customer approaches via the telephone, through a chat
screen on your website, or via email will dictate which of the CRM tools listed in
this review work best for your enterprise. Fortunately, all these tools offer trial
periods or free versions, so log in to each, and play around with their systems to
decide which customer relationship management tool is right for you.
A marketplace, a search engine and a bank, all in one.
Alibaba.com is currently the hottest topic of discussion among investors because it
has proven to be one of the world leading B2B e-commerce corporations in China. It
makes it simple for everyone to buy or sell anything online anywhere in the world.
Alibaba Group was founded in 1999 at HangZhou by Yun Ma (Jack Ma), who
aspired to help make the internet reachable, trustworthy and useful for everyone.

Alibaba Group has total of seven business group namely Alibaba Small Business
Operations, Taobao, Tmall, Alibaba International Business Operations, Juhuasuan,
eTao and Alibaba Cloud Computing (Alibaba.com, 2014). Over the past decade, two
of the subsidiaries include Taobao and Tmall have profoundly assisted Alibaba
Group Holding Ltd in growing tremendously.

One can think of it as a mix of Amazon.com, eBay and Paypal. Customers use
Alibaba to shop online, sell unwanted goods and make online payments. Alibaba
has two retail sites: Taobao, which features thousands of nonbrand name products
sold by smaller merchants; and Tmall, which offers brandname products sold by big
merchants.
Unlike Amazon, which buys goods from suppliers and sells them to customers,
Alibaba has always acted as a middleman, connecting buyers and sellers and
facilitating transactions between them.

This Chinese B2B trading platform connects buyers in North America and Europe
with suppliers from China. Alibaba follows an aggregation of supply model (similar
to other early B2B players), helping to solve the pain of global sourcing.

Alibaba.com is a truly global network for importers and exporters of raw materials,
component parts and finished goods and it is shown in fig 1.2

Fig 1.2: Global Network at Your Fingertips

Alibaba Group Holding Ltd is now the major Global Electronic Marketplace (GEM) in
the world in terms of its broadly participated users. Jack Ma was formerly just a
teacher but due to the recent success of Alibaba Group is now among the richest
man in China. Alibaba operates a leading e-Commerce business and mobile
marketplace in retail and wholesale trade as well as other services such as
providing a platform which enables consumers, merchants and other participants to
conduct business in their network. The key stakeholders in the company include
Yahoo and Japan’s Softbank.

According to latest Forbes news, Jack Ma is the first Mainland Chinese entrepreneur
that manages to be on the cover of Forbes (Chen, Solomon & Mac, 2014). Alibaba now
runs both markets domestically and internationally. The international marketplace
(www.alibaba.com) focuses on global network for buyers and supplies
for raw material, components, and finished goods whereas the domestic
marketplace (www.alibaba.com.cn) focuses suppliers and buyers mainly in China.
Together, its market consists of 30 over million active users from over 240 countries
all over the world (Alibaba.com, 2014). According to Timothy Leong, Alibaba has
only 18 employees in 1999 and their office was at Jack Ma’s apartment. However, it
grew into more than 20,000 employees last year with offices in few countries. In
2004, Alipay was launch and it sets a record for the highest number of a single-day
transaction in 2012 (Leong, 2013).

Fig: Alibaba Vision

Alibaba’s overall mission and goal is to build a strong and profitable customer
connection. The marketing strategy of Alibaba plays an important role in achieving
the overall strategic plan. How did Alibaba achieve its success? The answer is
through market segmentation or target market, marketing mix that made up of
factors under its control such as product, price, location, and promotion. Alibaba
has put in marketing analysis and planning to find its best marketing mix. Through
these activities, Alibaba has won a long-term relationship from its suppliers and
buyers that profit to the company.
Alibaba Group was established in 1999 by 18 people led by Jack Ma, a former
English teacher from Hangzhou, China. From the outset, the company’s founders
shared a belief that the Internet would level the playing field by enabling small
enterprises to leverage innovation and technology to grow and compete more
effectively in the domestic and global economies.

Jack Ma named his company on “Alibaba Open Sesame”. Alibaba is a kind, smart
business person, and he helped the village. Alibaba opens sesame for small to
medium sized companies.
Alibaba Group Holding Ltd’s development can be divided into 5 phases for the past
13 years. The first phase was started since 1998 until 2001. During this phase,
Alibaba provides free information for suppliers to enter the market. At that
moment, China’s trade market was still in the early stage where only information
flowed on the Internet. Jack Ma looked into the needs of SMEs in China in entering
the B2B e-market by providing them with free online services and information
according to the different enterprises and the characteristics of the industries. In
2000, Porter Erisman, now the Vice President of Alibaba was hired by CEO Jack Ma
as a foreign expert to help the company into globalization. During that time,
attracting foreign experts to run the company is essential because people in China
had very little management experiences (Walraven, 2009).

The second phases was during the year 2002 whereby Alibaba invented a
trustworthy credit certification named Trustpass in order for consumers to
purchase without any concern over fraud and deceit as the credit has been the
biggest problem in China’s etrading development. This method for credit
authentication has helped Alibaba in generating more and more profits because
many SMEs started to use Trustpass services in the e-trade market. During this
period, the Internet penetration in China started to increase and the total export
volume grow vastly. Buyers from all over the world lined up to profit from the low
cost products (Walraven, 2009).

The third phase occurred around 2004 when Alibaba started to develop overseas
market to expand the market of e-trade. China suppliers help international
enterprises to construct their own website and independent accounts in order for
consumers to access their business information more rapidly. This helped
enterprises to create more business opportunities and higher profit income.
Moreover, Alibaba launched Taobao which now became the largest online
shopping marketplace, overtaking US eBay. Alibaba has also launched Alimama,
the largest online advertising platform for business purpose and Alipay, China’s
leading online payment service, which was approved by the China government.

The fourth stage occurs between 2005 and 2007. Yahoo China was taken over by
Alibaba whereby all the transaction operations are controlled by Alibaba solely.
This creates a new e-trade search engine after Alibaba established its own system
at www.yahoo.com. Alibaba has started to grow broader and provide larger
communication space for e-trade business all over the world.
 The fifth phases happened since 2008 until now. Alibaba opened up an office
respectively in Taiwan and Switzerland. In this period, B2C (“business to customer’)
market was lagging far behind B2B (“business to business”) and C2C (customer to
customer”). Therefore, Alibaba adjusted its marketing strategy to enter B2C e-trade
market more easily. Now, the total number of registered users has grown significantly,
revenue and profits raise rapidly. According to Alibaba’s annual report, in 2010 the total
users, revenue and paying members risen to 61.8 million, RMB ￥ 5.5576 billion and
809,362 respectively (Alibabagroup.com, 2014). Furthermore, the mobile application for
Taobao was launched in 2010. In fact, Alibaba also officially launches the AliExpress for
exporters in China to directly reach out to their consumers around the world.
 Alibaba has few virtual products that develop a convenient and prompt
management for exporters to update or upload important information freely into
the database in order to contact buyers directly from overseas. Alibaba also
provides multi-functional management system such as products display
descriptions and photos according to the categories, which are available in many
other e-trade marketplaces. In other words, they practically own a “mini website”
which carries their company profiles, contact information, and a virtual showroom
of their products and services. On the other hand, buyers can search any products
they want via the search engine of an extensive database that gives a variety of
products ranging from electronics to computers and automobiles. Almost every
possible segment is included (Chen, Solomon & Mac, 2014). Above and beyond,
registered users have the privilege to subscribe to trade alerts send to buyers on
their selected suppliers.
Alibaba’s has their support from its biggest shareholders-Softbank Corp, a Japanese
mobile company that holds 36.7% of shares while Yahoo Inc. holds a 24% stake.
Softbank Corp has started to invest in Alibaba since 2000 when they saw potential
in them. Yahoo was once the largest shareholder in Alibaba but shortly after that
Alibaba bought backs some of its own share.

Figure 3.1: Acquisitions & Partnerships: 2010 to 2014 – By Business Category

Clearly, Alibaba’s Group mission is to make it easy to do business everywhere. Before
this company came along, sales channels are very inadequate for local SMEs in China.
Trade exhibitions that are conducted to introduce and demonstrate the latest products
for more opportunities were very costly. There are very limited customers that the
sales team could reach out at that moment. However, many SMEs are seeking for
business opportunities and growth since the economic reform of Reform and Open
policy that opens up the investment to foreign country (Tisdell, 2009). Therefore, the
technology provided by Alibaba has given SMEs in China huge advantages and
benefits. First of all, China has no geographical constraint that gives China SMEs a huge
market of ecommerce. Next, the well set up e-commerce environment helped the
transaction cost to go down sharply. On the other hand, the e-commerce business
platform is also incorporate into the regular business cycle and give suppliers and
buyers more accurate and relevant information that ever before. In a nutshell,
Alibaba’s e-commerce technology has made it so much convenient to SMEs to conduct
their business anywhere in the world efficiently.

Fig 4.1: Alibaba.com’s Growth: a SME Innovation Story

SME: Small and Medium Sized Enterprises IPO: Initial Public Offering.
According to BBC, the total value of merchandise sold in Alibaba in 2013 was far
more than Amazon and eBay combined. Alibaba has a clear mission which is to
make it easier to do business across the world because it insists that customers
come first, company second and shareholder third. Today, customer is far more
powerful than others (McGovern, 2014). Besides providing free of charge online e-
commerce platform to both clients and consumers, Alibaba also brings in pay-per-
click (PPC) ad campaign in order for suppliers to build their business (Yang, 2010).
By adding up together all the interested suppliers in various Trade Fair, Alibaba has
largely reduced the cost of each supplier. At the same time, Alibaba also helped
evaluate market data for suppliers to better forecast their own business demand.
This allows them to charge a small fee to the suppliers that are more than willing to
pay at a discount price as the need for marketing and sales from millions of
suppliers together. This has made Alibaba successfully in capture the value shaped
to the sellers who are price sensitive but less demanding of the service quality.
Alibaba also argues that developing a good strategy is not easy as we think
especially in such a fast changing world. Therefore, its mission is about making
business easy for everyone (McGovern, 2014).
When it comes to establishing strong image branding, many China companies face the
same problem as foreigner partners find it hard to remember the name. Jack Ma
chose the name Alibaba firstly because it is easily pronounced and spell in many
languages. Because of its clear-cut syllables, it helped to raise the brand awareness.
Secondly, it is because of the famous fairy tale named Ali Baba, a character from the
movie of “One Thousand and One Nights” that uses the secret code “Open Sesame” to
enter the cave overflowing with hidden treasures and gold. When it comes to
business, it associates to Alibaba Company that opens a gateway for wealth. The
success of Alibaba deciding the right name for one’s enterprise is important.

Alibaba Group climbed into the top 10 of the world’s most-valuable technology
brands, garnering the No. 8 slot in Brand Finance’s 2017 survey.
The Hangzhou-based e-commerce giant climbed four notches from a year earlier
and is in elite company with brands that include Google, Apple, Amazon and
Microsoft. Its brand value surged 94% to $34.86 billion from the 2016 league table,
and has a strong brand rating of AA+, on a scale where AAA+ is the highest, the
Brand Finance report said.

“Alibaba has created a fair and open portal for small businesses and enterprises. Its
success stems from the opportunities to both open up and simplify commerce for
Chinese communities, particularly rural ones,” the Brand Finance report said. “Its
service has clearly underpinned brand value growth at home, but in order to
accelerate growth abroad by aiding brand recognition, it is investing in marketing
communications including joining McDonald’s, Coca-Cola and Visa as a major
sponsor of the Olympics Games.”

Google unseated Apple for the highest brand value of $109 billion in the 2017
report. Apple had held the top slot for five years.

Brand Finance, a London-based consulting company, issues its brand-value report

annually. The consultancy’s report attaches a value to brands by estimating future
sales attributable to that brand and setting a rate it believes the brand could charge
for royalties. It uses multiple inputs and then outputs a dollar figure, along with a
letter grade for brand value and a Brand Strength Index (BSI) score on a scale of 0
to 100, benchmarked against competing brands. Alibaba’s BSI score rose 3.3% this
year.

Overall, Chinese companies fared well in the Brand Finance league tables, with
Huawei holding steady at number 10, while seeing a 28% rise in its brand value,
now around $25.88 billion. Tencent, and its WeChat brand, both placed among the
top-10 BSI scores for 2017.

“Many of these Chinese tech titans were virtually unknown just a few years ago
and some are barely known about side their home market today, but are making
waves financially and building brands that are rapidly gaining traction outside
China.” An earlier report from Brand Finance found a correlation between a
brand’s strength and the performance of its share price.
The initial business model of Alibaba was simple ; A 24/7 meeting platform for
suppliers and buyers around the world. From the start Alibaba did not just connect
Chinese suppliers with international buyers, but it had the goal of connecting all
importers and exporters around the world to each other. Although other B2B
websites have always said “You cannot have a global company out of china, it
makes no sense.”. From the very beginning Alibaba was , “the first global Internet
emerging from china.”

In more technical terms three of the most prominent business models employed
by Alibaba are: B2B, C2C and B2C.

B2B:
Alibaba.com Limited the primary company of Alibaba, is the world’s largest online
Business to business trading platform for small businesses. Founded in Hangzhou
in eastern China, Alibaba.com has three main services. The company’s English
language portal Alibaba.com handles sales between importers and exporters from
more than 240 countries and regions. The Chinese portal 1688.com was developed
for domestic business to business trade in China. In addition, Alibaba.com offers a
transaction based retail website, AliExpress.com, which allows smaller buyers to
buy small quantities of goods at wholesale prices.

Fig : Alibaba Group B2B Eco System

According to some ecommerce analysts, Alibaba is probably the one organization
in the world, which has been able to successfully provide a hassle free platform too
small to medium sized businesses to carry on over the internet.

C2C:
Taobao, is Alibaba’s yet another portal, which utilizes consumer to consumer
model similar to eBay. Taobao.com is China's largest shopping website, and
tmall.com, which offers a wide selection of branded goods to China's emerging
middle class. It features thousands of nonbrand name products sold by smaller
merchants, With around 760 million product listings as of March 2013, Taobao
Marketplace is one of the world’s top 10 most visited websites according to Alexa.

B2C:
In 2008, Alibaba Group also established another online website Tmall, to
compliment it’s C2C market. Although Tmall is mainly a business to consumer
platform is known for offering brandname products. The two sites (Taobao.com
and Tmall) are hugely popular, and collectively account for more than half of all
parcel deliveries in China. According to The Wall Street Journal, their combined
transaction volume in 2012 topped one trillion yuan ($163 billion), more than
Amazon and eBay's revenue combined.

Tmall marketplace is China’s largest business to consumer (B2C) online shopping

venue. The site allows visitors to quickly view vendor fees, required deposits and
other factors associated with operating a Tmall storefront.
STRATEGY MAP Alibaba Group Business:

Ranking of Ablibaba Group Business Model:

Alibaba provide services such as establishing forums, blogs, and user groups at its
Alibaba website to offer a platform for customers to communicate and gather
feedbacks according to their interest. Forums are established at ablibaba.com and
taobao.com. This service has made communication more effective and convenient to
all consumers. Alibaba also provides its clients with communication tools such as
Alitalk, Taobao Wangwang, and Yahoo Message for customers to conduct business
discussions at anytime among themselves. Moreover, with these communication
tools, clients are able to get hold of updated information of supply and demand right
away. Users in Alibaba can also communicate with trading partners in real time via
Trade Manager in Alibaba. This platform has made communication two-way and more
genuine to consumers. In addition, Alibaba has different membership package which is
appropriate for each users and the features and services they require

Alibaba provides a wide variety of products and services through its various online
portals. Some of these are:

Apparel, Textiles & Accessories

Auto & Transportation

Electronics

Electrical Equipment , Components & Telecom

Gift, Sports & Toys

Health & Beauty

Home , Lights & Construction

Jewelry, Bags & Shoes

Machinery, Hardware & Tool

Metallurgy, Chemicals, Rubber & Plastics

Packaging, Advertising & Office

Online marketing

Cloud Computing
 
Logistics Operations

Electronic Payment Services

Alibaba is one of those online resources which claims a “Get everything and
anything” availability. A consumer can literally buy products ranging to simple toys
to automobiles. Hence, Alibaba is proving to be a onestop platform where a
consumer can choose among a wide variety of options.
Alibaba Group primarily operated within China, where ecommerce is synonyms to
Alibaba. But within last decade Alibaba has expanded to almost all the corners of
the world, consisting its user base from about 200 odd countries.

Alibaba has been turned into a global organization but still holding China as it’s
major focus. Almost 75% of China’s ecommerce market is dominated by Alibaba.
China has 560 million internet users twice as many as the U.S. who spend an
average of 20 hours a week online.
Fig: Alibaba International Marketplace

Although to get a hold on other emerging markets Alibaba Group has also
established offices in the U.S., U.K., India, Japan and Korea. Apart from small to
medium businesses Alibaba group also provides online platform to individual
customers through its parent websites Tmall.com and Taobao.com.
 Alibaba develop a payment instrument named Alipay in China which contributed a
part of the success of Alibaba. Before the emergence of Alipay, many sellers felt
insecure to ship goods to the buyer due to many reasons until the buyers has clear
off the payment. However, when Alipay has been introduced in Alibaba, this credit
system has been very much lessens the risk of e-transactions and ease buyers and
sellers concern upon failure of delivery or delivery of fake and damaged products.

Alibaba has not only introduce Alipay but also focus very much on the sound
evaluation system, in which both sellers and buyers can give feedbacks and
comments on the business transactions that will appear on each other’s website,
hence providing a better and clearer references for their next business partner
(Junsheng, 2014). Feedbacks are very important in a business world because it
helps to reduce dishonest business behaviour and make transaction more
transparent and reliable.

Alibaba online payment is secured with Escrow for international SMEs, which
protect the privacy of the buyers and buyers who are able to pay securely without
exposing their personal details (UKessays.com, 2014) Other than that, Alibaba also
offers many ways to pay suppliers. Six most commonly used ways are Telegraphic
Transfer(TT)/Bank Transfer, Letter of Credit, DA/DP, Western Union, PayPal and
Escrow. Buyers are advised to consider each option carefully before committing to
one.

S.NO Methods Conditions Description

For buyers: 2.5 out of Since many factories need money in advance to
buy material for production, 30% Upfront TT is
5 stars
1 30% Upfront TT a common payment term for suppliers,
For suppliers: 4.5 out
especially when dealing with an unknown
of 5 stars
buyer.
 production starts. This payment method bears
stars
2 100% Upfront TT the same risk as Western Union and is not
For suppliers: 5 out
recommended when dealing with an unknown
of 5 stars
supplier.

If being paid after pre-shipment inspections,

it is suggested to use trade terms of FOB. If
For buyers: 4.5 out being paid after receipt of merchandise, it is
100% Backward of 5 stars nearly 100% reliable for buyer cause buyer
3
TT For suppliers: 2 out can cover the whole risk, however, on the
of 5 stars opposite, suppliers are not willing to accept
this way due to big potential risk of dispute
or fraud.

Highly recommended for transactions that are

For buyers: 4 out of US $20,000 and above because the bank
5 stars guarantees the transaction. But complex
4 Letter of Credit
For suppliers: 4 out procedures and high threshold of registered
of 5 stars finance may prevent some SMEs from being
involved.

For buyers: 0 out of Not recommended when it comes to paying

5 stars suppliers if the payment is not protected by
For suppliers: escrow on a transaction made online through
5 Western Union 5 AliExpress. However, it's useful when
out of 5 stars transferring money to known individuals such
as family members.

A popular payment method for buyers as it

For buyers: 5 out of presents a much lower risk to them.
5 stars However, it is less popular with suppliers due
6 Paypal
For suppliers: 3 out to difficulties in money withdrawal, high tax
of 5 stars rates and uncertain claim of charge back from
some notorious importers.
 Money is only paid to the supplier after the
For buyers: 5 out of
buyer confirms satisfactory delivery of his/her
5 stars
7 Escrow order. A safe way to buying and selling online For suppliers: 3 out
because Escrow protects both the buyer and
of 5 stars
supplier.

In terms of innovation, Alibaba is introducing a new secure mobile payment method as it

gets ready for its IPO. The Chinese ecommerce giant will get ahead of its competitors
Amazon, Google and Paypal with an innovative and secure method of payment using
fingerprints instead of passwords.

“The biometric technology, including encryption and authentication managed by

Huawei, will allow mobile users to confirm payments for a wide variety of goods and
services with their smartphones simply by swiping a digit instead of entering a lengthy
code,” the company says on its blog.

Huawei, the world’s third largest smartphone vendor by shipment volume, will also
employ high level encryption and verification to ensure only approved third party
applications, such as Alipay Wallet, are allowed to access the fingerprint information for
transactions.

It’s worth remembering that Alibaba is a pretty safe platform to purchase on. Not only
do you have the standard protection that your payment provide gives, but alibaba hold
mostly all payments in Escrow until the buyer confirms they’ve received the goods and
they’re as expected.

Until the buyer confirms receipt the seller doesn’t receive the funds. Alibaba also
offers some tips for shipping methods:

• Using express companies such as FedEx or DHL

You can open the shipment in front of the delivery person. If the item is not what you
ordered or if the item is defective due to handling, you have the right to return it to the
delivery person.
 • Using sea freight shipping method

If the item that you received is not what you ordered, do not clear customs! You can
always request for a customs officer or a third party Inspection company to conduct an
onsite inspection before being issued a customs clearance certificate. If you only
inspect the delivery after customs clearance, you might encounter legal hurdles should
you decide to dispute the delivery.
Alibaba provides free membership from the beginning to attract clients its way to etrade
market that became the core competency and contributing to more business
opportunity in Alibaba. After a big number of registered clients at Alibaba, it began to
charge membership fees. Alibaba earn profits by two major aspects. The primary
revenue came from advertising fees from Alibaba. The second source of revenue comes
from customers for value-added services, listing fees as well as membership fees.
Furthermore, Alipay also began to collect technical service charge from business
transaction that take place outside of Taobao and Alibaba (You Fei, 2012).

Alibaba uses a competition pricing in setting the price of a product in comparison with its
competitors. It uses the price that does not have extreme differences with its competitors
and provides the cheapest prices with good quality to attract its target market. Due to
Alibaba's dominant market position in ecommerce, Alipay has emerged as the online
payment processing leader in China and it clears 80 million transactions per day, including
45 million transactions through its Alipay Wallet mobile app (Shih, 2014).

Next, Alibaba provides products within the same range with different prices depending on
the suppliers to offer buyers a wider choice of variety. Penetration pricing is one of the
marketing strategies that Alibaba implies to set a low price in order to increase sales and
market share. Furthermore, Alibaba also bring into play discount to stimulate the sales as
well as retaining their customers. Discounts are given provided that the customers buy
products in bulk or during festival. Buy one free one is the best method used by suppliers to
attract customers. Last but not least, value-added services are applied whereby product is
offered at a cheap price but services such as shipping, instant delivery, guarantees,
warranties and many more are added up to make sure that the total cost of the products
with added services is higher than the production cost in order to make profit
(UKessays.com, 2014). By December 31, 2013, Alibaba has generated revenue of RMB40.5
billion and net income of RMB17.7 billion. Its fiscal year ends on March 3.
Alibaba target two marketplaces which include the global marketplace based in English
Language that cater to international exporters and importers and the China
marketplaces whose aim is to focus on suppliers and buyers trading locally in China.

China is by far the largest Internet marketplace in the world with double the size of U.S
market. There are 560 million Internet users spending 20 hours a week online. Notably,
China is skipping with the traditional retailing and in favour of the e-retailing. These two
marketplaces are collectively the most- visited B2B website on the Internet. Alibaba also
target on small and medium-sized private enterprises and individual businessmen,
which have great potential in succeeding in the e-trade. In order to get a huge portion of
market share, Alibaba has localized the e-trade services by developing websites that
locate to different languages and modify their design and layouts, which suits the local
cultural in overseas. For example, English website is target to buyers from oversea in
general while Chinese website targets China traders and Japanese website aims at the
Japanese market. Alibaba has also creates Korean and Spanish language website in order
to expand its market in different regions and to achieve highest profit and goals.
All these play an important role in Alibaba’s global success.
Alibaba is really a technology company that serves retail customers and controls 80% of
the Chinese ecommerce market. Alibaba will compete most directly with online retailers
like Amazon, EBay or Zalando in Europe, Rakuten in Japan, Kobo in India, Wuaki in Spain
and other major online providers with strong presence in their home and adjacent
markets.

Take market capitalization, or the total value of available shares times the value of a
single share , Alibaba’s market capitalization value is estimated at $155 billion. That
number makes it look pretty small compared to the top three US tech giants: Apple
($593 billion), Google ($400 billion), and Microsoft ($378 Billion). But it compares nicely
to Amazon, which also has a market cap in the $150billion range. And it’s growing.

The comparison is not exactly apples to apples. Alibaba’s business model is similar to
that of Ebay, in that it is a middleman coordinating sellers and buyers. Alibaba doesn’t
house and manage any products itself.
“Gross Merchandise Volume (GMV), the metric the company likes to highlight, is the total
sum of goods and services transacted on all its sites.” In 2013, Alibaba hosted GMV of $248
billion in transactions last year. That’s more than Amazon and eBay managed to do
— combined. And while Amazon takes home a lot more revenue than Alibaba from its
fewer transactions, Alibaba takes a much higher net income from its revenue than
Amazon. Alibaba now takes home 80 percent of its revenue as profit.

Alibaba’s revenue is the cut it takes out of each sale. In comparison, WalMart’s nearly
$250 billion in revenue represents the total value of all the goods purchased along with
its builtin margins. This shows how complicated it is to value Alibaba. To really
understand how big a deal Alibaba is you’ve got to understand the growth of China’s
ecommerce economy and the stronghold that Alibaba has on it.

China has over 618 million internet users and they’re spending lots of money. That’s twice
the population of the United States, but only half China’s total population. So there’s lots of
room for growth in a sector that’s already exploding. In 2010, China’s ecommerce
market was $74 billion dollars. In 2013, it was $295 billion. By 2017, it’s estimated to
reach $713 billion.

And Alibaba is cashing in big time. It controls 80 percent of online sales. Even though it’s
not yet putting up the gross revenue numbers of Amazon and Apple, its 80 percent
control of the market and 80 percent profit take from its revenue adds up to a huge,
massive, crazy, growing amount of money.
Alibaba expands its new market through freebies. They offer freebies to attract more
clients and customer to use Alibaba as an online marketing platform. For example,
Alisoft is giving out free copies of Shopkeeper TM, a package that consist of accounting,
stock management, and consumer resource management tools for registered users. The
company also promotes its services via internet promotion strategy such as public
relations, direct marketing, and discounts for certain items during special days such as
festivals, media advertising and sponsoring of events to attract awareness of Alibaba.
In the e-trading marketplace, Alibaba provides a communication platform for trading
partner to communicate in real time through Alibaba’s Trade Manager tool. Alibaba also
has a team of dedicated experts that are always motivated to search for better and
innovative technology platforms to catch up with the changing of the generations.

Alibaba is continuously trying to develop highly complex system to improve the online
transaction for the consumers by setting ample security actions. For example, Trustpass
has given online customers a strong trust and security of online transactions. Moreover,
Alibaba also has the latest technology for anti-fraud and anti-spam that is able to detect
any fraudulent activities and filter unwanted messages. Alibaba’s IT team is constantly
working on improving the accuracy and protection of their customer because customers
are their main source of the entire business.
Alibaba is a “Collective Entrepreneurship” between company and thousands of
merchants that join this network. It offers the platform whereas the merchants provide
the products.

The Alibaba model, which relies on profits sharing rather than listing fees has attracted
many merchants to participate in the network. The larger the network is, the greater
the benefits for both company and merchants as it draw a large volume of sale.
Likewise, Alibaba has a good relationship with the Chinese government, which is
important in China where government acts as a gatekeeper of the economy. Alibaba has
been chosen by the government as one of the five companies to enter the Internet
banking where banks are owned by the government.

Alibaba has also taken over Yahoo in China and thus Yahoo is the largest shareholder of
Alibaba. The two companies will work together in an exclusive partnership to grow
Yahoo brand in China.
Alibaba’s future strategic actions include sustaining domestic Chinese market. It is
essential for Alibaba to maintain its domestic market first in order to success globally.

Without China market, Alibaba would not be able to survive without the economics of
scale. Alibaba is attempting to expand its business in developing countries such as India,
which is the second fastest developing country after China.

India has significant potential growth and profit. Besides that, Alibaba is also enhancing
its technology and R&D development for advance Internet infrastructure to give the
fastest speed and accuracy for online marketing (You Fei, 2012).

Meanwhile, Alibaba has been trying to invest in smart phone users. Forrester Research
analyst says that there’s high potential of integrating other services into WeChat
because many people are using it to communicate with friends and family in China. It
could develop into a foremost e-commerce rival in the long run (Osawa, 2013).
As mentioned by Forbes, Alibaba is not only the largest IPO in U.S. history but has also
risen more than the three largest IPOs by American Internet companies combined.

Alibaba broke records as the biggest IPO, pricing its offering at $68 per share this year.
The IPO is expected to raise $21.8 billion, which values the company at $167.6 billion
overtaking Visa and Facebook (Chen, Solomon & Mac, 2014).

In my opinion, Alibaba became so successful in e-commerce is because of its numerous

advantages and it have great potential to boost up business for all small and medium
enterprise which attracted many suppliers to invest in them. To enhance my study on
Alibaba, I went through Alibaba.com to understand more on how Alibaba system works and
what makes it so successful. To my surprise, I love many features that Alibaba.com has to
offer that inspired me to promote my future company and products effectively. In fact, the
real time communication and offline message was reply promptly by the supplier
immediately after I posted my questions to them. This is one of the reasons why many
suppliers are investing into Alibaba because of it efficiency and effectiveness. Above all, I
also suggest that Alibaba should take this into consideration in their promotional strategy. In
fact, more advertising, publication, brand awareness, and public relations will help Alibaba
pump up their popularity and awareness all around the world. In addition, founder, Jack Ma
speaks great English whilst many other Chinese entrepreneurs could not communicate well
in English. This is one of his underrated advantages.

Jack Ma is also good in unifying everyone’s believe through common goal. He is also a
good leader that encourages his employee to achieve higher without limitation. He
works together with them and guide them through the entire success of Alibaba. I
believe in two principles: Attitude is more important than capabilities. Similarly, decision
is also more important than capabilities. The right decision comes with the right attitude
and the worst failure is giving up (Pris, 2014).
In conclusion, Alibaba’s e-commerce marketing strategies have made it so successful in just
a short period that there is no other company that can overtake them at the moment.
Planning to be a company like Alibaba is easy but becoming like Alibaba is another thing.

In this study, we learned very much that the determination of the founder, Jack Ma has
profoundly influenced the success of Alibaba. Jack Ma once said it’s not about the list of
privilege but the story of opportunity that has made him a successful person even
though he doesn’t know much about technology. As one of the China pioneer e-trade
service platform, Alibaba has built a strong connection between SMEs in China and
oversea buyers with a boundless marketplace by providing the high quality services at a
reasonable price with various business marketing channels and promotions.

Alibaba has significantly attracted large base of consumer with the help of the large
population in China. Online business is not new to everyone since years ago, but Jack
Ma has created a miracle that gives China a huge impact until today, the e-marketing in
the 21st century has become the largest online e-trade platform in the world. However,
there are still some improvements for the Chinese e-market in terms of the protection
of intellectual property rights in China and the reinforcement of supervision over
etransation are still in a hard nut to crack for the China law enforcement and authorities.
Alibaba may be seen as a successful company, but there are also bumpy roads that
Alibaba has gone through such as cultural clash. When Jack Ma started to hire foreigners
into the company to manage the business, the Western cultural of work producing very
detailed and critical analysis was not suitable in the Chinese market because Internet
entrepreneurs would jump into the market and do it without spending much time in
analysing it.

Without doubt, Alibaba is now the leading international Chinese Internet company.
However, it is still struggling in expanding globally as the major revenue still comes from
suppliers in China. Alibaba has been trying to make its way internationally because of its
biggest threat, which is Baidu who has announced its plan to compete with Alibaba’s
Taobao. All in all, Jack Ma was just an ordinary person that had a vision, and it was the
perseverance and dedication that raise him into his current position in Aliababa.
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