The Strategies of Alibaba Group

Alibaba focused on the dominant wholesale trading market since it was established. Jack Ma, the founder of Alibaba, developed the company rapidly through financing capital with his advanced concept. When the development of company was blocked, he took a risk to invest heavily in YAHOO China to open market and boost popularity. As the captain of the Alibaba, Jack Ma realized the trend of online shopping so made a huge effort to promote the development of the internet in China. Through constantly participating in social activities, Alibaba gradually established the brand awareness. It never stops the innovation of technology to improve the experience of online shopping, such as communication between sellers and buyers, quality control, and unique brand promotions. Alibaba also led the revolutions of the delivery system and payment method which brought people better service that encourage them to shop online. Nowadays, Alibaba has been the monopoly of the market of online trading business. The most powerful strength of Alibaba is its brand awareness. In China, it has become the pronoun of online shopping. With more and more people joining in the online trading platform to make trades, Alibaba‘s growth will continue for the foreseeable future. The unique technology of payment method is another strength of Alibaba. It has even changed the lifestyle of many Chinese people, especially young generation, and increased their reliance on the Alibaba. However, there is still some weakness associated with Alibaba. The most significant one is an issue of fake and inferior products. Due to the free registration policy for sellers, morally corrupt and dishonest sellers can easily escape the punishment of selling pirated products. While the legitimate right and interest of consumers are undermined, the brand of a trading platform would also be affected. Another weakness of Alibaba is malicious negative feedback. Because the registration as a buyer is free without any need of proof, some sellers might hostilely attack their competitors by registering as a buyer and give negative feedback to competitors. Without strict censorship, sometimes this might cause unhealthy competition.

Strategies

According to the analysis of Alibaba, there are several strategies can be complemented to sustain the competitive advantage of Alibaba. An adequate credit guarantee system could be established to increase the user scale, and it also builds the foundation of customer loyalty. People will lose faith and patient if they buy a fake product from a trading platform. Similarly, a more strict censorship is needed to protect consumer’s right. Under strict market supervision, a consumer can build their faith and reliance on this industry which is the most important thing for an emerging market. In addition, Alibaba should try to distinguish it from substitutes and use their unique advantages, which are low cost and high efficiency, to compete with physical stores. It has the ability to draw in a large number of sellers and purchasers, so it can change the rules of the game to enhance its market position and competitive strengths.

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