Alibaba_case_position_paper.docx - San Jose State...

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San Jose State University Individual Case Position Paper: Alibaba Case Study BUS 290: Strategic Thinking Submitted by Prof. Tanvi Kothari Alibaba is the biggest online commerce company in China and is also argued to be the largest in the world. Alibaba operates three websites: Taobao, Tmall and Alibaba.com. that facilitate international and domestic consumer-to-consumer (C2C) and business-to-consumer (B2C) trade. Alibaba hosts more business than any other e-commerce company with hundreds of millions of users and millions of merchants. In fact, Alibaba is a unique business model, which combines a marketplace, a powerful search engine and a bank, all in one. The founder of Alibaba Jack Ma was the first to launch a commercial website in China. The business model was simple: a meeting platform to connect suppliers and buyers around the globe. Even though, the platform was launched in China, the goal was to connect merchants and buyers from around the world, thus, it became “the first global Internet company emerging from China”. Alibaba represents successful e-commerce business model, which utilizes unique qualities of Internet and web. Let’s take a closer look at Alibaba business model.
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1. Value proposition Alibaba’s mission is to “make it easy to do business anywhere”. From the very beginning, the aim of Alibaba’s business was to allow small business to leverage innovation and technology to grow and succeed in domestic and international market due to Internet communications. Accessibility/connectivity/convenience : Alibaba marketplace allows both, buyers and sellers, to connect, discover and transact with each other on the e-commerce marketplace domestically and internationally. Business buyers use Alibaba marketplace (Alibaba.com) to source products for their business use or for resale (B2B). Individual consumers access retail marketplace, Taobao or Tmall to shop for anything everywhere. Cost reduction : Alibaba marketplace allows merchants to set up an online store, it is easy and relatively cheap. Compared to brick and mortar stores, it is less expensive to run an online store. Thus, sellers can reduce cost without paying rental fee for the physical store. Moreover, sellers reduce time in finding customers and promoting their business. Variety of choice : Alibaba represents a large database of big and small merchants. Due to a fierce competition, consumers can choose the best offers and price among the sellers.
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