(206,144) (98,713) (93,744) Less: treasury stock, at cost 130,331 83,874 80,469 - Total shareholders’ equity 543,387 514,349 511,744 499,934 Notes: 1 All monetary units stated in millions of dollars. 2 Prepared by the authors.
Page 127 Journal of the International Academy for Case Studies, Volume 17, Number 7, 2011 ALIBABA: CHANGING THE WAY BUSINESS IS CONDUCTED IN THE INFORMATION ECONOMY Casimir Barczyk, Purdue University Calumet Gideon Falk, Purdue University Calumet Lori Feldman, Purdue University Calumet Charles Rarick, Purdue University Calumet CASE DESCRIPTION The primary subject matter of this case concerns the changing nature of international business. Secondary issues examined include unique business strategies and issues of corporate governance. The case is written at a difficulty level of three, appropriate for junior level courses. The case is designed to be taught in one class hour and is expected to require six hours of outside preparation by students. CASE SYNOPSIS The Chinese company, Alibaba, is changing the way global business is conducted. This fast growing B2B company has benefited from the explosion in information technology and has developed a unique business model. This case examines Alibaba’s success and how the company is unique from most Western companies. With the explosive growth of Alibaba in China, the company is now ready to expand to the rest of the world. INTRODUCTION Jack Ma is a man on a mission. The Chinese entrepreneur who founded Alibaba and other companies, wants to change the way business-to-business (B2B) is conducted. He wants to develop a platform to support small and medium sized enterprises (SMEs). Alibaba, Taobao, and other Ma creations have already begun to make some wonder how this former English teacher, with an unassuming demeanor, has been so successful, and what the future holds for his companies and the future of B2B activity. HUMBLE BEGINNINGS The founder of Alibaba, Jack Ma grew up in the Chinese city of Hangzhou, a city known for its beauty. Hangzhou has been consistently rated the most livable city in China for a number of years. Ma began his work life as a child, acting as a tour guide in order to improve his proficiency in English. Ma’s academic skills in math and science were poor; however, he possessed a talent for languages. After graduating from the Hangzhou Normal College, Ma began teaching English. Not satisfied with the salary of an English teacher, Ma began his own
Page 128 Journal of the International Academy for Case Studies, Volume 17, Number 7, 2011 translation business. After a trip to the United States and gaining experience with computers and the Internet, Ma created China’s first Yellow Pages company. Ma then started Alibaba in his small apartment and has grown the Alibaba Group into a collection of fast-growth companies including Taobao, Alipay, and Alisoft. While still a humble and frugal man, Jack Ma is building a strong competitive force in the information-based global economy. He is known for not thinking about today or tomorrow, but thinking decades ahead. Jack Ma has a long-term focus which has served him well in becoming one of China’s wealthiest individuals. His rise from
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