Alibaba.Com Case Essay

1. Alibaba. com was an early entrant into the B2B portal market in China. In about 100 words. explicate how this might hold created a lock-in consequence. particularly given the types of concerns he site attracts.

Alibaba. com does interlingual rendition every bit good as listings for little to mid-sized concerns who want to make concern. In so making there is a batch of clip and attempt put into this concern venture by these concerns. Once they are established and have spent the money to acquire at that place they wouldn’t be looking at altering their site unless this one wasn’t working for them. Since this site truly concentrates its attempts towards these concerns and it is working they are reasonably much a lock-in. Other concerns startups that would seek and derive their concern would hold to supply something they are non already acquiring in order to entice them off.

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2. Alibaba. com presently charges foreign Sellerss an one-year fee of approximately $ 400 for a TrustPass rank. but Chinese companies pay $ 8000 or more for their one-year listings as China Gold Suppliers. In about 200 words. explicate why the site has different listing charges for the two types of members and critically measure this pattern.

Foreign Sellerss are limited to the sum of points they can name on the site. The TrustPass isn’t necessary for them to purchase it merely pays for a recognition cheque that assures companies desiring to purchase for them that they have been checked out. It would be advantageous for companies to pay the fee for a TrustPass in order for the companies desiring to purchase from them to cognize they are person who can be trusted.

Whereas. the money paid by the Chinese companies is paying for the interlingual rendition and the listing of all their information on the site every bit good as selling. Chinese companies are non limited to the sum of points they can name. Alibaba. com is besides linking little and mid-sized concerns from around the universe with those little and mid-sized concerns in China who subscribe to them.

Alibaba. com is making marketing for these concerns that might otherwise non hold the resources to make this. Most little or mid-sized concerns in China would look to such agencies as trade carnivals and other such avenues to run into other providers and to pull clients to their concerns.

There is such a broad spread between the pricing that it could be construed the Chinese companies are manner over paying for the services. However. when you look at all they are acquiring for their money and the fact it is opening many more doors for them it seems it isn’t. With the growing of the company and the reclamation rate – it seems to be working good for them and they aren’t reasoning the monetary value.

3. You learned in Chapter 5 that big companies. such as General Electric and Sears. frequently require providers to follow specific regulations if they want to make concern ( such as utilizing EDI or even a specific EDI VAN ) . Alibaba. com presently focuses on linking SMBs with each other. In about 200 words. discuss chances that might be for Alibaba. com to go an intermediary in relationships between Chinese SMBs and big planetary companies such as General Electric and Sears.

Alibaba. com could be the site to utilize a value-added web ( VAN ) and have all the package. equipment and accomplishments needed to make minutess with the bigger companies. By holding merely one EDI transcriber computing machine salvaging each of the SMBs it contracts with from each one of them holding to hold their ain. By hooking up with a VAN supplier Alibaba. com would hold the advantages of that supplier for all of the SMBs it has contacts with.

By everyone utilizing the same VAN the costs could be spread out over everyone and non be so dearly-won. therefore allowing all the SMBs acquiring the advantages of the VAN. By making this Alibaba. com becomes a provider for non merely SMBs to SMBs but can now assist those SMBs by selling to larger and more retail companies who require that anyone they buy from have an EDI.

By Alibaba. com traveling to this following measure they can up their rank fees to cover the cost of upgrading to this option. It is a win-win state of affairs for both Alibaba. com and all of the SMBs it does concern with. Alibaba. com grows and the SMBs are now able to contract with bigger industrial companies and retail merchants that they would non hold the chance to make before. With these new catching opportunities the SMBs besides have the chance to turn.

4. In 2003. Alibaba. com launched Taobao. com to vie in the general consumer online auction market against eBay in China. After four old ages of an intensive and expensive conflict. eBay withdrew from China wholly. In about 200 words. depict the advantages Alibaba. com might hold had over eBay in this new market. and so depict the advantages eBay might hold had over Alibaba. com. Be certain to discourse lock-in effects where appropriate.

Alibaba. com was already a well-known and sure name in concern traffics when it opened Taobao. com. Since Alibaba. com was reasonably much a lock-in with its B2B portal for SMBs it would be a natural patterned advance for Taobao. com under the Alibaba. com construction to go a lock-in for another market being the general consumer online auction market. By pulling off of the Alibaba. com name the Taobao. com site would go more valuable to people who already are cognizant of the company than in puting in a new company such as eBay seeking to come in and get down from abrasion.

The trust had already been gained and people are non traveling to willingly move from a company they already trust to a new company get downing out. By being an established company Taobao. com could perchance be able to offer inducements. fairer monetary values and a larger buyer/seller base than eBay merely coming in. Peoples who are purchasing or selling would desire the larger base in order to acquire what they want to purchase or to acquire a better monetary value for what they are selling. By winning against eBay this would reasonably much lock-in Taobao. com and do it instead hard for any other company desiring to seek and vie against them in the hereafter.

5. In 2005. Yahoo! Paid $ 1 billion for a 40 per centum involvement in Alibaba. com. Yahoo! was interested in the company’s Taobao. com auction site because Yokel! had non been every bit successful as it would hold liked in developing its ain Chinese auction site. However. Yahoo! was besides interested in utilizing Alibaba. com’s strong repute in China to assist I compete with Baidu. com. the top Chinese hunt engine site. In about 200 words. depict the ways in which Alibaba. com’s repute could assist Yahoo! Compete more efficaciously as a hunt engine and Web portal in China.

By Alibaba. com being an established concern since 1995 and being a lock-in for the. SMB to SMB. B2B market worldwide and so being another lock-in for the general consumer online auction market in 2003 it’s competition in both countries were fundamentally out of fortune. By Yokel! offering to purchase into the company showed that they knew they weren’t traveling to be able to come in as a new company and round out Alibaba. com or Taobao. com.

It had already been tried by eBay and they had failed after passing old ages and money to make it and non doing it. Therefore. by purchasing an involvement in an already established company Yokel! was able to acquire its name out at that place in the populace sector and concern sectors and get down deriving the trust by going a portion of an already trusted company. When a big company endorses another merchandise or site it lends credibleness to that merchandise or site and its followings are more willing to take a opportunity on the new one.

By Alibaba. com and Taobao. com seting their grade on Yokel! as a dependable hunt engine and Web portal it was stating to all of their contract concerns and purchasers and Sellerss that this was person they should utilize and swear every bit good. Thus they gave Yahoo! that encouragement above any of the other hunt engines out their vying for people to utilize them.