ATW393E

STRATEGIC MANAGEMENT
SEMESTER 2, ACADEMIC SESSION 2019/2020
PREPARED BY INDUSTRY 4 TEAM 6:
Name Matric No.
KHONG SHEH ANN 133973
LEE XIN YEE 133977
LEE ZHI XIAN 133978
LIM XIN YEN 133983
LING CHAI YUN 133984
LOW CHIA WOEY 133987
Company background
provides end-to-end
the world's biggest e- platform which is founded in 1999 by 18
commerce platform uniquely designed for people led by Jack Ma
small businesses

many different lines of

leverage innovation and products traded in
businesses, including
technology to grow and Alibaba are basically
Taobao.com and
compete more effectively everything
Tmall.com

make money from operates various businesses and

commissions on sales, derive support for their economy
advertising and through from the businesses and services
fees for memberships and of related and affiliated
other services companies
 Vision
“We aim to build the future infrastructure of commerce. We envision that our
customers will meet, work and live at Alibaba, and that we will be a company
that lasts at least 102 years”

• MEET. Envision their company enables commercial and social interactions

among hundreds millions of users,
• WORK. Empower users to build their business and create value with the
help of technology,
• LIVE. Strive to expand their products and services to become central to the
everyday lives of their customers and aim to achieve sustainability in the
long run
Vision
Graphic: Demonstrate the Flexible: Embrace changes in
Focused: Alibaba emphasizes
company style and market order to operate in the
their effort in dealing with
position of Alibaba in the everchanging technology
customers first.
commerce world industry.

Feasible: To be achieved by
Desirable: Provides insight
effectively utilizing its Directional: Precisely
to continuously improve
networks and technologies describes that the company
business process and identify
which connected their will be able to operate for at
potential opportunity to
suppliers, employees and least 102 years
compete in the industry.
customers

Understandable and explainable:

 Could have been reduced to a
more memorable and catchy slogan
 Mission
“To make it easy to do business everywhere”

Enables businesses to transform the way they market, sell,

operate and communicate with customers and improve their
efficiencies by leveraging new technology
Mission

GRAPHIC FOCUSED FLEXIBLE FEASIBLE DESIRABLE EASY TO NOT

CREATE A PLATFORM ALIBABA BY E- ENCOURAGE COMMUNICATE DIRECTIONA
CONVENIENT OF CHOICE ESTABLISHED COMMERCE ALIBABA TO SIMPLICITY AND L DOES NOT
AND EASY FOR ALL ALIYUN WHICH EXPAND MEMORABLE PROVIDE A
COMMERCE RETAILERS WHICH ENABLES THEIR STRATEGY
WORLD BY DEVELOPS THEM TO MARKET THAT
TRANSFORMI HIGHLY ENGAGE GLOBALLY PREPARES
NG THE SCALABLE CUSTOMERS THE
RETAIL CLOUD FROM COMPANY
INDUSTRY. COMPUTING ANYWHERE FOR THE
AND DATA AT ANY TIME FUTURE
MANAGEMEN
T SERVICES
Factors Influencing the Formulation of Vision and
Mission

Technology Customer value proposition

accessibility, customization, convenience, risk reduction, and
Core and crucial element for an online business brand/status
Early in 1999, the founders of Alibaba, led by “Customer first”
Jack Ma, shared a belief that the internet could
“...We envision that our customers will meet, work and live at
offer opportunities to a small enterprise in
Alibaba, and that we will be a company that lasts at least 102
enhancing its edge in order to compete more years”.
effectively in local and global markets
guiding Alibaba to keep the promise of the values that are
going to be delivered to their customers and stimulate
customers’ engagement.
External Analysis - Opportunities

• International expansion • Digital marketing

• Opportunity to expand overseas • Acquire and retain its customers
at a faster pace • Compete with their competitors
• Generate new opportunities of • Reach out to more potential
revenue growth customers
• Expand its customer base • Achieve higher recognition at
• Reduce Alibaba’s dependence on global level
the Chinese market • Integrate a digital marketing
plan
External Analysis -
Opportunities
• Technological innovation
• Bring significant opportunities of
growth for Alibaba
• Enhance Alibaba’s competitive
advantage
• Reduce the growth barriers
• Create new channels of growth
• Expand its customer base rapidly
External Analysis - Threats

• Competitive pressure • Trade barriers

• Threatened by the dominance of • Arise when trade tension
Amazon and other regional happens between US and China
global market players • More tariffs have been charged
• Give rise to the challenge to on both countries
retaining market share and • Reduce their international
customer base trading
• Increase marketing, research and
development expenses
External Analysis - Threats

• Legal threats • Global epidemics

• Increased concerns related to • The outbreak of Coronavirus
user privacy • Hit the supply chains and
• Noncompliance deliveries
• Fines • Reduce the demands and
revenues
Internal Analysis - Strengths

• Leading E-commerce player • Research and innovation

• Invest in other markets to • Invest an enormous amount in
expand its business research and development
• Experience a rapid growth in • Grow its ecommerce and online
popularity and the number of business by virtue
consumers • Become the market leader
Internal Analysis
- Strengths
• Well segmented product
portfolio
• Provide a wide range of
goods and services including
cloud computing and
marketing services
• Provide logistic service
Internal Analysis - Weaknesses

• Did not control the amount • Lack of strict censorship in

sellers detecting malicious negative
• Cause high competition among feedback on their e-
the sellers commerce sites
• Make the sellers withdraw from • Encourage unhealthy
the contract competition in the marketplace
Internal Analysis -
Weaknesses
• Over dependent on core business and
Chinese market
• Fail to obtain significant foothold in
some major markets including India or
the European and Middle Eastern
markets
 • A strategic management tool for company to
Strategic Group reflect the competitive position of Alibaba and
Map look at how rivals are competing in the same
industry.
Strategic Group Map
Strategic Group Map

• Amazon and JD.com • Ebay

Price

Geographical coverage
- indulge in direct selling, owning warehouse and distribution - main marketplace is in the United States and United Kingdom
centres which total up with the 54%
- consist of smaller makeup - tries to expand its business to other countries such as China,
Germany, Australia, Italy, Hong Kong and Canada.
• Pinduoduo
- selling the products in bulk and the consumer can form • Amazon
shopping groups to get a cheaper price. - 60% of Amazon’s business comes from North America, while
40% of the business comes from outside North America.
• Alibaba and Ebay
- act as a middleman and provide a platform to connect between • Alibaba
buyers and sellers - main business operation is focused in China which consist of
- Higher mark-up price 84% and non-China marketplace is only 16%.

• JD.com and Pinduoduo

- focus their market in their home country which is in China.
 Strategic Group Map
  Strengths (S): Weaknesses (W):
S1- Leading E-commerce player W1- Did not control the amount of sellers
S2- Research and innovation W2- Lack of strict censorship in detecting malicious
S3- Well Segmented Product Portfolio negative feedback on their e-commerce sites
  W3- Over dependent on core business and Chinese
market

Opportunities (O): SO Strategies: WO Strategies:

O1- International expansion S1O2- Use its presence on social media for W2O3- Involve the use of technology such as AI to
O2- Digital marketing marketing and to attract customers towards its detect malicious feedback
O3-Technological innovation website. W3O1- Increase investment and acquisition in overseas
S2O3- Use its technology to enhance its research market
and innovation

Threats (T): ST Strategies: WT Strategies:

T1- Competitive pressure S1T4- Ecommerce becomes the main shopping W3T1- Provide e-commerce platform internationally
T2- Trade barriers platform during global epidemics W1T3- Seller’s entry restriction to reducing
T3- Legal threats S2T1- Provide innovative products and services to noncompliance cost
T4- Global epidemics reduce competitive pressure
 Competitive Strength Assessment
  Alibaba Amazon EBay Jingdong

Key Success Factor/ Weighted Weighted Weighted Weighted

Weight Rating Rating Rating Rating
Strength Measure score score score score

Company
0.1 5 0.5 5 0.5 5 0.5 4 0.4
Reputation/Image

Product quality 0.2 3 0.6 4 0.8 3 0.6 4 0.8

Distribution channel 0.15 3 0.45 4 0.6 4 0.6 4 0.6

Global expansion 0.15 3 0.45 4 0.6 3 0.45 2 0.3

Number of online
0.2 5 1 4 0.8 2 0.4 4 0.8
active shoppers

Type of businesses 0.2 4 0.8 3 0.6 3 0.6 3 0.6

Total 1.00   3.8   3.9   3.15   3.5

Strategic
Position and • A strategic management tool helps a company
Action to determine what strategy they should adopt
by analysing the internal and external strategic
Evaluation dimensions of the company.

(SPACE)
Matrix
 • Identify factors industry
  Internal Strategic Position External Strategic Position strength and competitive
Competitive Advantage Ratings Industry Strength Ratings
advantage.
Market Share -3 Profit Potential 5

Product Quality -4 Industry Growth potential 5 • Rate the industry strength

Customer Loyalty -5 Extend leveraged 6
using a rating scale from +1
Space utilization -1 Resources Utilization 6
Axis X
Distribution effectiveness -2 Ease of entry into the market 5
(worst) to +6 (best) while
       
competitive advantage using
Total -15 Total 27 -6 (worst) to -1 (best).
Average -3 Average 5.4

Total axis X score: 2.4

 • Identify factors for financial
Internal Strategic Position External Strategic Position
strength and environmental
Financial Strength Ratings Environmental Stability Ratings
stability.
Return on Assets 6 Technology -2

Leverage 6 Taxation -1 • Rate the financial strength

Liquidity 5 Demand variables -2 using a rating scale from +1
Cash flow 6 Inflation -2 (worst) to +6 (best) while
  Axis Y
Profitability 5 Competitive pressure -3 environmental stability using
        -6 (worst) to -1 (best).
Total 28 Total -10

Average 5.6 Average -2

Total axis Y score: 3.6

Alibaba’s
Aggressive
Position
• Strong competitive advantage
with a swift growth
 Alibaba’s Strategy

Innovation and development for Market development Market penetration

existing products
Taobao, Tmall and Alipay Having a focused marketing campaign in existing Offer a lower price to obtain more users and increase
market in order to obtain a greater market share market share
Expand customer base by attracting potential
consumers from competitors’ side
ERRC GridGrid
ERRC
A tool used to drive a company to focus simultaneously on eliminating and reducing disadvantage
factors, as well as raising and creating advantage factors while unlocking a new blue ocean.

Eliminate - Factors that the Reduce - Factors that should

industry has long competed be reduced well below the
on should be eliminated industry’s standard

Raise - Factors that should Create - Factors that should

be raised well above the be created that the industry
industry’s standard has never offered
Alibaba’s ERRC Grid
Eliminate Reduce Raise Create

Counterfeit goods sold on its online Complexity of shopping procedure Transaction processing efficiency Customer loyalty program
platforms Seller entrance fees Response rate of customer feedback Customers’ personalization service
Fictitious account and malicious and complaint
product feedback

Improve: Improve: Retain: Retain & expand:

Customer shopping experience Customer shopping experience Customer base Customer base
Customer satisfaction
Customer confidence Expand: Reduce: Improve:
Platform participants base Customer dissatisfaction Customer loyalty level
Customer satisfaction
Reduce: Cultivate:
Negotiation cost Customer-value proposition in
organisation
Thank you!