Analysis Leads to Good Strategic Choices, Article Writing Example

Industry’s dominant economic traits

Alibaba Group Holding LImited Is one of the most successful business groups in China. It embraces a business-to-business operation that thrives under the consideration of exchange of products and monetary transactions through online connection. The organization basically operates as a portal of connection between businesses in the industry that want to establish particular commercial connections. At present, the overall operation of the Alibaba Group of Companies is valued at $US 231 billion. The year 2012 has been proven to be one of the most successful points of operation of the company. It is during this time that the company was able to handle up to 1.1 trillion Yuan or valued at $170 billion in sales operations. This operational results from the business marks one of its most successful points of development.

The business currently operates a data-centric system that allows the overall connections of the organization to operate alongside each other. Such unity between the organization’s separate branches specifically allow the business to be seen as a unified entity that is able to operate fully under the guidance of international policies of business development. Through making use of the available resources and systems that modern technology provides, it could be realized that Alibaba was able to embrace the current status that it emerges with at present.

Just recently, the organization also launched its consumer-to-consumer portal which is named as Taobao. This website takes on the pattern of operation that eBay wherein both organizations and individual sellers are able to come together to find a way to relate to their target market. With Taobao standing as the bridge between the sellers and the buyers, the organization was able to process several orders that are passed on through parcel in both inbound and outbound of China. The operation has become even more effective and distinct especially as it has embraced international relations between businesses and clients as well as individual resellers who want to use the portal of the organization to be able to reach out to the target markets of the business owners as well as the individual resellers who engage in providing the

Nature of competition and strength of competitive forces

There are different competitive forces that affect the overall operation of the business. To understand these forces, Porter’s point of analysis shall be used to determine this particular course of business development of Alibaba Group of Companies.

Bargaining Power of Suppliers

Given that Alibaba operates under the condition of assisting companies and resellers, it could be realized that the bargaining power of suppliers would depend on the willingness of the said members of the market to submit to the rules and policies of the business especially when it comes to determining price-ceilings. Without such willingness, the business and the individual resellers might not be able to join within the pool of participants in the overall business operation of Alibaba; this would directly cause commotion on how the business operates accordingly.

Threat of Substitutes

With the many hopeful business operators in the international industry, it is most likely that new organizations will sprout out and challenge the position of Alibaba. Nevertheless, with good control on how the business is able to operate according to the purpose it follows to embrace, other substitutes that may arise in the international market need not be feared, instead should be used as a source of inspiration to improve whatever the organization is working with.

Bargaining Power of Buyers

Who wants to buy the products offered by Alibaba? Since the organization aims to be fully international like Ebay, it is prone to creating possible options of pricing and reselling of items that would fit the overall purpose of the business to connect organizations and individuals who want to exchange valuables through the internet. With the creation of such options the organization opens its doors to better operations and larger cooperation from members of the society that they would want to engage with.

Threat of New Entrants

With the internet remaining open to new operators in the business, it could be realized that entering the industry is easy. With the new programs made available for hopeful operators in the business, it is realized that making a great impact especially on the way the new organizations spur out to make a name in the international market, it would be easy to capture the attention of the target buyers of the new organizations accordingly. Facing the challenge of the new entrants through effective market positioning could best support the overall goal of the organization to thrive against the newly created competitions.

Industry Rivalry

There are other industries that offer businesses and individual resellers the chance to offer their products out in the international market. However, the internet and the programs used to enhance the overall concept of operation that Alibaba embraces have a great impact on how the business is to thrive amidst such rivalry.

Based from the definition and analysis of the five forces that were used to scale the overall operation of the organization, it could be realized that the real score that holds Alibaba Group of Companies is the fact that it creates a distinct impact on how the internet is used accordingly especially in the hope of reaching out to as much or as many engaging parties accordingly.

Drivers of industry change

As it could be noted, the business operates online. This fact puts it in a jeopardizing position which makes it vulnerable to facing massive international rivalries. The emergence of distinct course of promotion as handled through the internet marks the condition by which the organization is able to establish its marketing strategies that could further strengthen its position in the market. When businesses operate through the internet, they face the risk of being stripped down to scrutiny by critics who intend to review their operation and the way they serve their clients. Notably, these criticisms could be accepted and be used for a more positive application that could help the organization grow further.

Along with such challenges, the ever-changing attitude of the international market also accounts for the definite course of industrial-change that the business must be able to take into account. Relatively, such changes would affect the overall operation of the business including the process by which they manage their assets and the way they manage their options of promotion and marketing to reach out to the target market they hope to serve.

These issues could be counter-responded to through the effective utilization of strategies that would cover the considerations on how modern technology is used accordingly to define the operations of the business especially when facing the changes that the target market incurs. The demands of the people being served by the organization are expected to take different options of turns and adjustments based on the changing situations in the environment they are thriving in, including the elements that dictate the different adjustments in their process of decision-making. It is because of these particular elements that determines the course of development of how a business operates that Alibaba should be able to derive its course of alteration when such situations occur in relation to how they handle their connection with their stakeholders and how they handle their operations in relation to what they have promised to the market they hope to serve.

Remaining ideal in their concept of serving the needs of the people and the overall industry they are engaged in shall make it easier for Alibaba to thrive in the internet as fully operational business entity that serves the best values for their clients and their partners in business. Practically, with good strategy and control of operations, the capacity of the business to engage in good business could provide a long-lasting source of strength that Alibaba needs to survive massive competition in the market of international trade and commerce.

The practical process of weighing the weaknesses and strengths of the company at present shall allow the administration to see through the changes of the industry and the market that the organization engages with. With such changes coming to surface, it could be understood that the administration would have a better sense of control, especially in the face of commercial development and adjustments that the international market undergoes.

Competitive position of rivals

Ebay, one of the strongest rivals of the business, is one of the most notable organizations that serve the needs of the international market for online shopping of particular items that may not be that easy to find in the market. Its startup process challenged the concept of development that Alibaba is trying to enhance. Practically, it could be realized that working towards a determinable course of improvement as patterned to what the [champion] of the industry has already taken into account gives a distinct impact on how the overall operation of the business is taken care of.

Ebay, being a huge name in the industry, is expected to take on the different challenges that competition offers. At the same rank, Alibaba should be able to create possible options that it could take to make sure that such challenges are responded to accordingly. Being an organization tied to different operating branches, it could be noticed that Alibaba has a better sense of determining its course of development especially in relation to how it could get the attention of the market faster and easier because of the tie up it has to different concepts of business operation.

Given that Alibaba operates in China, and is most likely locally noted, the challenge it has to face has to do with what is demanded by the market. Its growth could be expected to be embraced fully only if it would be able to create a better portal that would welcome international visitors more openly towards the website of the business. Considerably, it is with this approach that the organization would be able to assure a larger possibility of engaging in international business and trade that would strengthen their operations further.

 Strategic moves of rivals

What is evidently seen among the rivals of the business is their capacity to use the internet and other online programs that could enhance the way they interact with consumers online. From the point of presenting their products, the process of ordering and completing transactions towards the point of getting payment and the process of shipping the products to the buyers; all these operations are enhanced through technologically defined operations that are guided through effective management of operations and routes that are logistically efficient in all forms.

Through determining the strategic moves of the rivals, it could be understood that the business could better embrace a more specific source of competence especially when it comes to mandating the direction of the organization’s growth. The capacity of the organization to face the different challenges that the rivals present gives it a better chance to make a name in the industry that basically attests to the fact that it has the ample strength it needs to face international challenge of competition.

Key success factors

The most effective element of success that the business could embrace is that of is capacity to be flexible and adapt to change in the industry. It might not be easy to take on such option, especially if a business is locally operating. Notably though, through the years of operation, Alibaba has already proven its stand in the market. Continuing the way it operates and making sure that it targets the right market with the most implicative process of strategically utilizing its assets. The best option of presenting the possibility of growth for businesses like Alibaba is usually based on the desire of the organization and its administrators itself to expand and to embrace development accordingly. What makes such option effective is that it provides a definite course of direction for the business to take on new challenges and work on the things that it could still improve basing on the way it operates at present.

Conclusions about industry attractiveness

The strength of Alibaba is that of its being a collection of companies put together to operate fully in the market. This solidity makes it a lot stronger than other companies in the industry especially because it has the capacity to start up immediately again because of the supporting element that comes from the other branches of operation it takes into account. The organization works fully especially in the hope of getting the attention of the international market. Its weakness is based on the fact that it operates locally and has lesser capacity of affecting the international market. Being able to fully operate around Asian regions only, the business needs to enhance its capacity to reach out to the international market. It is through this that modern businesses are able to take on the challenge of operating online. Perhaps through developing the way it connects with the target market through social networking based promotions, Alibaba could entice a much larger scope of the international market to take note of the products they offer and the services they hope to establish to be ready for the clients they want to serve.

Works Cited

Coyne, K.P. and Sujit Balakrishnan (1996), Bringing discipline to strategy, The McKinsey Quarterly, No.4.

Porter, M.E. (March–April 1979). “How Competitive Forces Shape Strategy“. Harvard Business Review.

Porter, M.E. (1980) Competitive Strategy, Free Press, New York, 1980.

Porter, M.E. (2008) The Five Competitive Forces That Shape Strategy, Harvard business Review, January 2008.

Ireland, Hoskisson, Understanding Business Strategy. South Western.