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Case study
Alibaba.com
International Business Alibaba.com case study
I. Case Background
Alibaba.com is the flagship company of Alibaba Group, is ...
II. Statement of the Problem
In e-commerce industry, the credibility and reliability is very important for
importers and e...
Benefits
The effective promotion engines
You or products will be promoted very quick by Ali's engine. No matter
that you a...
Seamless user experience Reduced server load and energy
consumption, meeting green IT objectives
It reduces costs of your ...
Though the trend is toward less export licensing requirements,
the facts that some companies have to obtain an export lice...
Answer:
The three websites catered different markets, Alibaba has a Chinese
emphasis and focus, while Trade-India is of co...
including video tours of their facilities. In addition, Alibaba has
developed the TrustPass designation. In order to obtai...
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Case study alibaba final v 1.1

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Case study alibaba final v 1.1

  1. 1. Case study Alibaba.com
  2. 2. International Business Alibaba.com case study I. Case Background Alibaba.com is the flagship company of Alibaba Group, is the world’s largest online business-to-business trading platform for small-and-medium size businesses. Founded in 1999 by Jacky Ma in Hangzhou at eastern China, Alibaba.com has three major marketplaces. The company’s English language international marketplace Alibaba international (www.alibaba.com) serves to bring together importers and exporters from more than 240 countries and regions. The China marketplace Alibaba China (www.1688.com) is developed for domestic business-to-business trade in China. And Taobao (which means “digging treasure”) is China's most popular business-to-consumer and consumer-to-consumer trading site with more than 20 million registered users. In addition, Alibaba.com offers a transaction-based wholesale platform, AliExpress (www.aliexpress.com), which allows smaller buyers to buy small quantities of goods at wholesale prices. And Alibaba.com has achieved award after award in recognition of its achievement and impact on e-commerce, including “Best of the Web” by Forbes Magazine for seven consecutive years, the most popular B2B website by Far Eastern Economic Review, and other awards, including China Excellent Business Website and China Best Commerce Website. Alibaba.com is frequently quoted as one of the top five websites in the world along with Yahoo, Amazon, eBay and AOL, by domestic and international media. Business model of Alibaba.com It is to help sellers meet buyers. More specifically, it provides an Internet based business-to-business (B2B) platform where sellers (suppliers/manufactures) can meet buyers (outsourcers /wholesalers) on a global scale. Vision  To Last 102 years  To be one of the world’s top 10 internet sites  To be an essential partner for all business people Mission To make doing business easy
  3. 3. II. Statement of the Problem In e-commerce industry, the credibility and reliability is very important for importers and exporters, the problem of Alibaba case is who has the responsibility to verify the credibility and reliability of both users and how does the company reduces or avoids the fraud during the dealing. III. Alternatives i. Everyone in Alibaba shoppers can enjoy the "fake a penalty a", "return the difference" service, to protect your safety, low-cost shopping. ii. If you think that buying fake goods, and can provide the relevant national quality inspection agency supporting documents, after confirmation, the full return of the amount of goods at the same time, and then return the form to vouchers doubled the amount of goods. IV. Recommended Solution Since the importers and exporters are complete strangers, Alibaba.com as the owner for the platform, it has responsibility for protecting every user and verifying the credibility and reliability of the importer and exporters. For solve the problem as following suggestions:  Implementing stricter authentication and verification procedures; when the importer and exporter enter in the platform and starting the business, they need to subject the document authentication and verification, and Alibaba need to review the user by semi-annual.  Set a section as safety & security center to addressing the fraud; the importer has the rights to report the fraud, and the section should be strictly investigation and implementation the fraud. V. Answers to the case questions (if there are any) 1. List separate columns, the benefits and costs using sites like Alibaba’s to trade internationally. What does your analysis say to companies like Grieve (in our opening case) as they think about their export strategy? Answer:
  4. 4. Benefits The effective promotion engines You or products will be promoted very quick by Ali's engine. No matter that you are 'Not so good' in IT, what you do are only give your data and pictures, then the rest will be organized and managed by Alibaba. Instantly you will have your website and what more? You and your products will be automatically be in the Top World Class SE(Search Engines) and others search tools links that you even never realize it the Ali's system will do that for you as like Robo engine. The effectiveness of it are tremendous that beyond your estimation. Excellent features and Simple operating tools in Alibaba site are: Web site, web-mail, Search engine, promo and link engines, IM Ali talks or Trade Manager, e-shop, Ali Pay, Feeds/alert RSS, Forum and live help, News and many others that you could find it all as single site only in Alibaba.com. It is as like a combination of 3 site : Yahoo + Google + E-bay Learning facility and developing your i-biz knowledge. Become Aleys, it would helps and assisting newbies/beginners in: learning and improving the knowledge of global trade on-line system internet business. In Alibaba's forum-community you will find many articles and postings that are really valuable and good to read and learn as your resources channel.you can Ask and get info from the Experts to find answer and free advises. They are Masters in their each experience/skill. If you are active and diligent in it, with in no longer time you will know more about i-trade or global trade on-line, from basic of trades, safe trade, products and biz-cultures. Resolved interconnectivity problems Enhanced security, reliability, and content delivery speed Benefits Costs Low cost Listings are free Access to many suppliers/buyers Searches are free Quick transaction time Personalized Web pages cost additional More transparency in transaction Certification costs some Lower risk of fraud Easy to make contacts with SMEs
  5. 5. Seamless user experience Reduced server load and energy consumption, meeting green IT objectives It reduces costs of your advertising and marketing expense and some overhead costs. Costs For both buyer and seller, they will pay certain amount of fee as disclosed in Alibaba .com Transaction certain amount of money. There is some historic evidence that the promotion of drop – shipping being used by the scam artists. Since you can’t be 100 % certain that your supplier has sufficient stock to fulfill your customer order, there;s a likelihood of back ordering taking place, which , obviously, could affect shipment and expectation and therefore, you’re online reputation will be damaged. More prone to fraudulent actions. Grieve Company they are facing challenges below: Extra costs Because it takes more time to develop extra markets, and the pay back periods are longer, the up-front costs for developing new promotional materials, allocating personnel to travel and other administrative costs associated to market a product can strain the meager financial resources of SME. Product modification When exporting, companies may need to modify their products to meet foreign country safety and security codes, and other import restrictions. At a minimum, modification is often necessary to satisfy the importing country's labeling or packaging requirements. Financial risk Collections of payments using the available methods (open-account, prepayment, consignment, documentary collection and letter of credit) are not only more time-consuming than for domestic sales, but also more complicated. Thus, companies must carefully weigh the financial risk involved in doing international transactions. Export licenses and documentation
  6. 6. Though the trend is toward less export licensing requirements, the facts that some companies have to obtain an export license to export their goods make them less competitive. In many instances, the documentation required to export is more involved than for domestic sales. Cultural Diversification / Market information Finding information on foreign markets is unquestionably more difficult and time-consuming than finding information and analyzing domestic markets. In less developed countries, for example, reliable information on business practices, market characteristics and cultural barriers may be unavailable or very limited. Small and Medium Enterprises must realize that entering an export business requires careful planning, some capital, market know-how, a quality product, competitive pricing, management commitment and realizing the challenges and opportunities of foreign markets. While there are no hard-and-fast rules that can help companies make decision to export or not and to become successful, understanding the advantages and challenges of exporting can help a smooth entry into new markets, keep pace with competition and eventually realize profit 2. Is it reasonable to speculate that eventually most trade between small-and-medium sized firms might take place in the context of sites like Alibaba.com? If so, does the influence your inclination to consider importing and exporting? Answer: The challenging opportunities and new avenues cropping in the corporate arena demands the role of a common mediator to act as a bridge between buyers and sellers, importers and exporters and the like. This service facilitates all in the business world to come to a common platform, thus turning this big world into a tiny global village. Industries of today have to invest in advertising especially online that helps to raise the visibility of companies to prospective customers and on the market where most of the competitors are listed. Therefore yes, it is reasonable to speculate that eventually most trade between SMEs might take place in the context of sites like Alibaba.com. The demand in using this kind of sties is very promising. 3. Visit www.alibaba.com, www.trade-india.com, www.europages.com, Compare and contrast this websites.
  7. 7. Answer: The three websites catered different markets, Alibaba has a Chinese emphasis and focus, while Trade-India is of course directed to India and Europages to Europe. Of the three, Alibaba has the broadest appeal, but all are very useful. Trade-India gives more direct access to product catalogs for some companies, but does not have the certification and authentication features of Alibaba. They can also give immediate in formations how long the members are. Also, the Alibaba contact templates are much more user friendly than both Trade-India and Europages. Europages is available in many different languages, while the others are more limited and are mostly in English. 4. Visit www.alibaba.com, go to “advanced search”, and enter the product that you seek in the relevant search. Select the required criteria and click on “Search”. Review the list of companies that qualify and find the suitable one. Analyze this process for ease, usefulness and potential value. Answer: The process is very similar with the local version in the Philippines Sulit.com wherein it has a very user friendly access and buttons. Once typed or searched the product list of possible options will be displayed. For example you are searching for laptop the search engine will be suggesting if you need laptop i7, if its 16 gb, dell laptop etc. The process itself is very easy and I think it has a potential value. It would take only seconds for the Alibaba .com to search for the product that you would want to see. There is also a compare button wherein you can compare prices among the suppliers. There is also a supplier details and some relevant information in order for you to investigate if the supplier is really a valid entity.The method of contact is made very easy by the use of templates and drop-down menus that help to standardize requests. If the suppliers will respond to these requests in a timely manner, the process has huge potential value. 5. How do transparent do sites like Alibaba.com make the import-export transaction? Would you still worry about fraud? Answer “These sights increase transparency and reduce the risk of fraud. Alibaba allows suppliers to post information about their companies,
  8. 8. including video tours of their facilities. In addition, Alibaba has developed the TrustPass designation. In order to obtain this designation, companies must pass an authentication and verification test from a third-party credit agency. Also available is the “Gold Supplier” designation, which also requires third party verification of trustworthiness. These mechanisms greatly reduce the risk of fraud, but do not eliminate it entirely. Mechanisms such as letters of credit should still be used to safeguard transactions from commercial risk.”. VI. Learnings The companies reason for export is mainly because to increase revenue; use of excess capacity and to diversity the markets. Companies that new to exporting, needs to analyze their export strategies that includes analysis of the company’s resources as well as its export potential. Exporters must have identified the challenges prior entering into exporting business. Internet is a good source of information nowadays. Internet marketing is a new form of direct exporting that is allowing many SMEs to access export market. For the companies that will be using like Alibaba.com or the same sites, they should be vigilant.

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