The grouth of Alibaba group - Book Report/Review Example

Also worth mentioning is Taobao’s Zhi Tong Che service which helped Taobao reach $14 billion of the total volume of their gross merchandise in 2008 (Wulf 4). The evident potential of Alibaba group to completely dominate the online trade business reverberates from the nature and strength of each of its subsidiaries. However, the extensive independence of the subsidiaries is simultaneously a weakness that may expose the Achilles’ heel of each company, leading to a domino effect where downfall in at least one could pull all the others with it.

Alibaba Group has a number of strong points that helped it in shaping its position in the market as well as sustaining its grasp in the top. CEO Ma has supported and insisted on the independence of each subsidiary. Each company within the group has its own board of director and an executive team complete with at least a president and a CFO. This formula is enforced by Ma to foster competition (Wulf 7). This is advantageous because it encourages every team to be driven not only to topple their competition within the particular niche but also to aim high in order to post the biggest growth for the entire group.

The generally good employee relation of Alibaba Group is another commendable aspect of its business. A good sign of this is the establishment of its CEO of the Chief Police Officer (CPO) who directly reports to Ma. The CPO is seen as a guardian and is usually assigned to a trusted member of the business. Wulf (8) observes, “Reminiscent of Welch’s belief that people were GE’s key assets, Ma elevated the importance of the human resources function early in the Group’s history.” A great feature of Alibaba is that it is an innovator.

It was a pioneer in China when internet technology was relatively at its budding stage and it dared to venture into an online business project when impersonal shopping is not only uncommon, but rather, goes against the very nature of the country’s direct shopping culture. It was a forerunner in B2B when this had been a new concept in China and today it is reaping the benefits of being the first. The company was able to address the culture issues that come with their perceived clienteles’ hesitancy to maintaining an online interaction, especially in terms of trade. Wulf (4) discusses that when Taobao opened to retailers in 2003, eBay, an already global brand, was its biggest competitor capturing around 85% of the market.

However, this was a time when the total shoppers online in China represented only 1% of the entire population. With Taobao’s direct knowledge of the market and their impulses, coupled by the leeway that was allotted by its parent company, the site ravished eBay by 2007 dominating 82% of the market’s share. Alibaba Group’s reign in China’s online trade industry may seem everlasting. But it does not take a savant to know that business quickly change and markets shift incessantly. This overconfidence is shown by Ma’s remark to stockholders of Alibaba’s public listing, “you don’t have to invest in Alibaba”