Answer

1.      Executive Summary

Alibaba is the leading e-commerce business in China. The company has been at the forefront to establish an effective e-commerce system and promoting its associated environmental factor. This report will reflect Alibaba’s business model, environment, data-led strategy, and biases in the system. From the data, it was established that Alibaba has a good grip on the market attributed to the strength of having affluent publicity. The company’s weaknesses are propped by insufficient laborers. Alibaba’s data-led strategy is bestowed upon cloud computing techniques owing to its scalability as well as virtualized resources that support sharing the available data via internet connectives. However, this strategy’s only bias is sunk-cost thinking.

Table of Contents

1. Executive Summary. 2
2. The Organisation. 4

1.1         Background. 4

1.2         The Business Model 5

3. Environmental Scanning. 7
4. The Data-led Strategy. 9

4.1         Business Model Transformation. 9

4.2         The Data. 11

5. Biases. 13
6. References. 14

2.      The Organisation

3.1  Background

Alibaba is China’s biggest e-commerce business. The company was founded by Jack Ma, a former English teacher, in 1999 after scrapping $80,000 from 80 investors to introduce an online marketing platform for Chinese companies. With its headquarters at Yuhang District, Hangzhou, the company has managed to extend its operations to other counties across the globe. Since 2014, the company’s revenue has been increasing steadily and is currently ranked among the top 10 world’s largest corporations in terms of market value. In 2020, the company managed to reach more than a billion global active with almost 90 percent of the defined populace residing in China. The current number of employees working at Alibaba Group stands at 117,600.

• Vision

Alibaba’s vision is to establish the future of e-commerce. To realize its vision, Alibaba had to consider some measures that could effectively see it through growth and success (Havinga, Hoving & Swagemakers, 2016). Initially, the company’s stakeholders desired to increase their geographical boundaries, however, it was a challenging proposition to achieve. Nevertheless, the revenue generated through their business supported all operations to the point that they had enough capital to expand their business.

• Mission

Alibaba’s mission has been oriented in respecting and expressing business ethics to the surrounding. The mission that the company resorted to significantly contributed to the achievement of their vision. The serenity that the firm introduced to their business world indicated that these shareholders wanted a peaceful co-existence in that potential clients from different cultures could easily relate to and prefer to utilize resources offered by the company.

• Strategy

Considering that most online platforms in the world are business-oriented, the managing directors of Alibaba had to ensure that their company suits the market demands. To establish a strong market relationship with its client’s demands Alibaba opted to use different as well as easy services offered by the different media platforms. It became evident that application pricing significantly promoted its market strategy of using social media platforms. For instance, the decision from Alibaba’s official that the firm will sell its application to its subscribers at lower prices than Facebook or YouTube made a majority of online shoppers opt to use the platform. Currently, many of these platforms are venturing into advertisements in promoting the company. The motive behind this was that, if many individuals are familiar with a certain product, a good number will choose to consume the product through referrals. All the stated processes of marketing required professional evaluation for the company to conceptualize which market strategy would suffice.

3.2  The Business Model

Value proposition: The company offers five main value prepositions; Accessibility, brand/status, risk reduction, convenience, and customization.

Channel: The main channels used by Alibaba to market products and interact with clients include; company website and app, social media, and telephone calls (Yun et al., 2020).

Customer Relations: This is primarily an automated self-service with a limited human interface.

Key Activities: Alibaba is devoted to maintaining a robust and common platform for its products/services as well as buyers and sellers.

Key Partners: They include; market affiliates, professional service providers, logistics service providers, independent software vendors, and retail operation partners (Yun et al., 2020).

Key Resources: They include; human resources and a dependable software platform.

 Cost Culture: a cost-driven structure that guarantees the reduction of losses and an increment in profits.

Revenue Streams: The three revenue streams for Alibaba include; service fees, advertising fees, and commissions.

Fig 1: Alibaba Business Model

3.      Environmental Scanning

• Political

Political factors have taken up a big role in the modern age. Globally, the political powers are assuming a vital part with regards to business. The technology business industry is explicitly facing immense control pressure. The Chinese government empowers local organizations which has demonstrated its significance for organizations like Alibaba which has seen extremely rapid development. These political powers are influencing international organizations in alternate manners as well (Pervaiz 2015). Trade relationships between nations additionally influence international trade. The decisive trade relationships between the U.S. and China are currently on a rough patch. The situation has been detrimental for Chinese organizations working in America. Similarly, it can be an obstacle to the intended development of Alibaba in the European nations.

• Economy

In Likewise, economic factors play a vital role when it comes to international business. Other than the current state of the global economy, the condition in the local as we as regional economies also impact global business together with their sales and the related profits. After the global recession, many global economies have struggled to regain the previous state (Pervaiz 2015). The Chinese economy has also flourished significantly considering that the country is currently in the second, after the U.S. in the global ranking. This has instigated higher sales as well as profits for local brands.

• Social

Social factors play a significant role in business sustainability. Other than the alternating social trends, other factors impact the business. From one society to another the cultural patterns vary significantly. However, the use of technology across all cultures has increased exponentially (Pervaiz 2015). This initiative has proved to be beneficial for e-commerce businesses such as Alibaba and Amazon. In China alone, the population has increased significantly and the majority of the populace is aware of technological tools. This suggests that Alibaba can effectively exploit both local and international markets.

• Technology

In the modern age, technology is playing a crucial role in the growth of industries. Alibaba is a technology-oriented business. In China, the firm has gained significant recognition making it grow rather fast within a short period (Pervaiz 2015). This growth has been solely influenced by advancements in technology as well as innovations. Every year, Alibaba invests a lot of money in technology. Respectively, the company is leading in cloud computing technology in China. .

• Ecological

Large companies that have made major investments in environmental sustainability have gained significant recognition (Pervaiz 2015). Alibaba has prioritized the green environment by sponsoring environmental projects as selling merchandise that conserves the natural environment. This charitable commitment has made the company realize its mission and vision.

• Legal

Laws and government policies have grained a significant role in the business external environment. For multinational companies, these laws have been a big challenge (Pervaiz 2015). Complying to the set rules means that big business have more responsibilities to sustain the environment and non-compliance to such laws indicate that these high companies such as Alibaba are prone to hefty fines, which would affect their revenue and growth.

4.      The Data-led Strategy

4.1  Business Model Transformation

The building blocks of Alibaba’s operations will be bestowed upon cloud computing techniques owing to its scalability as well as virtualized resources that support sharing the available data via internet connectives (Zhang & Ravishankar 2019). The key objective of this technology is to reduce the associated costs for running the company’s physical structure. Most essentially, this domain is used to share both the computer resources and data resources following the customer’s request. In most cases, this domain is associated as a third-party data center where the client is provided virtual data storage space and permitted to accesses the same data.

In line with the new data-let strategy, Alibaba will introduce Cloud Data Protection for Masses to run concurrently. This alternative is a service-based commercial development that ascertains data protection to the cloud users as well as cloud servers while accessing potential risks to the application. In broader prospect, this technology will be used to burr unauthorized personnel from assessing clients’ data (Zhang & Ravishankar 2019). The entire project development austerely depends on standard procedures of Data Protection and Services. To achieve this objective, a new cloud platform will be developed to save time by reducing the number of exertions of the pre-installation for every application by the user. Another advantage is that it provides greater enhancement offers of protecting both cloud and users’ data.

The company’s project development under this entity will follow four modules, such as user module, trusted platform, cloud computing, and third-party auditor. The front end, used by company developers, of this project is created using Java, while the back end will use SQL server tools (Zhang & Ravishankar 2019). This form of the framework makes the project user-friendly and more secure in the front end and the back end. What’s more, this new technology offers a new cloud computing paradigm to offer data protection to consumer applications. Data encryption, logging in/out, decryption, logging, and key management are few methods used to deploy the suggested security measures of the cloud.

Figure 2: The organisation’s transformed Business Model Canvas.

4.2  The Data

To become an effective data-led organization, Alibaba has to solely rely on consumer data. This data will help the business to predict customer preferences and to determine areas that need more investment (Elvy 2018). There are four types of data that the company will rely on to determine its mode of operations

• Personal data

This classification includes personally identifiable data such as gender and social security numbers together with non-personally identifiable data like IP address, device IDs, and cookies (Elvy 2018).

• Engagement Data

This category is associated with detailed information on how clients interact with the company’s website, customer service routes, emails, paid ads, social media, and mobile apps.

• Behavioural Data

This type of data includes transactional information such as quantitative data, product usage information, and purchase histories (Elvy 2018).

• Attitudinal Data

This category encompasses data such as purchase criteria, metrics in consumer satisfaction, and product desirability (Elvy 2018).

• Methods of Collecting Data

Alibaba collects information in different ways and from many sources. A majority of data collection methods are relatively technical, but others are quite deductive. The bottom line is that Alibaba uses a cornucopia of collection procedures as well as sources to obtain and process consumer data with metrics. The company collects consumer data using two methods: direct interviews with the clients, tracking consumer pathways using the company’s website and other social media platforms.

• Importance of collecting data

The essence of collecting consumer data is that it enables Alibaba’s management to understand the market. The company ought to know how consumers behave online, identify areas that need improvement to support consumer experience, and define genera demographics (Martin 2016). Consumer information will help the company tweak every operation to better fit clients’ needs.

Another importance of collecting data is that it will help Alibaba to enhance its marketing strategy (Becker, 2018). To outrank its competitors, the company has to increase its conversions as well as establish transparency and trust between its brand and the market. Data will help the company to identify and embark on the marketing campaigns and procedures that target the audience effectively.

5.      Biases

The proposed business intelligence plan for Alibaba has one major preconception which is sunk-cost thinking. This type of bias explains how the company will venture to a certain investment despite the probability of failing but still encourages consumers to utilize the opportunity (Zhang & Ravishankar 2019). Many e-commerce businesses have overlooked the importance of using consumer data by giving false information regarding a certain product or service. This kind of bias always favors the company as it hardly experiences a loss in the inventory. Ecommerce businesses that thrive with this perception tend to focus more on their profits rather than establishing a sustainable customer experience.