SWOT Analysis Of Aliibaba

Introduction

Alibaba Background

Alibaba Group is one of the world’s most successful Chinese multinational corporations originally based in China. It is an e-commerce company that provides consumer-to-consumer, business-to-consumer and business-to-business services through web portals for both international and domestic China trade. Alibaba launched various sites including Alibaba.com which was the first China’s commercial website launched in 1999. The purpose of Alibaba.com site is not just to connect Chinese supplier

Alibaba’s sites have currently reached over 65 millions of registered users, hosted over millions of merchants and businesses globally. In 2005, its revenue had reached over approximately US$100 millions. Although China’s gross

Strengths

Alibaba is not just a company but a group of companies with many affiliated entities which grants itself with a very strong position in global market. According to Wikipedia, it has 15 companies and affiliated entities including the largest online trading website, allowing even more positive cash flow but Alibaba’s reach does not end there. Although it still has room for improvement, Alibaba already has large customer base and international presence.

Alibaba’s strong reliability brings more new users to trading with a peace of mind especially its service, Alipay which can guarantee buyers with satisfaction in complete transaction. Unlike eBay, Alibaba does not charge listing fees. Instead, it makes most of its revenue from advertising on its various sites. With hundreds of millions of active buyers and sellers every year, it is comprehensible to see why advertisers find the websites so appealing (M. Broad, 2014).

Alibaba may not access to alternative networks in the event of failures, disruptions or other problems with China’s Internet infrastructure according to its IPO filing statement.

Business operations in value chain

The business operations of Alibaba can be clearly understood through Porter’s value chain model which helps us to identify the valuable aspects of Alibaba internal operations in order to make aware of its pros and cons. With the emergence of Internet-based businesses, the model needs to take in the different nature and timing of value adding method. As we know of Porter’s value chain model, we then focus on the core value of Alibaba.

Figure 2. Alibaba’s value chain model adopted from Joe Hasse (2009).

There are three functional steps according to Figure 2: the inputs, operation of information, and outbounds. The inputs are the customers who join the service looking for a matching company for their supply chain needs. The operations including gathering, organising, selecting, synthesising, and distributing information are applied in controlling the information and gain business connections among users through the website. The outbound for Alibaba is when a relationship is formed between a seller and a buyer in order to finalise their transaction before leaving