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Alibaba, which has collaborated with the “Made in China 2025” plan, has been seen to implement drastic changes in manufacturing industries. Other B2B platforms similar to Alibaba can be seen to force different organizations to rethink their respective business models (Schmuck and Benke, 2020). Manufacturing organizations have been seen to be more focused on production in order to sell different products in traditional markets. Different B2B platforms have been seen to be able to create different effects in proposing value. Alibaba has open platforms in B2B, B2C and C2C sectors. These open platforms can be accessed by any third-party organization. These platforms have been seen to decrease cost of products by eliminating the complexity of building an effective network. Alibaba can be seen to implement a newer approach to its management. This approach can be seen to be based on co-evolution and iteration.
Common points of Alibaba have been recognized to be strategy, innovation, quality and technology. Ant Financial, which according to “World Development Report 2019”, has been known as most valuable fintech organization and has been found to be most valuable affiliate organization of Alibaba (Yun et al. 2020). Ant Financial has been seen to use automation in improving efficiency and quality. Features of automation have been helpful in assessing credits automatically without human intervention and have also allowed this organization to provide faster operations at much fewer costs. Depending on these strategies, it can be seen that innovation strategies of Alibaba decrease recurring costs and increases the overall quality of a product or service. Thus these innovation strategies can be helpful in addressing different market opportunities.
Alipay has been found to handle different financial transactions with ease. Alipay even filled a market gap in China regarding PayPal which occurred due to weak legal protection of Chinese residents (Zhang-Zhang, Rohlfer and Rajasekera, 2020). Alipay has been an absolute substitute for American Paypal in China. This Alipay has later been known as Ant Financial. Main focus of this organization has been to bring small but effective changes to the whole world by making transactions easier. This focus has been supported by innovation strategies of Alibaba group. These strategies have made it possible to develop different digital technologies and thus it has enhanced transformation of business models and has also been helpful in developing different financial infrastructures. Changes in these aspects have been helpful to organizations in saving costs. Migration of technology has been seen to proactively apply changes in business models of organizations. These changes can be seen to improve value creation of respective organizations (Naughton, 2020). Transformation of Alibaba has been referred to as a proper combination of business and innovation strategies.
It has been seen that traditional commerce activities of Alibaba have been transitioned into e-commerce (Alibaba.com, 2022). IPOs of organizations can have an impact on the overall decision system and thus can decrease focus on innovation strategies. Alibaba has been observed to be well aware of this fact and has been found to properly manage their respective IPOs. With advancements in technology, different business functions have been found to become online-based. Major business functions which have become online-based are finance, logistics and marketing.
Alibaba has been successful as they created an open platform that defined an innovation of creating a huge network of manufacturers. This network of manufacturers has been seen to transform the whole Chinese retail system (Falcone, Kent and Fugate, 2019). Alibaba can be seen to manage organizational functions by using a data-driven network that includes manufacturers, service providers, logistic organizations and different vendors. With this huge network, Alibaba in China replaced services provided by Google, FedEx, Paypal, eBay and Amazon in the USA. Different organizations have been seen to rapidly grow by taking advantage of these innovative strategies of Alibaba.
Most organizations can include different innovation strategies in their respective organizational structure. Innovation strategy in Alibaba has been acknowledged as a good innovation strategy as Alibaba has implemented smart manufacturing in organization. Alibaba implemented this manufacturing process by implementing automation in as many processes as they could (Ye and Du, 2020). These automation techniques have been helpful to Alibaba in providing software-related solutions to each and every activity of organizational operations. These processes have also been helpful in recording customer behavior which can later be used in providing suggestions to respective customers. Alibaba has also implemented automation in information sharing. Depending on all these innovation strategies, it can be seen that Alibaba has been using a "Data-Driven Disruptive Innovation".
Falcone, E., Kent, J. and Fugate, B., 2019. Supply chain technologies, interorganizational network and firm performance: A case study of Alibaba Group and Cainiao. International Journal of Physical Distribution & Logistics Management.
Naughton, B., 2020. Chinese industrial policy and the digital silk road: The case of Alibaba in Malaysia. asia policy, 27(1), pp.23-39.
Schmuck, R. and Benke, M., 2020. An overview of innovation strategies and the case of Alibaba. Procedia Manufacturing, 51, pp.1259-1266.
Ye, G. and Du, L., 2020. The Entrepreneurship of Alibaba. (23), pp.209-229.
Yun, J.J., Zhao, X., Park, K. and Shi, L., 2020. Sustainability condition of open innovation: Dynamic growth of alibaba from SME to large enterprise. Sustainability, 12(11), p.4379.
Zhang-Zhang, Y., Rohlfer, S. and Rajasekera, J., 2020. An eco-systematic view of cross-sector FinTech: The case of Alibaba and Tencent. Sustainability, 12(21), p.8907.
Alibaba.com, 2022. Business model of Alibaba [Online] Available at: https://www.alibaba.com/ [Accessed on 1st April 2022]
Fourweekmba.com, 2022. Business model of Alibaba [Online] Available at: https://fourweekmba.com/alibaba-business-model/ [Accessed on 1st April 2022]
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