Alibaba.Com

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Alibaba.com
Feasibility Study and Business Plan
M21-A Kevin Paul Julia

CONTENT

1. 2. 3. 4. 5. 6. 7.

INTRODUCTION................................................................... 2 BUSINESS MODEL ............................................................... 3 FIVE FORCES ANALYSIS ................................................... 4 PRESENT THE CORPORATION NOW ............................. 5 ENVIRONMENT .................................................................... 6 FINANCIAL ANALYSIS........................................................ 7 SWOT ANALYSIS ................................................................ 10

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1. Introduction
1.1. Alibaba Group
Alibaba (SEHK: 1688) (Chinese: 阿 里 巴 巴 ; pinyin: ā lǐ bā bā) is a Hangzhou-based e-commerce/e-auction company, specializing in global trading. It was founded in 1999 by Ma Yun (Jack Ma), and operates five e-commerce sub-companies which operate different aspects of trading.

1.2. Business profile
The English-language web site alibaba.com specializes in business-to-business trades, especially for international buyers trying to contact Chinese sellers. The Chinese-language web site china.alibaba.com focuses on business-to-business trades within China, while www.taobao.com is a consumer-to-consumer trade site for Chinese customers. The Japanese language website "Japan.alibaba.com" is for Japanese customers.

Alibaba Group

Type Founded

e-commerce Hangzhou, China (1999) 6/F Chuangye Mansion, East Software Park,

Headquarters No.99 Huaxing Road, Hangzhou, 310099, China Key people Ma Yun (Jack Ma) Industry Internet

Employees 4,400 (30 June 2007)

Website http://www.alibaba.com Japan's Softbank was one of the earliest investors in Alibaba. Its founder, Masayoshi Son, invested $18 million in the company in 2000 and also participated in subsequent rounds of financing. .

1.3. Sub-companies
As of January 2009, the Alibaba Group is made up of 6 sub-companies: Taobao.com: Online auctions web site for customers. Alipay: Online payments web site, processing mainly payments within China. Alisoft: Provider of web services to the Chinese Small and Medium-sized Enterprise marketplace. Alimama: Online advertising exchange, which allows web publishers and advertisers to trade online advertising inventory. 2

China Yahoo! : As a powerful portal with excellent searching engine, it provides high-quality basic application services for internet users including email, IM, information services and so on. Koubei.com: China's largest communities for exchanging basic life information such as that on clothes, food, housing and travel.

2. Business Model
2.1. Revenue Sources
The revenue of Alibaba.com is generally from the advertisements and payment of members. It’s free to search the results in the websites, but if the firms want to sell the products through the platform, they have to be the members of Alibaba.com and pay for it. Because the high visibility of Alibaba.com, it also earn lots of profit from the advertisements in its websites.

2.2. Revenue Model
The revenue model of Alibaba.com is advertising based. This advertising based is not only the traditional one, but also includes the payment of members, the webpage prepare for the small and medium-size firms belong to another kind of advertisement for the products.

2.3. Cost Drivers
The cost drivers of Alibaba.com are generally the fixed cost and the semi variable cost. Because of the e-business model, the firm has seldom variable cost such as the material cost. The fixed cost includes the cost of revenue, research & development and operation; it takes about 45% of the total cost. The semi variable cost is the cost for selling such as advertisement and the cost of sells man; it takes about 55% of the total cost.

2.4. Critical Success Factors
2.4.1. Clear Strategy To be the best e-business website not only in China, but also all over the world is the mission of Alibaba...
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