Creating other successful portal in the future will be hard given that the lock-in effect makes the task difficult. Alibaba.com as an early entrant into the B2B portal market in China has built a strong advantage over its competitors; anyone who would want to challenge them will face some barriers to enter the market because as a starter, people will show preference for Alibaba.com, because of the experience, some people also develop loyalty or simply because they know the company.
Alibaba.com charges foreign sellers a lower annual fee for a TrustPass membership because Ma, the owner wants to attract the global companies, which spend most of their efforts on business with large companies, by giving them a good deal this companies will spend their money in China, with these SMBs that are paying Alibaba.com. In the other hand Alibaba.com charges $8000 or more for their annual listings as China Gold Suppliers because the owner believes that opportunities lie in connecting SMBs around the world with SMBs in China, which represents extensive traveling and expenses that this Chinese SMBs save by being part of Alibaba.com, they charge the Chinese companies with this membership for translating and listing their information. Ma is a smart guy because he identified a need and is covering it; by doing this he is helping not only his own pocket but his country’s economy by producing jobs and helping these SMBs to grow. Although he should raise the annual fee membership because as large companies, these companies have enough money to pay for a membership where the SMBs companies need some help in this aspect, he should raise the fee to the foreign companies to compensate the lowering in the fee to the Chinese SMBs.
One of the oldest lines of business is GE Lighting; they solicit bids from a variety of suppliers for indirect materials and machinery replacement parts .The online system made it easier to send out bid packages which allows the...
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