Strategic Management and Leadership

Topics: Strategic management, Alibaba Group, Strategic business unit Pages: 12 (3755 words) Published: January 3, 2013

The Alibaba Group’s Success

The Alibaba Group’s (Alibaba) success can be measured by using the Balance Scorecard – a method to measure a company’s qualitative and quantitative critical success factor (Kaplan and Norton, 2006). In terms of financial achievement, according to Wulf (2010) in 2007, the IPO of the business-to-business (B2B) raised $1.7 billion and almost tripled in value in the very first trading day. In 2009, the Group’s revenue had grown to $636 million under the year-to-date statement after the founder Jack Ma launched the various independent businesses. Pure optimistic financial indicator doesn’t equal to a business success, it needs to be measured from other areas such as, customer, process and learning and growing perspective (Kaplan and Norton, 2006). This Group reached about 200 million users in more than 240 countries and regions’ Internet users. The value-added programs like Gold Supplier and China Trustpass membership program with ‘Storefronts’, which expose the company profile, and real performance analysis has increase buyer’s confidence and satisfaction. Likewise, the Alipay launched in 2004, held payments on behalf of consumers until the purchased good confirm been delivered has encouraged online commerce.

From the process perspective, ever since the Group businesses become increasingly complex, various permutations of the top management team always considered by Jack Ma. In this respect, the Chief Operating Officer (COO) will responsible to catalyze the cross-platform business development in order to cut cost. Also, there are many common core technologies used by Alibaba’s subsidiaries, but a decentralized technology strategy has expedited the process for the Group to become the China’s e-commerce market leader. In addition, product diversification strategy from to Taobao, Tmall, Etao, Aliyun, China! Yahoo, Alipay, Ali-Advance, Alisoft and Alimama has expanded the channels offering, improve company profitability and excel at technology as well as product development (Alibaba Group Holding Limited, 2008). From the learning and growth perspective, Alibaba preferred not to set one size fits all strategy, but decentralized approach to encourage its subsidiaries to set its own strategy proactively, simultaneously compete each other and focus the best in their respective businesses. However, Jack Ma does fostered community building exercises and training sessions to encourage continuous learning. Annual strategy review sessions to discuss long-term strategy and implement change through bottom-up and top-down process also enable knowledge sharing in the Alibaba Group (Wulf, 2010). Alibaba indeed a very successful company!

The Strategic Reasons behind Success

a. Strategy Leadership

When Alibaba is founded in 1999, Jack Ma, founder and CEO of Alibaba, the first China entrepreneur who appear on the cover of Forbes Magazine at the same time ranks as one of the world's billionaires ( LLC, 2012) declare that:

Small and medium-sized enterprises are like grains of sand on a beach. The Internet can glue them together. It can make them into an invincible force that is able to go up against the big stone. The virtue of the Internet is that it uses small to compete with big, it uses fast to compete with slow. (Shiying and Avery, 2009, pp.50)

By the year 2000, Ma led his team to determine the Alibaba’s mission statement – ‘To make it easy to do business anywhere’. Under his leadership, employees who work directly under him are world-class professionals and Alibaba become a multinational company just in a year time, with employees from thirteen countries who can unite and fight for tomorrow’s business challenges (Shiying and Avery, 2009).

Strategies used by Jack Ma - maintain the competition among the subsidiaries through the decentralized strategy; made independent business unit report directly to him; promote cross-business opportunities among Alibaba...
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