PART III: COMPREHENSIVE CASES
ISS Cenler for Management Research
Case 5 Alibaba in 2011: Competing in China & Beyond
"Alibaba has a first-mover advantage that makes it very hard for competitors to chip away at their lead in the rnarket."i -DICK WEI,
Analyst, J.P. Morgan Securities Inc., 1 in 2007.
"For LIS, the goal has been to build a company that lasts 102 years and a company that changes China. We 're only six years old, so while other people may call us a success, we still do not consider ourselves successful yet. We have a long way to go and the intense competition is what keeps us sharp. The success we 've had so far has not made us lose our edge. "ii
- JACK MA,
Founder and CEO ofAlibaba.com, in 2006.
"If there's a company outside ofAmerica that can intrvduce a new bLtSiness model to the world, it's Alibaba."iii -MASAvosHI SoN,
Founder and CEO, Softbank Corporation, 2 Japan, ill 2005.
On November 11, 201 1, Bloomberg3 reported that China's
leading e-commerce company, A libaba Group (A1ibaba), in
association with Softbank Corporation (Softbank), The Blackstone Group4 (Blackstone), and Bain Capita15 (Bain), was considering making a bid for Yahoo! Inc. 6 (Yahoo!). While Jack Ma (Ma), founder and CEO of Alibaba, expressed an interest
in buying back Yahoo!'s 40 percent stake in Alibaba, Softbank wanted to buy Yahoo!'s 35 percent stake in Yahoo ! Japan.
Blackstone and Bain were reported to be participating in the bid to buy Yahoo!'s remaining operations in the US.iv
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This case was written by Hadiya Faheem , under the direction of Debapratim Purkayastha, IBS Hyderabad. It was compiled from published sources, and is intended to be used as a basis for class discussion rather than to illustrate either effective or ineffective handling of a management situation. 1
J.P. Morgan Securities Inc., New York City, New York, USA is the nonbanking subsidiary of JPMorgan Chase. It focuses on activities related to investment banking.
Softbank Corporation, headquartered in Tokyo, Japan, is a leading Japanese telecommunications and media company. It has investments in e-commerce, financial services, Internet infrastructure, IT-related distribution services, publishing and marketing, and technology services.
Bloomberg is a U.S.-based financial news reponing company.
The Blackstone Group is an asset management and financial services company. s Bain Capital is a Boston-based private-equity firm.
Yahoo! Inc., headquanered in Sunnyvale, California, USA, is an online ponal with a net\vork of websites-news, search engine, entertainment, e-commerce, etc. Its primary source of revenues is through online advenising, but it also offers commercial services such as online marketing, etc. 7
B2B or Business-to-Business e-commerce is trading between two businesses using the Internet.
C2C or Consumer-to-Consumer e-commerce is trading between two consumers through the Internet.
Alibaba had several Internet businesses focused o n
various e-commerce business models such as Businessto-B usi ness7 (B2B), Consumer-to-Consumer8 (C2C), and Business-to-Consumer9 (B2C). It also had a presence in
the intensely competitive web search market. In 20 J0, the
company had also launched a transaction-based wholesale
platform, A liExpress, for Chinese merchants to sell goods
to foreign buyers. Being one of the first companies to enter the Chinese Internet industry, Alibaba played a major role in bringing about an Internet revolution in the country (refer to Exhibit I for a bri ef note on the Internet market in Ch ina). Alibaba was launched with the v ision of serving the...
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