Current strategies of Alibaba using porters 5 forces and also Alibaba market

innovation

Alibaba operates a total of five e-commerce businesses. Ma Yun established Alibaba in 1999.
Hangzhou, China, is home to this global marketplace and auction web. In addition to English and
Chinese, the website is available in both. B2B sales platform Alibaba connects worldwide buyers
with Chinese companies. In addition to English and Japanese, consumers in Japan have access to
a third language website. It's written in Japanese like you'd expect it to be. Alibaba makes money
from membership fees collected from businesses that use its marketing services. Buyers are not
compelled to join the organization (Julia, 2010).

Following is a detailed Porter Five Forces Model Analysis of Alibaba strategy and market
innovation.

Competitive Rivalry - High

A company's strategy might be drastically altered and its options reevaluated if it is subjected to
intense competition. Alibaba is facing a lot of competition from its rivals in the market. They
include both Chinese and non-Chinese websites of all kinds. Amazon.com and eBay are just a
few of the corporations' many rivals to contend with. Daraz is a direct competitor. For example,
in Pakistan and Yayvo.com. Profits at Alibaba have declined over time due to the growth of
other complementary industries.

Other platforms can't connect buyers directly with manufacturers. Thus Alibaba has a distinct
advantage. It is also less expensive to buy from Alibaba than from one of its main rivals. Many
buyers' mistrust of Chinese goods puts Alibaba in jeopardy. As a result, Alibaba's rivalry is
intense.

Threat of New Entrants - Low

E-commerce enterprises can easily be created in China, even if they are small and focused.
However, without significant upfront investment and established distribution channels, it would
not be easy to build a global online market the size of Alibaba. You'll need their trust to convince
manufacturers to pay a registration fee with you. New technology is required to operate an online
store 24 hours a day and serve a huge number of clients concurrently. Alibaba was formerly
regarded for its high profitability and long-term outlook. Additionally, new entrants may be
unable to use existing companies' economies of scale, resulting in sluggish operational expenses
and earnings (Kudasov, 2015). Alibaba appears unfazed about newcomers.

Bargaining Power of Suppliers - Low

Without a doubt, there are suppliers in Alibaba's marketplace who sell goods sourced from
Alibaba. Almost any product is available on Alibaba's marketplace, owing to the company's huge
supplier network. Suppliers must pay a membership fee to list their products on this well-known
websiteWithout a doubt, there are suppliers in Alibaba's marketplace who sell goods sourced
from Alibaba. Almost any product is available on Alibaba's marketplace, owing to the company's
huge supplier network. Suppliers must pay a membership fee to list their products on this well-
known website.. There is never a shortage of fresh Chinese vendors wishing to register on
Alibaba's marketplace. To that end, vendors willing to sell at market prices will find it easy to
join Alibaba. When it comes to raising the market pricing, any supplier will fail. There is no
charge for suppliers to move over to Alibaba. Suppliers' bargaining power against Alibaba is
insignificant.

Bargaining Power of Buyers - Medium

Alibaba's consumers come in the form of both individuals and businesses from all over the
world. For most clients, Alibaba is the sole option because of its low prices, huge selection, and
extensive distribution network. They will have to pay a higher price for their items if they switch.
Despite the absence of a switching cost, they will have difficulty competing in an online market
as vast as Alibaba. Alibaba has many buyers, which makes it more difficult for purchasers to
exert market power. However, niche internet marketplaces have emerged in recent years,
acquiring market domination by specializing in specific niches. These are the possible
alternatives for buyers. As a result, customers have little bargaining power in comparison to
Alibaba.

Threat of Substitutes - High

Alibaba is not the only option. The most prevalent retail outlet is a physical store that sells low-
priced goods. Second, a rising number of Chinese producers are exporting directly to consumers.
Suppliers' use of social media sites is also increasing (Zheng, 2015).
References
Julia, K.P., 2010. Feasibility Study and Business Plan. [Online] Available at:
http://www.511unwen.org/UploadFile/org201009101017406801/alibaba.com.pdf [Accessed 19
June 2017].

Kudasov, A., 2015. Alibaba Global Strategy. [Online] Available at:

http://www.slideshare.net/akudasov/alibaba-global-strategy [Accessed 19 June 2017].

Zheng, J., 2015. Porter's Five Force analysis on Alibaba. [Online] Available at:
https://mgmt7160jz.wordpress.com/2015/02/10/porters-five-force-analysis-on-alibaba/
[Accessed 19 June 2017].