vers 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
strategyTo be the best e-business website not only in China, but also all over the world is the mission of Alibaba Corporation. The clear strategy is the beginning of the team of Ma Yun and the highest demand of all the team members. The right strategy born with the right period of e-business development in right place of China, that makes the half success of Alibaba.
2.4.2. Effective Execution
The ability of effective execution is the sign of a mature team. CEO Ma Yun, CFO Cai Congxin, CTO Wu Jiong and CPO Guan Mingsheng are all the best members in their own area before join in Alibaba. Their high experience of managing a team and maximum the performance of each employer is the success factor of Alibaba. They refine each activity to be feasible, high effective and high feedback, which make Alibaba to be one of the business deifies.
2.4.3. Special Culture
Without a charismatic culture, a firm can not attract the excellent employers and investors. In the low of Alibaba Corporation, the wage of each employer is just 500 RMB, which is near the lowest 3
wage in that period. But the team didn’t break, even more, it attracts the million dollars earning investor Cai Congxin to join in the team, that’s the charismatic culture to help the firm across the obstruction.
3.
Five Forces Analysis
3.1.
Barriers to Entry
High returns will draw firms. This results in many new entrants, which will effectively decrease profitability. With the development of B2B market and long time high profit of Alibaba.com, There are more and more new websites try to copy the business mode of Alibaba.com. The most common way to entry B2B e-market is try to position its target market to a single industry. For example, in the recently 2 years, finechemical.com for the chemical products and Textilehome.com for the textiles and so on. Although these firms don’t have the broad market as Alibaba.com, in another word, they share the special market of Alibaba.com because they are more professional and targeted.
3.2.
www.51luwen.orgBuyer Bargaining Power
The buyer bargaining power is the ability of customers to put the firm under pressure and it also affects the customer's sensitivity to price changes. For Alibaba.com, the customers are generally the medium and small-size firms which don’t have the ability or don’t need to build up their own websites. To negotiate with the biggest B2B e-platform, these firms don’t have too many advantages to fight for lower cost and nearly all the standards are decided by the Alibaba.com. But with the development of B2B websites, the customers may have the opportunity to choose the other platform and that will also be the opportunity to negotiate with Alibaba.com for more rights.
3.3.
Supplier Bargaining Power
Suppliers of raw materials, components, labor, and services (such as expertise) to the firm can be a source of power over the firm. Suppliers may refuse to work with the firm, or e.g. charge excessively high prices for unique
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