Case Study: Alibaba and The Future of Business-BIZ301 Organizational Creativity and Innovation
Instructions:
Students will review and critique the case study: Alibaba and the Future of Business by MING ZENG. Harvard Business Review. Sep/Oct2018. It may be helpful to print the case studyand highlight useful sections and/or take notes as you read. The output will be a 1,200 word report that responds to the following four questions:
1) In the students view, how does innovation and strategy work together at Alibaba Group?
2) Identify the innovation approach the company has successfully used to identify customers’ needs, and how did it help them to continue to stay ahead of the competition?
3) What role does ‘Smart Business’ play in the company’s present success?
4) What roles do leaders like Jack Ma play on companies like Alibaba? What does he bring, personally, to the organisation?
Executive Summary
The case study analysis has taken the case of Alibaba. The Chinese e-commerce giant has revolutionized the e-commerce industry. Its co-founder, Jack Ma, has brought innovation in the company and successfully integrated strategy and innovation. The company has been taking measures to enhance the innovation process through various sources of competitive advantage in its hand. One of the recent moves is to focus on to be smart business. The company has identified the need for customers for microloans. The company has proved that it can see beyond the present condition of the business. This paper has analyzed a case study of the company. Jack Ma and his company are doing business in a way which can keep them ahead of the competition for a long time to come.
Introduction:
Alibaba Group is an e-commerce company in China and is one of the top ten most successful companies in the world. The company, founded in 1999, has revolutionized the e-commerce industry in the past few years. The company offers its platforms to a large number of suppliers and attracts millions of customers. The Alibaba platform offers business-to-business, business to consumers, and consumer-to-consumer sales services to its clients. It is engaged in a diversified array of businesses and believes in forming an ecosystem backed by e-commerce. The co-founder Jack Ma has proven his entrepreneurial skills. His ability to bring innovation to its business has become exemplary. His business model is flexible. Alibaba has unveiled plans to capitalize on huge data of customers to bring innovations into its business (Kim, 2018). The case study “Alibaba and the Future of Business” by Ming Zeng, has taken the case of Alibaba. It has helped to answer various questions about the company (Zeng, 2018).
1-Innovation and strategy work together in Alibaba Group:
Alibaba Group believes in innovation and strategy side by side as it is apparent from its ways of doing business. The strategy of the company was to offer an online retail platform for buyers and sellers. It was an innovative strategy in the beginning, but the company could not consider it enough. It realized that it could do more in its present direction. As a result, the company started working to build an ecosystem. The company adopted a simple strategy to attract buyers and sellers to interact over its platform. Still, with the advancement in technology, the company decided to bring innovation in the strategy. The company noted that more businesses of different kinds of business models are also going online. The company accommodated that business from various sectors, including advertising, marketing, finance, and logistics (Styhre & Sundgren, 2016). It was due to the innovation of the ecosystem, which enabled Alibaba to accommodate all of these diversified businesses. Thus, the company, which started as an e-commerce company, now considered itself a data-driven sprawling company. This is how, company’s simple strategy and innovation work together. The company is a network, which is a combination of sellers, marketers, logistics companies, service providers, and manufacturers. The company is going to capitalize on its expertise in data, and the outcome is data-driven microloan business. It also reveals that there is a difference in creativity, which is an individual level. When it turns to be on the organizational level, then it is innovation. Alibaba is known for its innovation and entrepreneurship. Jack Ma has proved successful entrepreneurship based on innovation (Hatum, 2017).
2-Innovation’s approach of the Company to Identify Customers’ Needs and its Help it to Stay Ahead of Competition:
The company has discovered an innovative approach to identify customers’ needs. It is related to the need of customers for small loans backed by data-driven expertise. The company boasts of having millions of buyers and sellers on its platform, and its data-driven expertise enables it to forecast which supplier is reliable to provide loans. The company’s efforts to develop an ecosystem are the response to customers’ needs because a growing number of businesses are going to attract towards online and e-commerce platform of the company. The microloan business of Alibaba is a recent approach by the company. The company has been lending loans of a small amount to small retailers and businesses. These businesses were unable to get loans to expand their businesses from public or private institutions. The company did not face any demand from its customers that it should start this approach (Mumford, 2011). Instead, it has thought of the idea itself. After initiating this business, the company met customers’ needs. The average loan size of this scheme is only 8000 RMB or $1200. As a result, the company can come up with the business, which can guarantee it a promising future. It is also in line with its strategy to build an ecosystem. In this way, the company stays ahead of the competition. Alibaba and Amazon are organizations fostering innovation and creativity.
Blue Ocean and Red Ocean:
Innovation and resulting opportunities for Alibaba can be presented in blue and red ocean strategy, as in the following. In the following, there are Red Ocean and Blue Ocean strategies of the company to be successful.
| Red Ocean Strategy | Blue Ocean Strategy |
| Competition in the e-commerce market | Capitalizing on existing success from the present business to attract other segments |
| Offering buyers and sellers e-commerce platforms | Developing an ecosystem for different business sectors, customers, and partners |
| Investing in current business and expanding to different markets around the world | Working on smart business ideas and bringing innovation like lending small loans |
3-Role of Smart Business in the Company’s Present Success:
Currently, the company has been working successfully on a unique idea of lending loans to smart businesses. Smart businesses are playing a significant role in the present success of the company. The company has realized that now, the smart business brings competitive advantage. It has learned that smart business puts all players in the business in pursuit of the common goal. Online networks and machine learning techniques enable the business to foresee future and expected customer preferences. Smart businesses make decisions based on algorithms output, and as a result, they are not at risk of making mistakes like human beings. The company has taken an innovative step in this direction, which has guaranteed present success for the company. The company has established Ant Microloans to provide microloans to small businesses. Machine learning and algorithmic output enable the company to decide on the reliability of small businesses. Now, the company lends money to these businesses with trust. The data-driven innovative approach helps the company to evaluate the business’s worth. Thus, the smart business has made the company able to get all players focused on common goals. Four steps can automate all operations decisions. Automation is the reason behind becoming a smart business (Puccio et al., 2017).
4-Roles of Leaders like Jack Ma: Personally to the Organization:
Leaders like Jack Ma play a fundamentally crucial role in companies. They have dynamic attributes that they easily and efficiently adapt to changing business needs. Turning to becoming a smart business is natural for these leaders. If e-commerce companies and their CEOs are compared with companies and CEOs in other industries and sectors, it reveals that leaders of e-commerce companies are famous among the public. Leaders like Jack Ma are always innovative, and their brains think dynamically. It is an inevitable result of the nature of their business, which keeps opening doors of new opportunities for them. For instance, Jack Ma has become an inspiration for employees and customers. Even partners get inspirations from him because he provides them with a platform to earn. He can think out of the box, and he can bring solutions because of innovative solutions possessed by him. The availability of massive data and the ability to process data make them realize that they can bring more innovations. As a result, when they bring new business ideas, it represents the demands and needs of many others. Their eye on the evolution of industry trends makes them relevant. These attributes personally benefit their respective organizations. The role of leaders develops a culture, which affects organizational strategy through creativity and innovation (Alan, 2010).
Conclusion:
The paper concludes that innovation and strategy may work together as Alibaba is doing so. The company has been innovative in anticipating evolution in its industry and a change in customers’ needs and requirements. The concept of smart business is its best example that the company has been capitalizing on data from its customers. The company has been able to initiate microloan-lending business. The business is based on a data-driven approach. The case shows that creativity and innovation are two different processes. Creativity at the organizational level is called innovation, and Jack Ma has proved innovation is the real competitive advantage.
References
Alan, E., 2010. nnovative Knowledge Management: Concepts for Organizational Creativity and Collaborative Design: Concepts for Organizational Creativity and Collaborative Design. 1st ed. IGI Global.
Hatum, A., 2017. Mastering Creativity in Organizations. 1st ed. Edward Elgar Publishing.
Kim, Y.-C., 2018. Alibaba: Jack Ma’s Unique Growth Strategy and the Future of Its Global Development in the Chinese Digital Business Industry. he Digitization of Business in China, pp.219-47.
Mumford, M.D., 2011. Handbook of Organizational Creativity. 2nd ed. Academic Press.
Puccio, G.J., Cabra, J.F. & Schwagler, N., 2017. Organizational Creativity: A Practical Guide for Innovators & Entrepreneurs. 1st ed. SAGE Publications.
Styhre, A. & Sundgren, M., 2016. Managing Creativity in Organizations: Critique and Practices. 2nd ed. Palgrave Macmillan UK.
Zeng, M., 2018. Alibaba and the Future of Business. Harvard Business Review , (September-October), pp.88-96.
