BEIJING, Feb. 29 /Xinhua-PRNewswire/ -- CCID Consulting, China's leading research, consulting and IT outsourcing service provider, and the first Chinese consulting firm listed in Hong Kong (Hong Kong Stock Exchange: HK08235), recently analyzed Alibaba's implementation of its new corporate strategy.
Towards the end of last year Alibaba made a high-profile announcement about the reorganizing of its corporate structure, as well as senior management changes and the reduction of staff at Yahoo! China. Alibaba has defined for itself a magnificent goal, as declared at the Company's IPO -- 'to build a perfect ecological e-business chain and make Alibaba a great world-class company created by Chinese people. After the successful listing, Alibaba acquired necessary capital as well as incentive mechanisms for sustainable development. In the next stage, Alibaba will enter the phase of strategic goal implementation, going along with great challenges.
In Alibaba's development history, Mr. Ma Yun considers mission, value and strategic targets as his life. Alibaba's mission is to make it easy to do business anywhere. What's more, Alibaba considers team spirit, quality, facility, passion, openness, innovation, service and respect as its core values.
During the establishing of a global e-business operating system, Alibaba needs to build a more robust and stronger e-business infrastructure, which will form the key competence of Alibaba. As the number and involved area of transactions increase rapidly, e-business infrastructure will become the engine of Alibaba's e-business transactions to ensure a more reliable, robust and smooth transaction environment. Also, its e-business infrastructure will help Alibaba to integrate its different business mode to satisfy the demand of business innovation. It is obvious that Alibaba's e-business infrastructure will be an important investment direction that Alibaba will benefit from.
It is necessary for Alibaba to clearly define its strategic focus clearly in order to achieve solid development. During the establishment of an ecological e-business chain, Alibaba should think about its business development strategy deeply: In B2B, should the focus be on expanding business scale or optimizing business structure? In B2C, should the focus be on extending business scope or enhancing business profitability? In market development, should the focus be on opening up a new overseas market or deep ploughing on the stock market? In strategy making, should the focus be on integrating resources among the industry chain or developing new business?
Taking the business structure and layout of Alibaba into account, the recent focus of Alibaba is to accelerate the growth of B2B and B2C business, speed up overseas market development and strengthen platform resource integration. In the current industry chain of Alibaba, the market scale and customer aggregation of Yahoo! China's network search didn't reach the expected target. Yahoo! China is currently not a contributor of income and profit for Alibaba. Hence, the restructuring of Yahoo! China was inevitable. In December 2007, Yahoo! China cancelled the original three departments (new media department, network search department, and communications department), and established two new departments (Website operating department, and Mailbox operating department). The merging of network search and e-business and digging in potential value of network search will be the future development direction of Yahoo! China. On the other hand, e-business search technology development will be a focus, which takes network search from a profit center to a cost center.
Integration will be another important step for Alibaba. Alibaba integrates information flow, capital flow and logistics into a uniform ecological chain, of which the majority of customers are 'long-tail' customers distributed all over the world, including SMEs and individuals. The service mode comprises B2B and B2C. The integration of different regional resources and integration of business resources are two key parts in the implementation of resource integration. The establishment of the Group Search Technology Development Center, P4P Operating Center, and Media Sales Center should focus on the resource integration to promote the common value of B2B and B2C business.
The implementation of new strategies requires Alibaba to have new abilities. World-class companies need world-class leadership and entrepreneurial spirit, which means Mr. Ma Yun and his leadership team have to have global viewpoints and strategic visions. World-class companies require heads to be experienced in international operations and global value chain operations, while also being familiar with business and legal environments among different countries. These requests cannot be covered by the young employees of Alibaba, hence, Alibaba's decision to launch another strategy: the study, dismissals, and upgrading of the current management team. Suitable people will be promoted to higher positions, while the unsuitable will be further educated, or possibly even dismissed. In December 2007, Alibaba Group announced several personnel changes: Mr. Zeng Ming of Yahoo! China transferred back to Alibaba Group; Mr. Lu Zhaoxi, the original CEO of AliPay transferred to CEO of Taobao.com; Mr. Jin Jianhang, the vice president of Alibaba Group transferred to CEO of Yahoo! China; Mr. Shao Xiaofeng, the vice president of Taobao.com transferred to CEO of AliPay; Ms. Zhang Yifen of Yahoo! Search transferred to vice president of Group P4P Operating Center; while Mr. Sun Tongyu, the president of Taobao.com, Mr. Li Qi, the COO of Alibaba Group, Mr. Wu Jiong, the CTO of Alibaba Group, and Mr. Li Xuhui, the Senior Vice President were all dismissed. And then, on January 24, 2008, Alibaba announced the layoff of 100 employees in Yahoo! China. From all these activities, it is clear that Alibaba is determined to build a world-class team and make this team suitable for the development strategy.
Facing all the challenges, a successful strategy implementation can realizes Alibaba's goal, that is, market value reaching $100 billion in three years, while also becoming one of the top three Internet companies within ten years.
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