1. Alibaba.com was an early entrant into the B2B portal market in China. In about 100 words, explain how this might have created a lock-in effect, especially given the types of businesses the site attracts.
2. Alibaba.com currently charges foreign sellers an annual fee of about $400 for a TrustPass membership, but Chinese companies pay $8000 or more for their annual listings as China Gold Suppliers. In about 200 words, explain why the site has different listing charges for the two types of members and critically evaluate this practice.
3. You learned in Chapter 5 that large companies, such as General Electric and Sears, often require suppliers to follow specific rules if they want to do business (such as using EDI or even a specific EDI VAN). Alibaba.com currently focuses on connecting SMBs with each other. In about 200 words, discuss opportunities that might exist for Alibaba.com to become an intermediary in relationships between Chinese SMBs and large global companies such as General Electric and Sears.
4. In 2003, Alibaba.com launched Taobao.com to compete in the general consumer online auction market against eBay in China. After four years of an intensive and expensive battle, eBay withdrew from China completely. In about 200 words, describe the advantages Alibaba.com might have had over eBay in this new market, then describe the advantages eBay might have had over Alibaba.com. Be sure to include a discussion of lock-in effects where appropriate.
5. In 2005, Yahoo! paid $1 billion for a 40 percent interest in Alibaba.com. Yahoo! was interested in the company's Taobao.com auction site because Yahoo! had not been as successful as it would have liked in developing its own Chinese auction site. However, Yahoo! was also interested in using Alibaba.com's strong reputation in China to help it compete with Baidu.com, the top Chinese search engine site. In about 200 words, describe the ways in which Alibaba.com's reputation could help Yahoo! compete more effectively as a search engine and Web portal in China.
In 1995, Jack Ma taught English in Hangzhou, China, a city near the economic center of Shanghai. Ma wanted to get into the business world, so he raised $2000 from relatives and friends to start Chinapage.com, one of the first Chinese online businesses. He followed that experience with a job at the Ministry of Foreign Trade and Economic Cooperation. He grew frustrated with the slow pace of the government bureaucracy and left after a year to start his own company again. He placed an ad on the Internet advertising a language translation service for companies that wanted to do business in China. Within two hours, he had received six e-mailed inquiries. About 60 percent of the Chinese economy is manufacturing, and 90 percent of manufacturing companies are small or medium-sized businesses. Ma began collecting information from Chinese manufacturing companies that wanted to do business internationally. He translated and organized the information, then posted it on a B2B Web portal site he named Alibaba.com.