Alibaba Group Alibaba Group The following questions are based on key symptoms (both favorable and unfavorable) of Alibaba Group and underlying causes that affect key symptoms as they are observed in the case. In addition, there is a general question on solutions that also addresses the causes. Each multiple choice and short answer question number under Key Symptoms corresponds to the same question number under Underlying Causes (eg. Question 3 under Key Symptoms 1 corresponds to Question 3 under Underlying Causes 1). Before beginning this exercise, you will need to read the Alibaba Group case, This activity is important because, as a manager concerned with making strategic choices, you have to be able to properly assess the internal and external environment impacting the business. The first step is to identify the underlying causes that are driving business results, and then identify the major symptoms that should be considered. The ultimate objective is to make an actionable and reasoned recommendation that the company should pursue to meet their established business objectives The goal of this exercise is to determine that you have adequately analyzed the case and determined the underlying causes critical to making a reasoned recommendation about future action Read and analyze the case and answer the following questions related to Ababa Group Underlying Causes 1 www Required information 1. Increasing revenue and the tremendous growth trajectory of the company provided promising evidence that they would not have problems competing in the North American Market in 2014. What changed in 2018 to indicate the company would have to confront challenges? Revenue decreased but the marginal cost of revenue was decreasing Revenue decreased but the marginal cost of revenue was increasing Revenue increased but the marginal cost of revenue was increasing Revenue increased but the marginal cost of revenue was decreasing 2. Albaba Group's revenue is generated through a range of diverse fees. For instance, merchant fees are charged to users based on number of units sold in retail centers. More than 50 percent of revenue is earned through account maintenance service fees. fixed fees from wholesaler centers variable fees from merchant fees online advertising efforts 3. The structure of the company is complex and growing globally with many divergent e-commerce trading relationships. Is the complexity a strategic asset or a liability that will impede the realization of strategy? 3. The structure of the company is complex and growing globally with many divergent e-commerce trading relationships. Is the complexity a strategic asset or a liability that will impede the realization of strategy? Expansion and complexity are liabilities that will limit the expansion of functionality and the potential user base Expansion and complexity are necessary to satisfy the Chinese government's demands Expansion and complexity are necessary to keep employees highly engaged because of low wages the company pays Expansion and complexity are assets necessary to expand functionality and the potential user base. 4 A key factor enabling Alibaba to grow rapidly is the labyrinth-like internal structure that is complex when compared to most business models What is the key to harmonizing the various businesses into a cohesive company? developing businesses with a focus on speed, accepting that some businesses will fail developing businesses that focus on adjacent markets and sharing capabilities across the business group developing businesses that focus on competing directly with Amazon in the North American market developing businesses in consultation with the Chinese government that help manage the complex structure structure 5. To dominate the global e-commerce market, Alibaba has an absolute demographic advantage because Chinese digital market is expected to remain the world's largest Chinese open borders policy gives Alibaba access to the largest market the location in Asia gives Alibaba easy access to the greatest number of consumers. the Indian market is not expected to grow in a meaningful way. Alibaba Group Alibaba Group The following questions are based on key symptoms (both favorable and unfavorable) of Alibaba Group and underlying causes that affect key symptoms as they are observed in the case. In addition, there is a general question on solutions that also addresses the causes. Each multiple choice and short answer question number under Key Symptoms corresponds to the same question number under Underlying Causes (eg. Question 3 under Key Symptoms 1 corresponds to Question 3 under Underlying Causes 1). Before beginning this exercise, you will need to read the Alibaba Group case, This activity is important because, as a manager concerned with making strategic choices, you have to be able to properly assess the internal and external environment impacting the business. The first step is to identify the underlying causes that are driving business results, and then identify the major symptoms that should be considered. The ultimate objective is to make an actionable and reasoned recommendation that the company should pursue to meet their established business objectives The goal of this exercise is to determine that you have adequately analyzed the case and determined the underlying causes critical to making a reasoned recommendation about future action Read and analyze the case and answer the following questions related to Ababa Group Underlying Causes 1 www Required information 1. Increasing revenue and the tremendous growth trajectory of the company provided promising evidence that they would not have problems competing in the North American Market in 2014. What changed in 2018 to indicate the company would have to confront challenges? Revenue decreased but the marginal cost of revenue was decreasing Revenue decreased but the marginal cost of revenue was increasing Revenue increased but the marginal cost of revenue was increasing Revenue increased but the marginal cost of revenue was decreasing 2. Albaba Group's revenue is generated through a range of diverse fees. For instance, merchant fees are charged to users based on number of units sold in retail centers. More than 50 percent of revenue is earned through account maintenance service fees. fixed fees from wholesaler centers variable fees from merchant fees online advertising efforts 3. The structure of the company is complex and growing globally with many divergent e-commerce trading relationships. Is the complexity a strategic asset or a liability that will impede the realization of strategy? 3. The structure of the company is complex and growing globally with many divergent e-commerce trading relationships. Is the complexity a strategic asset or a liability that will impede the realization of strategy? Expansion and complexity are liabilities that will limit the expansion of functionality and the potential user base Expansion and complexity are necessary to satisfy the Chinese government's demands Expansion and complexity are necessary to keep employees highly engaged because of low wages the company pays Expansion and complexity are assets necessary to expand functionality and the potential user base. 4 A key factor enabling Alibaba to grow rapidly is the labyrinth-like internal structure that is complex when compared to most business models What is the key to harmonizing the various businesses into a cohesive company? developing businesses with a focus on speed, accepting that some businesses will fail developing businesses that focus on adjacent markets and sharing capabilities across the business group developing businesses that focus on competing directly with Amazon in the North American market developing businesses in consultation with the Chinese government that help manage the complex structure structure 5. To dominate the global e-commerce market, Alibaba has an absolute demographic advantage because Chinese digital market is expected to remain the world's largest Chinese open borders policy gives Alibaba access to the largest market the location in Asia gives Alibaba easy access to the greatest number of consumers. the Indian market is not expected to grow in a meaningful way