IV. Case analysis (30 points, 15 points each) The internet and e-commerce are emergent phenomena in China. Altho ugh they are only surpassed Just 12% of not adequately reflect the rapid pace of technological Online purchases are experiencing e-commerce utilization rate of only 28% in China SME's to promote their businesses with 3rd party online services, the potential for B2B e-trade to grow dramatically in the upcoming years is great. by the number of U.S. users, China's 162 million internet users represent the country's population. The 3% annual increase in internet penetration does change occurring in the industry. double-digit growth each quarter. With a current and government encouragement for Alibaba.com is the largest business-to-business e-commerce company Alibaba.com is a transaction-based business. After providing years of free services establish a broad base of registered users, it is appropriate for management to establish a more direct link between value created and revenue generation through an overhaul of its pricing strategy in China. The company provides a storefront for 2.4 million businesses, yet has a paying customer base of only 219,098 members. Its sales force and customer support team are credited with attracting and retaining the company's extensive user base (especially its population of paid members). Dedicated to enhancing the user experience, they are also responsible for channeling market feedback to drive new product development efforts. Sales and Marketing expenditures represent 45% of revenue. However, Product Development is allocated only 8% of revenue to produce innovative services specifically matched to the lucrative SME sector of online B2B trade. n The following table highlights the discrepancy by comparing the Alibaba's international and domestic marketplaces along several measures. 11 13R International Marketplace Domestic Marketplace Registered Users 3.1 million 16.6 million 84% of total 85% growth rate 16% of total 60% growth rate (87%) 189,573 162,156" Paying Members Revenue Revenue per user Revenue per paying member 29,525 431 ,481 * (13%) (27%) (73%) 139.19 Rmb 9.77 Rmb 14,614 Rmtb 855 Rmb thousand Rmb Questions: 1. Address the critical strategic issues and considerations raised during the SWOT analysis. 2. Based upon the Alibaba's internal and external environmental analysis, formulate strategy to maximize its potential for success