Write in a paragraph or two a strategic analysis comparing Alibabas with Ebay and VIPS (Vipshop...
Write in a paragraph or two a strategic analysis comparing Alibabas with Ebay and VIPS (Vipshop the Chinese company) using Porter's 5 forces analysis model.
Strategic management is a process that assesses and manages the business and the administration in which an organization is involved. It assesses its opponents and sets aims and plans to meet all current and potential rivals. With appropriate administration, it is possible to know the result of environmental variations on the business.
Answer and Explanation:
_Comparison with e-bay_
Alibaba merchandising volume is higher for about three to four times than e-bay. E-bay has a more global outlook with the US, and Alibaba has around 95% of revenue from china.
_Porter's 5 forces analysis for Alibaba analysis_
The entry of new players- Arrival of new entrant is a challenge, and both the companies have hard competition. E-bay is at higher risk as Alibaba has more potent user footage in china market, which is somewhere challenging.
Bargaining power of buyer- Here both have fair competition as technologically advanced in electronic trade allow the customer to purchase goods from any place, and this results to improve their bargaining power.
The threat of substitute- it is easy to replicate the model as both have similarities as they approach merchants to make order setup and keep no stock, so they have high threat here.
Competition from rivalry-For Alibaba, rivalry competition is lower as Alibaba is a market guide in China so e-bay has the stiff route.
Supplier power-It does not have high pressure as of competition within the supplier is vast.
_Comparison with VIPS_
The entry of new players- The capital specifications within the industry is high. Therefore, making it difficult for new entrants to set up businesses as compared to Alibaba it has already earned high profits and establishment in the market. Thus, the threat is low for Alibaba
Bargaining power of buyer- Here both the companies have less treat to the buyer as VIPS have a less price-sensitive consumer, and Alibaba has a vast number of buyer with low price.
The threat of substitute-Alibaba has high risk as there are several substitutes, but VIPS have less danger as there are lower ways to switch.
Competition from rivalry- VIPS industry have few competitors, and so all the moves will be noticed that results in weaker competition, whereas Alibaba faces stiff competition
Supplier power-Supplier effort to grow the market rate and Alibaba can quickly bring more supplier. Hence, supplier power is low whereas, VIPS also has weak supplier power as suppliers do not give a credible threat for forwarding combination.
While comparing with VIPS, Alibaba has its market area, customer support along with technology, so threat of substitute is immense for VIPS and will face fierce competition.