MBA ME 阿里案例分析.docx

MBA ME 阿里案例分析.docx

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MBAME阿里案例分析

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Course:

Microeconomics

Instructor:

HuSonghua

Homework:

Caseanalysis

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StudentIDNo.:

Class:

14PA

STUDENTDECLARATION

Ideclarethatthisassignmentismyownwork,whichallsourcesofreferenceareacknowledgedinfullandithasnotbeensubmittedforanyothercourse.

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……………………Date:

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HowMaYunBuiltUpHisBusinessEmpireByMeansofMicroeconomics

Part1.E-commerceornothing

Almosteverybusinessconcernsabouthowtoincreaseprofitsandreducecosts.Inmanufacturingenterprise,productioncostandmanagementcostcurrentlyhavemanyeffectivemeasurestocontrol,buttheexternalcostofsales，asfortheimpactofvariousaspectsofuncontrollablefactors,isdifficulttocontrol,especiallythechannelcost.

Costofsalesismainlycomposedofthechannelcost,andthechannelcostismainlypaidtothedealersalesrebate.Ifremovethesaleslinkofthedealer,andallowenterprisesdirectlyfacethecustomer,cangreatlyreducethetotalcostoftheenterprise,lowercommodityprices.

Forexample,theretailgiantWAL-MART,thathasbeenatthelowestpriceofcommoditythatdominatedthemarket.BecauseWAL-MART'sproductsaredirectlyfromthefactoryatthelowestex-factorypriceofpurchase,soitcankeepthelowestsellingprice.

Taobao'ssuccesscountsonthatletallthesellersdirectlyfacetoconsumersviainternet,whichreducestheintermediateinterface,thusbenefitconsumersbyreducingthecostofsalesandloweringcommodityprices.

Undertheconditionofunchangedconsumers’income,thefallingofcommoditypriceactuallymakesthespendingbudgetconstraintlinemovefromA1toA2whichimprovedthelevelofspendingbudgetconstraintline.Sothatmorecommoditiesareconsumedandmarketdemandisincreased.

（A1istheoriginalspendingbudgetconstraintlinewhileA2istheonewhichisinfluencedbyE-commerce.）

Inviewofthecharacteristicofthelowmarginalcostofelectricindustry,wethinktheindustry,comparedtotraditionalindustry,iseasiertoformscaleeconomy.Ali’sIPOfinancialreportshows,themainoperatingcostoftheenterpriseisthesalesandmarketingexpenses,accountingformorethan70%ofthetotalcost.Inthiscase,Ali’severyincreaseofaclienttoitsmarginalcostisalmostzero.Sotheaveragetotalcost（ATC）curveshowsdownwardtrend,astheformationofscaleeconomy.

Part2.Asymmetricinformation

Inthee-commercemarket,thesellerknowsmuchmoreaboutthequalityoftheproductthanthebuyerdoes.Unlesssellerscanprovideinformationaboutqualitytobuyers,low-qualitygoodsandserviceswilldriveouthigh-qualityones,andtherewillbemarketfailure.

SoTaobaoallowscustomerstorateandcommentonproducts,theratingandcommentingfeaturereducesthelemonsproblembygivingcustomersmoreinformationandmotivatingthesellerstoupholdtheirendofthebargain.

Basedonthesalesrevenueandthebuyer’scomments,Taobaowillgivethesellerareputationrate,suchasthecrownclass,thediamondclassandsoon.Underthepressureofthereputation,thesellerhaslessmotivatetoselllow-qualityproducts.

Part3.DoubleEleventh

ThepromotionalstrategyofSingle’sdaythatLaunchedbyAlibabaachievedremarkablesuccessinpastseveralyearsinarow,whichbrokecontinuouslyhistoricalSalesPeakinonly24hoursonNov-11-2014.

AkeyfactorcontributedthesuccesswastheeffectofPricedifferentiation,whichisapricingstrategywherelargelysimilargoodsorservicesaretransactedatextremelyLowpricesIncertainperiod,SalesVolumeismanipulatedforthepurposetorealizeProfit.

AlibabatookgooduseofthisStrategyandpreciselycapturedConsumerPsychologyandBehaviors,withunionwithstoreowners,theycreatedunprecedentedcampaignwiththeintentionofenlargingonedaySalesScaletostimulateoverallSalesAmount.Productsin“11-11“decreasedsignificantlyinjustonesingleday,Customers’payingwillingnesshadalreadybeenstimulatedandencouragedtoanunbelievablelevelwiththeday“11/11”approaching.

FromthereportofSingle’DaywecanseethatCustomers’enthusiasmhadbeensuccessfullyaroused,Alargenumberofthembecameirrational,it’sNOTstrangeatallthatweheardsomeofthemlosttheirmindbuyingproductsthatturnedouttobeuselessandsomeworriedaboutBankbills.

Althoughunitcostofproductsinthatdaylookeddeclinefromappearance,theeconomiesofscalewereactuallyrealized,whichenabledstoreownersearnmuchmoreprofitsfrommillionsofcustomers’purchasing.Inaddition,CompetitiveLowerpricecanberegardedasanadvertisementthatkeepsattractingthousandsofpotentialandoldcustomers’revisitandconsumption.

TheshoppingstrategyofDoubleEleventhinAlibabaisverysuccessfulwhichmadeaturnoverroseyearbyyear.Thisstrategyismadefulluseofpricediscriminationandfurtherearnmuchmoreconsumersurplus.

Part4.Thelongtailtheory

AfteroccupyingthehalfmarketofE-commerce,TaobaolaunchedTheBalanceofTreasureintothefinancialservicesmarketin2013.Alibabamakefulluseofitsresourceadvantagesanddeveloptheeconomiesofscope.

AlibabalaunchedTheBalanceofTreasureunderthestrongsupportofthehugenumberofusersfromAlipay,whichcostisverysmall.LaunchingAlipayandTheBalanceofTreasuretogethercostmuchlessthanseparately,becausethesetwooperationscansharethemajorityoffixedcostssuchas:

serverpurchase,soAlibabahavescopeeconomics.

ThesuccessofTheBalanceofTreasureowetothelongtailtheory.Mostoftheuserconsumptionamountisverysmall,butthenumberishuge.Thetraditionalfundmanagementaveragingraising70000to80000yuanofinvestment,buttheuserofAlipayonlycontribute￥1912.67perperson.Althougheveryuserinvestonlyafewhundreds,itamountsto800million,andsurprisethefinancialmarket.

Thetraditionalbusinessconsiderthat80%ofthesalescomefrom20%oftheproducts,butthelongtailtheoryarguesthattheriseoftheInternethasbrokentherule.Thelongtailtheorysaysthat,aslongasthestorageanddistributionchannelsarelargeenough,thesmalldemandproductscanearnevenbiggermarketsharecomparedtothestrongdemandproducts.Manyofthesmallmarketthatcanrivaltheconvergingwiththemainstreammarket.

Thelongtailtheoryhasbecomeaneweconomicmodelandhasbeensuccessfullyappliedinthenetworkeconomy.Inthefinancialproductmarket,thetargetcustomersareusuallythosewithhigherincomeswhichmakeahighbarriertofinancialproduct.However,quitetotheopposite,accordingtothelongtailtheory,TheBalanceofTreasureexpandsthescopeoftargetcustomerswhicharewarmlywelcomedbythoselow-incomepeople.Thatisreallyabigimpactonthefinancialproductmarket.

Part5.ThefutureBusinessTrendofChina——OligopolyCompetition

Actually,TheIndustryofE-CommerceBusinessinChinacanberegardedasOligopolyCompetition.

InQ3of2014,T-mall,Awell-knownE-CommerceBrandunderAlibabaGrouptook57.6%,whileJD,itsbiggestcompetitor,took19.3%oftheB2CnetworkretailMarketShare.

Accordingtothegraphabove,B2CmarketshaveinitiallyformedaDuopolyofTmallandJD.

TmallandJDareactuallyprovidinggenuinecommitmenttoelectricservice,theirservicesareactuallynodifferenceintheproducts,onJDcustomerscanbuythesamethingasonTmall.Theyarealternativeproductstoeachother.

EconomistsliketoforecastthefutureBusinessTrendofChina.AsstudentsofBusinessschool,Weherebymakeourassumptionattheendofthisarticle.Inourpointofview,webelievethatE-commercewillbecomeSingleMonopolisticMarketinfuture.

Forexample,dividedbyoperationmode,orcommodityclassification（fastconsumptiongoodsanddurablegoods）etc.Butinthesesubdivisionmarketwillfinallyleaveonlytheexistenceofanoligopoly.

Reasonscanbeelaboratedasbellows:

1.DespitethepropertyofminordifferenceandEasy-DuplicatedModebetweenmajorE-Commercecompanies,weestimatethetrendismovingforward,whosebusinessstructureisirreplaceableinnowadays.

2.TheadvantagesofE-commerceastheforerunnerareobviouswithnodoubt,IncludingBrand,variedSourcesofcustomers,Internet,LoyalClientsandthebarrierthatadditionalcosttobepaidifswitchingservicetootherE-commerce.

3.Consideringtheundifferentiatedservice,TheoperationcostandexpenditurewouldbeminimalaslongasthereisonlyoneE-commerceexistinginthisIndustry.

4.theretailgiantWAL-MART,alsocanbecomeUSAindustryoligopolyinthepresenceofgeographicalrestrictionsofcompetitioninretailsales.Soinnogeographicalrestrictionsortrafficrestrictions,andevenonlineshoppingmarketasymmetricinformationwebelievebusinessindustrywillusherinasingleoligarchtimessoon.