Alibaba - Assignment Example

Business Model

Various types of business models can be formed while pursuing an e-commerce business. The four main types of business models include:

• Business to Consumer (B2C)
• Business to Business (B2B)
• Consumer to Business (C2B)
• Consumer to Consumer (C2C)

After a specific type of business model is selected, then the firm must consider other important factors, which are essential for a good business model. A good business model needs to consider several factors, some of which include:

• Competitive Strategy

A good business model must have an incomparable competitive strategy. It needs to distinguish itself from its competitors by selecting an appropriate strategy such as cost differentiation, niche strategy, or differentiation strategy. Alibaba.com implements a click-only strategy since it does not have any physical stores. It provides complete contact information through which buyers and sellers interact with each other. 

• Market Segment

Different market segments have different needs. A good business model identifies its relevant target market in order to serve the needs of homogenous people. Alibaba.com possesses a number of customers belonging to the middle class and upper-middle class. It deals in consumers' electronic products, which are ordered online by its customers.   

• Value Proposition

It outlines the value of a product from the perspective of its customers. Due to the reliability and quality of the products of Alibaba.com, the site retains a number of loyal customers.  

• Revenue Streams and Margins

It defines the way in which the company generates revenues. It can be measured in terms of sales, support, subscription, etc. The primary source through which Alibaba.com generates revenue is through online trading. It is a B2C website and therefore sells directly to its customers.

Web Capabilities to Stay Competitive

For an e-commerce site, being competitive is very essential. E-commerce can easily stay competitive by considering the following important factors.

1. Customer Experience;

The ecommerce market has already reached its saturation point. An e-commerce site needs to provide its customers with exquisite and exceptional services so they remain loyal to the site. In e-commerce, there is a huge concern about trust so when a customer performs a transaction with a site then on the basis of its customer service, he decides whether to make repeat transactions in the future or not. Alibaba.com provides exceptional services to its customers, both in terms of quality and price. This is the reason that it possesses a number of loyal customers.

1. Investing in New Digital Channels

The more an e-commerce site invests in digital channels, the more it gets close to its target market. Alibaba.com is a multichannel website and therefore possesses a good reputation in the eyes of its customers.  

• Making the shoppers feel safe

By providing options such as free sign-up, no registration processes, facility for tracking orders, Alibaba.com ensures that customers feel safe throughout the process of making purchases from the company. It ensures that the best quality services are provided exactly at the specified time. Moreover, it does not impose any hidden charges upon customers’ orders, which enhances customers’ trust in the company.  

Attracting and Retaining Customers

• Providing Complete Information on Products

Alibaba.com ensures that all the potential and latent demands of customers are satisfied just by navigating the website. The first thing that a company can do is to provide complete information about the availability, pricing, colors, designs, product specifications, and features. All these factors are considered by Alibaba.com, which helps the company in retaining loyal customers. Alibaba.com neatly distinguishes different product segments and provides a snapshot of the products’ information right below the image, by which customers can take a glimpse in split seconds.   

• Design and Colors of the Site

The site has been designed in a very simple way, which facilitates the customers in navigating it in a more convenient manner. There are no unnecessary animations, designs, or motives, which confuse the visitors.       

• High Definition products

High-definition images of the products are displayed along with a complete snapshot of product details. These impressive visual contents enhance the overall shopping and visiting experience of customers. People can easily zoom the image and can see it from every angle. Above all, the company provides exactly the same product, which is displayed in images. Most e-commerce websites receive complaints that images of some products do not match the actual ones. Therefore, in order to avoid such complaints, Alibaba.com provides the best quality products exactly as they are shown in images on the site.