As the largest e-commerce company of China, Alibaba’s unique business model cannot be copied. Its success is established on both opportunity and predictable strategy. For now, Alibaba can be called a conglomerate. It has set foot in C2C, B2C, B2B, group buying, online payment, logistics, online advertisement and cloud.

What makes the figures more interesting, is that the company was not even the first comer of e-commerce in China. EBay entered China first through a joint venture, EachNet. However, it failed to enter the Chinese market due to lack of the knowledge of China.

Mr.Ma realized the increasing price of rent due to the upgrading cost, which will inevitable lead to the rise of e-commerce. He targeted at C2C segment by the trend of China. Taobao was launched as a fee free business for small and medium-sized Chinese sellers. The action is meaningful because FREE IS THE MOST EXPENSIVE. In other word, Mr.Ma used “Free” to open the market. Totally free service gave Taobao the largest advantage over its major rival at that time, eBay. As such, buyers and sellers had no good reason to accept the fee structure of EachNet.  Although by the end of 2005, EachNet had eliminated fees, it already had been reduced to a trivial player. That’s how Alibaba opened the market under the pressure of eBay.

Another strategy is Virtualization. For E-commerce, logistics is pretty important. Many company prefer to choose self-logistic to earning profit, but Mr.Ma outsource it to existing big logistic company, he gave the sellers power to choose which delivery company they want. Let’s do a simple calculation, if he choose to build a logistic department, he has to pay for the salary of Hundreds of thousands workers. It will be a heavy burden of the company. So why don’t use the strategic of virtualization and outsource the logistics to the existence logistic company? It’s a clever strategic vision for the sustainable development, cash flow is always the most important thing for a company.

Lastly, communication between parties was crucial for shopping online. Buyers may not have been so familiar with the product, they may have wanted to bargain, a common habit in China. All these called for a communication channel. But the business model of EachNet prohibited such direct communication between parties. Taobao adopted a free mode, and hence did not have to face the same dilemma. Its communication tool, AliWangWang, became correspondingly very popular.

Overall, the rise of Alibaba can be attributed to its local knowledge, which is not an accidental of the heat in e-commerce, but a result of a series of thoughtful strategic decision. It understands the local buyers and sellers better than western competitors. Until now, Taobao dominated the market. eBay, Amazon all  have an eye on Chinese e-commerce, but none of them have achieved noticeable market size.

Word Count: 465

Work Cited:

Graphics, WSJ.com News. “What Is Alibaba?” – WSJ.com. N.p., n.d. Web. 02 Oct. 2016.

As the leader in the U.S. diesel market, Volkswagen promised efficiency and safe emissions with on compromise in axle-twisting torque. However, in 2015 Sep, VK was accused of cheating emissions tests. In order to be competitive among the diesel auto manufacturers , 11 million cars worldwide of VW are fitted with the defeat device and pretends to be green environmental. One month ago, VW admitted to cheating again after the scandal broke.

Unsuspecting owners of VW diesel cars in the U.S were all subjecting themselves and others on the road to extraordinarily high levels of the emissions that cause smog (40 times the standard rates of nitrogen oxides), which causes asthma among children and older people (it’s even can be fatal).

Most of the commercial activities in enterprises basically can find the clues from the perspectives of the economic interests. So that VW’s action is easy to be explained. For saving the prime costs such like the time and the cost in tech department, across the ethical line seems like a shortcut to pass the emissions test. In another words, VW stole the expenditures of improving the environment from everyone to filled their own wallet. They are too clever to be wise, so they only can find the loophole of the standard but cannot realize what is the key of sustainability. The action of unethical can only lead to an opposite result comparing to VW thought before. The way of thinking which uses the pursuit of profit as the only objective is behind the new era and destines to be eliminated.

Business ethic is important to act like a moral judgement about what is right and what is wrong for company. Not only individual person has the social responsibility, but the business also has the social responsibility which is to use the resources to create their profit without deception and obeying the rules. Ignoring the standard of ethic, obeying the rule of law, and doing unfair competition not only damage the interest of other operators and consumers, but also lost the trust of the public. In this case, none of the operators who use the unethical way can achieve success.

Overall, business ethics is the cornerstone of the survival of enterprises, with it, companies can embrace the profits and the soul at the same time.

(Word count:385)

Source:

http://www.bbc.com/news/business-34324772

http://www.nationalobserver.com/2016/08/19/news/motorists-decry-canadas-powerless-response-volkswagen-scandal-us-nears-settlemen

The Social Responsibility of Business is to Increase its Profits by Milton Friedman

It’s interesting for us to use this way to communicate with each other and post the feeling.

Hope I can have fun in this courses with everyone I’m gonna meet in the future:)