Day: November 9, 2014

Back in September, one of the most anticipated events was the release of Alibaba’s long awaited IPO; prior to its release, critics, skeptics, and analysts pored over the details and various possibilities of how the security would behave once the company became public. To date, the company’s decision to go public has proven every bit as successful as promised.

This success is not unfounded. One of the ways in which analysts value securities is by their corporate structure in relation to company comparables, and according to Stephanie, Alibaba has set itself apart in operations. She discusses how Alibaba’s unique philosophy of not holding inventory, by acting as the medium connecting supplier with consumer, has streamlined processes, allowing it to lower costs of production and mitigate depreciation and inefficiencies.

However, operations isn’t the only area where Alibaba separates itself. Their business model is one where customers are prioritized above employees and shareholders. I find it fascinating that despite being a company of enormous scale, Alibaba’s business model continues to be a point of difference, rather than a point of parity in the online retailing industry. I predict that, with regards to Alibaba’s quick rise to prominence, that the company is quietly setting the industry trend in terms of operational and inventory management.

Alibaba just recently passed a comparable, Walmart, in terms of size of market capitalization. They also use two completely different business models. I guess we know which one’s working better.

Image source (1) and source (2)

It emerged twenty years ago, experienced mass consumerization ten years ago, and today, is one of the hallmarks of the internet’s information-sharing capabilities. What was initially seen as a clever way to transfer information has now become the consumer’s preferred method for accessing live entertainment. In the digital realm, video and music streaming have taken the reins in their respective industries, usurping their traditional counterparts of movie theatres and hard copy music.

After reading the blogs of Jason and Sharon, both of whom delved into the topic of music streaming, I must conclude that there seems to be one overwhelming consensus; even with the huge market potential that online streaming presents, the market’s grossly diverse consumer base makes it difficult for any firm’s value proposition to encompass a sizeable portion of said market. Thus, as Shannon mentions, the possibility of a defined leader emerging within the industry is slight.

However, as Adele’s manager states in Billboard magazine’s article, “streaming is the future,” with internet streaming expected to become ubiquitous in five or so years. If music streaming does indeed become widely adopted by the majorty of internet users, then I think that a firm may be able to grab a sizeable portion of the market purely because of the sheer volume of consumers the internet represents.

Whether that happens or not remains to be seen, but for now, the battle for a grasp on the music streaming industry continues.

Image source (1) and source (2)