Monthly Archives: November 2013

Alibaba 11.11 Shopping Festival Breaks Record

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Alibaba Group Holding Ltd., China’s largest e-commerce company, had 35.19 billion yuan ($5.78 billion) in transactions on 11.11 one-day Shopping Festival. E-commerce firms took advantage of November 11, China’s Singles’ Day to promote and offer huge discounts to stimulate online shopping demand.

It solidly presented there are tremendous opportunities in Chinese market where the amount of mobile online users and their purchasing power are both rocketing. This signal is a vote of confidence to all Chinese e-commerce companies and investors.
I suggest, not only Alibaba, but all the e-commerce companies to improve customer service along with the goal of boosting sales revenues. Many customers asked for refund after waking from irrationality, thrill, and vertigo of robbing-like shopping, and found the quality disappointing. Thus I recommend online stores to provide more instant online shopping guidance and after-sale services.
However, while people were satisfied by discounts they’ve got, and shareholders of Alibaba were ecstatic at the crazy stampede and customers’ mania, we should not forget brick-and-mortar retail stores. Karen Leung’s Blog Post evaluate e-commerce’s advantage. The magnificent financial impact e-commerce exerted to our traditional retail industry will cause huge social problems like unemployment and unrest.

 

 

http://www.bloomberg.com/news/2013-11-11/alibaba-breaks-sales-record-on-china-singles-day-amid-discounts.html

image via Alibaba official weibo post

Sales Revenue on timeline

 

SHOKAY- China’s pioneering Social Enterprise

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Image via china30s

SHOKAY is a successful Chinese producer of well-designed and high quality knit from yak fiber sourced directly form Tibetan herders. The products exude an extraordinarily natural  aesthetic and feature rewarding customer experience.

SHOKAY creates job opportunity for poor and marginalized people, offers persistent and stable income for local herders, and protects their traditional lifestyle. They entrusted local animal husbandry to train herders collecting the best yak fiber; they also formed a weaving and knitting group in Shanghai.

I appreciate SHOKAY for it pioneers in applying business mode to solve social problems and help people in need; while in China, the concept “sustainable fashion” is nearly a blank page. Their value proportion is to combine fashion and social responsibility into a sustainable business type.
However, I still feel uncertain about its future. As time passes by, “social enterprise” will penetrate and root in Chinese people’s perception, so more competitors will enter the industry and share the market of yak-fiber-made products. SHOKAY can hardly undergo economics of scale, because it is a vertical integration from collection of raw resources to design to weave and finally to retailing.  Maintaining efficient production chain requires highly efficient management.

Right or Wrong? – Snapchat’s choice

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image from Snapchat logo

I’ve preliminary analyzed Snapchat in my last post, read COMM101 Section103 Joseph Lee’s Blog, and I am going to delve deeper to the consequence and impact of Mr. Spiegel’s refusal to Facebook’s acquisition request.

From the positive side, it maintains its competitive strength among high-tech mobile social app industries. The fact that Snapchat as a startup created itself around $4bn value within two years, is solid enough to argue that it has competitive advantage and room for appreciation due to its point of difference: unique messaging mode. He is trying to break the law that high-tech startups cannot escape from the destiny of eventually being taken over by technology giants. Many cases in history proved that the operation of parent companies is not capable of improving the performance of companies after acquisition. Before acquisition, workers fear being laid-off, so they don’t have motivation to work; after that, the steep organizational structure of big company has problems such as low efficiency in communication and time lag of operation.

However, being taken-over eliminates risks. Snapchat gambles on fickle teenagers, while audience of Facebook, LinkedIn, Pinterest are from multiple generations and occupations. Buyout makes the bet more secured.

 

Ambitious Snapchat

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- image from yahoo news http://news.yahoo.com/snapchat-ceo-evan-spiegel-talks-sexts-growth-163254848--finance.htmlimage via yahoo news

 

Evan Spiegel, the young co-founder and CEO of Snapchat declined the acquisition of $3bn from Facebook.1 His decision is so shocking and puzzling that we may wonder where did his confidence come from. I’ll briefly analyze Snapchat with SWOT.

Strength:

  • Snapchat features the unique characteristic- messages delete themselves after maximum 10 seconds so it highly protects users’ privacy.

Opportunity:

  • Snapchat, a new mobile messaging app, never stops explosive growth since it was launched two years ago. It’s getting more popular especially with teenagers, while it was reported that the daily use of Facebook by U.S. teenagers decreased due to the emergence of more alternative social apps.

Weaknesses:

  • There is no way to save messages that are important.
  • Teen users are extremely fickle.

Threats:

  • It is the uniqueness that encourages irresponsibility of contents of messages people send to others. For example, my friends once received annoying “sexting”, and they believe that it really causes negative social impact.
  • The rigorous competition in social media can’t guarantee any company the top position forever. There is a stack of mishaps in history. For example, Digg rebut the offer of $200m and end up selling for $500,000.2

 

1 http://blogs.wsj.com/digits/2013/11/13/why-would-snapchat-turn-down-a-3-billion-cash-buyout/?KEYWORDS=snapchat

2 http://online.wsj.com/news/articles/SB10001424052702304373804577523181002565776

 

 

Petal Diagram – a better Competitive Analysis Diagram?

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X/Y two-dimension competitive analysis is more suitable to be used by an existing company which has launched products into the market, rather than by an early-stage startup which has actual and solid data showing how its company’s future performance and competitive advantages will be like.

image via Steve Blank’s blog

However, in this case, Petal Diagram will be a better choice to present the market competition. Each of the 9 sections of  Business Model Canvas (customer segments, key partners, etc) can be demonstrated in the form of a flower and contents more detailed and specific.
Additionally, Petal Diagram is more visualized in telling the VCs the amount of capital founded, by quantifying the petals, in other words, scaling the size of petals. It directly shows how hot, how promising the company is.
The most distinct point is that it allows ambiguous area among each segments (petals) which is a common situation where startup wants to enter multiple markets or a new market still not exiting. X/Y axis analysis limits competition within only one market, while as times and technology develop, the frequent emergence of integral inter-market products informs that X/Y axis competitive analysis should be updated.
Reference:

BlackBerry’s New CEO

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Former Sybase AG CEO John Chen started to steer BlackBerry.

image via telsetnews

 

From John Chen’s previous experience of saving loss-making Sybase back on an even keel and finally becoming the top one mobile database technology company, it’s clear that his management is carried out around his vision of value proposition.

1) Employees’ affective commitment and confidence have negatively correlation to turnover intention, which greatly impact working performance. Now the lack of confidence of people working for BlackBerry is the first problem in dire need to be solved. In this case, the interim CEO himself is an infusion of new vitality, as he will new entrepreneurial and organizational cultural and new executives to board later on.

2) No actions should be taken if the company is not competent. That focusing on competencies and avoiding overwhelming and unnecessary competitions in areas where the company doesn’t have a stable place, can technically save huge resources for doing research and upgrade techniques and products what the company is strongest at.

With expertise in both IT and accounting management, letting alone his previous remarkable achievement in saving Sybase, John is competent for this CEO position. It will be an era fascinating to watch.

http://www.forbes.com/sites/parmyolson/2013/11/05/new-ceo-blackberrys-turnaround-could-take-a-year-and-a-half/