...TAOBAO VS. EBAY CHINA In this essay I am going to analyze the competition about the dominant position in China's online market between the domestic player Taobao and the global Internet C2C service leader eBay. Therefore we focus on the following questions: 1.) Why did eBay succeed in the US but fail in China? What could have eBay done to avoid the defeat? 2.) Do you think Ebay should continue developing its business in China and competing against Taobao? If yes, how? If no, why? 3.) What sustainable revenue models can you suggest for the C2C business of Taobao? (1) EBay US had the big advantage of being the first mover. At the early stage of the market ebay didn’t face a market with great competition. The company was in a market and culture that they knew and also their customers were ready for the transaction service, because of the wide internet penetration and highly developed technological and financial infrastructure. Furthermore the norms and laws were well developed. If we look at the various competitions between Taboa and Ebay, Taobao took over eBay's market share gradually successfully1 based on market as on strategic reasons. The main reason according to the case study were: • Based on research of the C2C market in China, the user (seller) of the website are price sensitive. Since Taobao launched no-free model, eBay lost their customers. (2003-2007) • Low Internet penetration rate as low C2C Transaction Volume2 – for eBay it is advantageous to have high traffic...
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...Management Information Systems Homework: Alibaba’s Taobao Angela Mae Jean Sy 12210690780 November 17, 2012 1. What was Alibaba’s motivation for diversifying into the consumer business with the launch of Taobao? Does this make sense? Jack Ma was alarmed at eBay’s entry into the online selling market, fearing that it would soon encroach on Alibaba’s existing B2B success. Ma knew that once eBay had a firm hold on their individual consumers and sellers, it would be easy for them to transition into a bigger, SME-targeted type of e-commerce. Given eBay’s worldwide dominance, Ma’s fears were not completely unfounded. It was this that motivated Ma to do something to stop eBay in its tracks. Ma’s reaction to eBay’s arrival, however, was not just to find a way to ensure their position as the leading B2B online goods provider. Before eBay could even begin to consider moving horizontally to B2B to facedown the Chinese giant, Alibaba became proactive and decided to expand into C2C, and thus Taobao was born. 2. How did Taobao beat eBay? Taobao was clearly ahead of eBay in many aspects. And while one may argue that eBay had exhibited participation in these aspects as well, they clearly did not do it as well as Taobao did. a. Familiarity with Chinese aesthetics and preference Alibaba had been founded by a Chinese man, in China, and has ben serving the Chinese market for years. It is only understandable that Taobao had a better concept of what the market wanted. When...
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...International Business E-bay in Asian Markets The international American company eBay has suffered significant financial loses in the Asian markets due to the industrial powerful country of China which has an unmatched presence on the website Asian markets. The solution for eBay’s company is come up with strategic selling plan to overcome and beat down China’s on line selling leading industry, in addition, it would be extremely beneficial for eBay’s company to lower down the purchase fees and create unique shopping features on line to make it more attractive to Asian shoppers. Currently some statistics suggest that Chinese consumers are willing to pay for internet services that they deem worthwhile. For example, Chinese consumers purchased several hundred million dollars worth of virtual currency last year from companies such as Tencent to upgrade online personal games and buy custom ring tones for their for their mobile phones. Chinese youth have shown their willingness to make online purchases and pay for Internet services. According to the China Internet Development Research Center under the Chinese Academy of Social Sciences, e-commerce sales grew 58%, to almost $70 billion, over the last two years, with almost $3 billion of that in consumer-to-consumer sales. E-commerce growth has remained steady, as the number of Internet users in China has grown from 90 million to 130 million since 2004. When eBay entered China, their Paypal payment method did not seamlessly integrate escrow...
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...December 2006, eBay Inc., a US company that offered e-commerce, e-payments and internet communication services globally, announced its plan to form a joint venture with China-based online portal and wireless operator, TOM Online, in which eBay would have 49% ownership.1 The move reflected the increasing difficulties foreign internet companies were facing in their attempts to snatch a share of the Chinese market amid fierce competition and a changing market environment. eBay first set foot in China in 2002 by acquiring 33% interest in EachNet—a domestic online auction company, followed by a full acquisition in 2003.2,3 In 2005, eBay acquired Skype4 to expand into the online communication sector. While Skype was a wholly owned subsidiary of eBay globally, it operated indirectly in China via a joint venture with TOM Online. Due to this existing relationship between the two companies,5 TOM Online seemed to be a natural choice of partner for eBay’s subsequent decision with regards to its online marketplace business. Recognising TOM Online’s local knowledge and political connections, eBay believed that a joint venture would benefit its failing business in China and help the company further develop its Chinese market.6 Some analysts questioned whether political connections alone were the answer and suggested that eBay focus on its product and service offerings.7 Vara, V. and Chao, L. (20 December 2006) “EBay’s China retreat highlights a tough market”, Wall Street Journal. eBay (Date Unknown)...
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...<http://www.alibabagroup.com/en/about/faqs> Amazon.com, Inc, 2015. [Online] Available at: <https://www.amazon.cn/> Daxue Consulting, 2014. The Success of Taobao on the Chinese Internet. [online] Available at: <http://daxueconsulting.com/the-success-of-taobao-on-the-chinese-internet/> Ding, Ran. China New Legal Approaches to E-Commerce: Prosperity and Challenge. 2010 International Conference on E-business, Management and Economics IPEDR vol.3 (2011). IACSIT Press, Hong Kong. Incitez Pte Ltd, ChinaInternetWatch.com, 2015. Taobao Total Sales Reached USD5.7 billion On A Single Day [online] Available at: <http://www.chinainternetwatch.com/4691/taobao-bachelors-day/> Investopedia, 2015. What is Alibaba? [online] Available at: <http://www.investopedia.com/articles/investing/111314/what-alibaba.asp> Li, W., Wu, D. & Xu, H. (2008) ‘Reputation in China’s online auction market: evidence from Taobao.com’, Frontiers of Business Research in China, 14(2): pp. 13-18 Liu, Ying 2006. Theories of International Business. 2nd ed. Beijing: Beijing Institute of Technology Press. Lixia, Y. & Xun, L., 2009. Analysis on the Successful Strategies of Taobao ’ s. , 8, pp.8–11. Market Line, 2014. Alibaba Group Holding. 11/1/2014, p1-10, 10p Ou, C.X.J & Davision, R.M, 2009. Why eBay Lost to TaoBao in China : The Global Advantage. , pp.145–149. Zhao, D. a N., 2012. The...
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...Content: Introduction: Market size and trends of the two markets P2 Comprehensive analysis The ALIBABA and the ebey market pattern P4 The principles involved in the introduction of the new product P10 Characteristics of those consumers who might be adopters P12 Hidden psychological motivations that hindered/contribute to success P14 Role of peer pressure or other elements P16 Conclusion: Recommendation/ Opinion P18 Reference P19 Introduction Market size and trends of the two markets. Alibaba since March 10, 1999 after the establishment soon became China's largest Internet companies and the world's second largest Internet companies, Alibaba is the world's leading small business e-commerce company, Alibaba Group's flagship business. Alibaba market through its three trading around the world to millions of buyers and suppliers engaged in online business.Three online marketplaces: focuses on serving importers and exporters in the international market, domestic trade in China market, and, through an associated company, to promote Japanese exports and the domestic market in Japan.In addition, Alibaba is also on the international market with a global wholesale trading platform for smaller, you need small quantities of goods to buyers fast delivery service.All transactions with the formation of a market more than 240 countries and regions from over 61 million registered users of the online community.In order to be transformed into...
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...study is going to introduce the acquisition of eBay and PayPal, and why eBay decided to acquire PayPal, what happened after the acquisition, and my recommendations about eBay’s acquisition strategy. I will start with the backgrounds of these companies. In PayPal's official website, it described itself as “ the safer, easier way to pay and get paid online. The service allows anyone to pay in any way they prefer, including through credit cards, bank accounts, PayPal Smart Connect or account balances, without sharing financial information." (PayPal, n.d., para 1). It is a person to person (P2P) payment system that people can transfer money easily by using its services; it is very popular in the online shopping area. Another company, eBay, was defined in its official website as an online shopping website in which individuals and companies can buy and sell various goods and services worldwide (eBay, n.d., para 1). Both companies are focusing on the online trade sector; but eBay is similar to an "auction" as well as PayPal is a payment method. Motivation Online P2P payment was a new idea at that time, and as any emerging market, many P2P services such as Flooz, Beenz, and CyberCash were failed (Punch, 2002, para 3). PayPal was one of those P2P payment companies that survived after competition. At that time, PayPal became the leader in P2P payment industry, and it was the most popular payment method in eBay auctions; more than 50% eBay users were using PayPal (LD, 2010, para 2)...
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...they made the strategy according to that point. They developed E-commerce websites which made no difference with Taobao and Tmall but didn’t make them to success. Why does this happen? What’s Tencent’s strategy? Introduction As Tencent announced to take 15% stake of JD.com[1], which is the largest online retailer of China, in March 2014, it also implicated the failure of Tencent’s previous e-commerce strategy. In the meantime, Tencent almost sold all of its own e-commerce business to JD, including Paipai marketplace(C2C) and QQwanggou(B2C), logistic assets and personnel, as well as part interest of 51Buy.com.This combination shows that Tencent has completely given up its own e-commerce business which were created by its own team in 2005. On the one hand, Tencent is the fourth-largest Internet company in the world whose market value has reached about US$ 150 billion in 2014 which means it has sufficient cash stockpile. On the other hand, it’s a giant company which has developed diverse and abundant online business including IM, game, search engine, social network, video and portal. Without shortage of money or resources, it seems a little confused for Tencent’s choice to finally let go its own e-commerce business since it has been investing in e-commerce for nearly 9 years. Besides e-commerce is still one of the most promising markets of Internet in China. So why did Tencent make this choice? What is Tencent’s business strategy on E-commerce? Where does Tencent’s new opportunity...
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...Krishna Burberry: Burberry moved manufacturing work overseas to China (offshoring). This involved the closure of their factory in Rhondda, causing 300 jobs to be lost in Rhondda. Consequently staff were crying when given the news and protests were held, causing the reputation and brand image to worsen in the short-term of Burberry as a result of making such an unethical move. This was a large concern as Burberry provided well-paid, quality employment, so the 300 job cuts in Rhondda meant a sad loss to the development of the economic infrastructure of Rhondda. Also in the short-term Burberry had to suffer larger cash outflows due to the redundancy payments. However the lower labour costs in China, although rising, allowed profits to rise. Also Burberry saw a 19% sales revenue rise, due to the rising customer disposable incomes in China, and as a result profits rose. Therefore in the short-term the move to China was not good as it meant large cash outflows due to the redundancy payments, and the job cuts in the UK made Burberry receive an unethical, negative brand image and reputation, reducing sales and profits. Although in the long-term Burberry is likely to benefit from greater sales and so more profits, particularly due to lower labour costs, but this depends on the rate at which labour costs are rising in China relative to that of the UK, and how high the shipping costs are of the goods from China to the UK. Dyson: Dyson's very innovative bladeless fan was the result...
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...| Q1 | Why has eBay become successful and diverse online market place? a) What is eBay? Who is the founder?b) Success story of this company in diverse online marketplace i. How and why it become successful? ii. How eBay position itself in the E-commerce marketplace? | 9-11 | Q2 | Visit the eBay website (http://www.ebay.com) to help you answer, and check out their many trading categories, specialty sites, international sites, and other features. [You can provide the screen-shot of the web pages to show every of the feature] a) What is trading category? What they have on this in their website? b) What is specialty site? What they have on this in their website? c) What is international site? What they have on this in their website? d) What other features do they have in their website? Analyze each feature in term of its purpose and business values e) Is there Customer Relationship Management technology in their website? | 12-24 | Q3 | Why do you think eBay has become the largest online seller of certain other products, like computers and photographic equipment? a) Based on the eight initiatives/ competitive advantages that you have learned in Chapter 2 | 25-26 | Q4 | Is eBay’s move from pure consumer-to-consumer auction market place to inviting large and small businesses to sell to consumers and other businesses, sometimes at fixed process, a good long-term strategy? a) What is pure consumer-to-consumer auction market place for eBay? b) What...
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...------------------------------------------------- 497 Study Guide Module I: Industry & Competitive Analysis “Porter’s Five Forces”: 1. What is strategy (fundamental question in strategic management) a. How to achieve superior financial performance 2. Why industry Analysis? b. Industry analysis helps a firm understand the underlying economic forces that contribute to or detract from its profitability, and subsequently suggests a means for firm to find an optimal position for itself. i. Industry is a group of firms that produce products or services that meet the same needs of customers in a competitive market. ii. Industry Analysis uses economic principles to understand how profit is distributed among participants in a market (including both direct competitors and other parties such as suppliers) 3. Porters Five Forces – are a checklist of things that can affect value capture and creation c. Rivalry Among Existing firms iii. Few firms : Betrand – fight in price Cournot – fight on quantity Collusion – Firms choose price cooperatively iv. Industry concentration: % of total industry sales accounted by the 4 largest firms d. Threat of New Entrants v. Switching cost, capital requirements, access to distribution, product differentiation vi. Puts a cap on profit potential of an industry e. Power of Buyers vii. Price Sensitivity f. Power of Suppliers ...
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...COMPANY NOTE Initiating Coverage 27 October 2014 CHN | Technology | Internet BUY Price target $118.00 Price $95.76 The Powerful E-Commerce Ecosystem Connecting Half of China; Initiate at Buy Key Takeaway China's changing Internet user demographics and mobile development support our favorable view on e-Commerce for the next decade. Alibaba is the largest Chinese ecommerce player, with 80%+ GMV market share, but is only selling to less than 25% of the population now. We estimate well over half of Chinese population will be shopping on Alibaba’s platforms in 10 years. Initiate with Buy; PT USD118. Changing demographics & mobile support ecommerce in the next decade. As discussed in our sector note, "A Taste of Domestic Consumption: The Unleashing of China's E-Commerce Power" published on Sept 19, 2014, China’s e-Commerce growth for the next decade benefit from: 1) changing Internet user demographics towards 30+ year old age groups; 2) accelerating structural shift to online from traditional retail; 3) Chinese government’s massive support for urbanization and domestic consumption; 4) proliferation of affordable smart devices; 5) improving wireless and transport infrastructures in lower tier and rural markets, and 6) rising consumer demand for better quality, design & fashion, authenticity and timely delivery. Growth driven by mix shift towards Tmall, and improving mobile monetization. We expect Alibaba, as the largest e-Commerce player, to sell to...
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...Table of Contents Executive Summary 3 Research Content 5 United Kingdom 5 Online Retailing Market Overview 5 Online Shopping for Jewellery 7 Profile of General Online Shoppers 8 Site Profile of Top 3 Online Shopping sites 10 1. Amazon UK - www.amazon.co.uk (ranked no. 8 in Alexa in UK) 10 2. Argos - www.argos.co.uk (ranked no. 41 in Alexa in UK) 17 3. Littlewoods - www.littlewoods.com (ranked no. 498 in Alexa in UK) 27 USA 32 Online Retailing Market Overview 32 Online Shopping for Jewellery 33 Profile of General Online Shoppers 33 Site Profile of Top 3 Online Shopping sites 35 1. Amazon US – www.amazon.com (ranked no. 5 in Alexa ) 35 2. WalMart - www.walmart.com (ranked no. 41 in Alexa) 39 3. KOHLS - http://www.kohls.com/ (ranked no. 207 in Alexa in UK) 44 Germany 48 Online Retailing Market Overview 48 Online Shopping for Jewellery 50 Profile of General Online Shoppers 50 Site Profile of Top 3 Online Shopping sites 52 1. Amazon Germany – www.amazon.de (ranked no. 6 in Alexa) 52 2. Otto Germany - www.otto.de (ranked no. 79 in Alexa) 53 3. Idealo - http://www.idealo.de/ (ranked no. 37 in Alexa) 54 France 56 Online Retailing Market Overview 56 Online Shopping for Jewellery 56 Profile of General Online Shoppers 56 Site Profile of Top 3 Online Shopping sites 56 Netherlands 59 Online Retailing Market Overview 59 Online Shopping for Jewellery 59 Profile...
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...S T R A T E G Y – II S T R A T E G Y – II S T R A T E G Y – II S T R A T E G Y – II S T R A T E G Y – II www.ibscdc.org 1 Transformation Corporate Transformation Korean Air: Chairman/CEO Yang-Ho Cho’s Radical Transformation A series of fatal accidents, coupled with operational inefficiencies snowballed Korean Air into troubled times. Then, at the beginning of the 21st century, its CEO/ Chairman, Yang-Ho Cho undertook various transformation initiatives - for instance, improving service quality and safety standards, technology integration, upgrading pilot training, better business focus; putting in place a professional management team, improving corporate image through sponsorship marketing, etc. He gave a new corporate direction in the form of '10,10,10' goal. However, Korean Air is held up by a slew of challenges. Among which are inefficiencies of - Chaebol system of management, possible clash of its cargo business with its own shipping company, limited focus on the domestic market and growing competition from LCCs. How would Korean Air manage growth as a family-owned conglomerate? The case offers enriching scope for analysing a family business’s turnaround strategies, with all the legacy costs involved. Pedagogical Objectives • To discuss the (operational) dynamics of Korean Chaebols - their influence/ effects on the country’s industrial sector and the economy as a whole • To analyse how family-owned businesses manage the transition phase - from a supplier-driven...
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...Service Sector The service sector covers a wide range of activities from the most sophisticated information technology (IT) to simple service provided by the unorganized sector , such as the services of the barber and plumber . National accounts classification of the services sector incorporate trade, hostels and restaurants; transport, storage and communication; financing, insurance, real estate, and business services; and community, social and personal services. The service sector consists of the "soft" parts of the economy, i.e. activities where people offer their knowledge and time to improve productivity, performance, potential, and sustainability, what is termed affective labor. The basic characteristic of this sector is the production of services instead of end products. Services (also known as "intangible goods") incl7ude attention, advice, access, experience, and discussion. The service industry forms a backbone of social and economic development of a region. It is one of the major sectors in the non-good producing industries under private ownership. Approximately 55%of the economic activity of us occurs in service industries comprising of different divisions as classified by North American industry classifications system (NAICS). In World Trade Organization (WTO) and Reserve Bank of India (RBI) classifications, construction is also included. Service sector is the lifeline for the social economic growth of a country. In the day of largest and fastest growing sector...
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