Enjoying the Competitive Advantage

Enjoying the Competitive Advantage

Introduction

A company is said to enjoy a competitive advantage if it can produce goods of equal value as others but at a lower cost of production. Also, the ability to make more sales in times of economic crises is a kind of advantage. The Alibaba group is a member of the online marketing programme that is well developed and represents a large percentage of the e-business. It has a long history which makes it efficient in the study of its evolution. The development in the field has attracted several companies which bring with them stiff competition. To survive in such an environment, companies require robust strategies. Business organizations such as merchandise suppliers and brokers anchor themselves around e-business companies such as the Alibaba group to enjoy benefits of competitive advantage. Alibaba group has positioned itself well to experience a competitive advantage as well as maintaining its innovation by balancing the external environment, entrepreneurial climate, behavior and customer focus.

Discussion

Competitive advantage and value creation begin with a well-integrated innovation and entrepreneurship strategy. Top management relies on innovation strategy to set down goals based on the opportunities in the market due to competitive advantage. The organization of Alibaba is based on international business covering more than two hundred and forty regions in China, Japan, Korea, the United Kingdom and the United States. The company beats the competition by providing efficient business-to-business online support to both small and medium-sized enterprises. The advantage can be seen by the way the group quickly grew to incorporate great subsidiaries like the Taobao, Alipay, Alibaba cloud computing and China Yahoo, (Lihua H., Ganglan H., Xianghua Lu, 2011). The appreciation of competitive advantage begins when the external climate is well taken care of.

The external climate of any organization plays a critical role in the realization of competitive advantage opportunity. The ability to create opportunity is affected by the way in which a company can treat its external environment. During a business recession, for example, the survival of a company will depend on its ability to beat the intense competition. The Alibaba group has mainly invested in developing its Information Technology in combination with the available resources to meet or overcome the competitors’ levels. Alibaba has done this development over a period which has allowed it to become familiar with the possible market challenges, (Barney T., Shan L., Pan X., LuLihua H., 2009). Familiarity with challenges has made it a little easier in transacting business. During its initial stages of development, Alibaba was motivated in taking advantage over the online trading gap created by slow internet penetration at the time. The ability of the company to enable small and medium-sized enterprises to publish their information easily on the website worked quite well in making the company to stand out among competitors.

Successful integration of innovation requires an entrepreneurship climate that supports the vision of the top management. The climate should support the entrepreneurship activities as well as promoting their implementation by upholding the core competencies of the organization. A particular example of such climate is one created by E-bay online business enterprise that posed very stiff competition on Alibaba. The competition strengthened Alibaba’s marketing strategy and then left a free marketing area when e-bay later left the market. Alibaba got to enjoy a tremendous competitive advantage since without its main competitor it was an easy task to work towards its development. The ability to take maximum advantage from the failures of the competitor shows how important entrepreneurial climate is to a business.

Entrepreneurship behavior and customer focus are a critical path in the process of integrating innovation for any organization. The success of Alibaba can only be said to be motivated by its entrepreneurial behavior and customer focus which acts to build trust. Alibaba only provides a platform where buyers and sellers post their information without engaging in direct transactions. Deals agreed through the Alibaba platform are transacted offline or via emails leaving Alibaba to earn only from advertisement fees. Also, online trading is a field that suffers burdensome regulation since it is faced with a higher risk of fraud and the fact that Alibaba has risen against the odds is an accurate reflection of its entrepreneurship character and good customer relationship, (Qin H., Xun W. and Clement K., 2011). Entrepreneurship behavior and customer focus shows the level of understanding customer needs by Alibaba.

Maintaining long-term competitive advantage requires that an organization has well understood the needs of its customers and made the necessary innovations to support the same. Alibaba has readily accepted the culture of customers in bargaining and has provided a platform that allows transparent seller-buyer interaction. It can be said that Alibaba has mastered the art of comparative advantage which is the ability to offer similar services more efficiently than the competitors. The competitors in the market like e-bay have been reluctant in accepting the customers’ culture a weakness that has given Alibaba an upper hand.

Conclusion

The management of Alibaba has made it enjoy the benefits of competitive advantage. The company’s integration of innovation and entrepreneurship has taken care of external climate, entrepreneurship climate, behavior and customers focus. Customer needs have been well understood, and the necessary innovations made to cater for any needs that may arise with time.