Managing Innovation and Entrepreneurship

   Managing Innovation and Entrepreneurship

        The Alibaba Group

Introduction

Innovative skill in entrepreneurship business is an all-time demanding tool for the success of any business. Such skills are often risk-seeking since they seek to turn any possible obstacle into competitive advantages in what is known as design thinking. The prominent global companies always employ the ideas behind the design thinking to enable their businesses to thrive to the desired competitive levels. Design thinking is; thus, the rationale companies follow to promote higher performance collaboration by inventing in various business innovations. Design thinking involves discovering the underlying business opportunities, and creating solutions to entrepreneurial problems. Design thinking entails five key elements, which every entrepreneur is looking forward to implementing for the success of the business. The key features include; defining the problem, developing the alternatives, determining the course of action, selecting the best option to provide a solution, and then executing the chosen alternative. Alibaba group is among the companies, which employ the design thinking approaches to arrive at various innovative ideas. The Alibaba group is interested in strategic business growth, and innovations by applying the five critical elements of design thinking.

The Alibaba Group

Defining the problem

The Alibaba group has become one of the smartest online business hubs among the other global players due to their perpetual innovative techniques. When Jack Ma founded the company in 1999, the central strategic plan was to build strong customer relationships (Burns, 2016). One major challenge online businesses such as the Alibaba face is data security. The group identified some key innovative hiccups related to online data (Burns, 2016). The main problem was emanating from the cybercriminals who would taint the company negatively considering the innovative competitiveness of the business. Competitors such as Amazon would then take advantage, and invest in the design thinking approach to overtake Alibaba. The company wanted to have a real tech-enabled data system, which is coordinated in an online network to leverage the data in real-time efficiently (Peng et al, 2016). Another problem was that the Chinese banks at the time of the Alibaba group launch used to give million dollar typical loans. The minimum amount of such loans would be about 6 million dollars, which were above the scopes of the small, and medium-sized enterprises (SMEs).

Developing options

The Alibaba group thought of having machine learning innovations, which would transform the human decisions into a series of algorithmic outputs for effective data management. Another opportunity to secure the online data at the company was to come up with the probabilistic prediction models using iteration methods (Burns, 2016). The prediction models became the basis for most business decisions. Innovative techniques for effective business growth, and entrepreneurship entail trying unique ideas. The option for the large amounts of loans offered by the large Chinese banks was the invention of the Ant Microloans. The group also sought rights to create a highly scalable, functioning, and profitable SME lending business.

Course of action

At Alibaba, there was the need to develop an integrative data system, which would work with the Ant Microloans system. The system would ensure there is the creation of a high functioning Ant Financial Services, which was merged with Alipay. Alipay is a successful payment business within the Alibaba group (Peng et al, 2016). The Ant Microloans was an innovation, which would use data to compare borrowers who repay on time with those who do not. The Alibaba group sat to decide on the best method through, which the company would engage a million subscribers worldwide with utmost data protection algorithms in play. Several of the proposals mentioned earlier were tested. It was found that as of 2010, when the pioneering data-driven micro plan business was launched, the company lent more than $13.4 billion to about two million SMEs. The amounts culminated to the average loan size of $1,200 (Peng et al, 2016).

Select the best solution

The decision to replace human decision-making skills with algorithmic output was reportedly the best for the company.

Execute 

The algorithmic output was executed, it automated all operation decisions using four steps. First, the design would “datafy” every customer exchange since it would access plenty of data on the potential customers (borrowers). The second step was to put every activity of the algorithms under software control (Peng et al, 2016). The third step would have the data flowing in all application program interfaces. Once the business experienced deluge of data, it applied the algorithms for optimality purposes.

The Success of Alibaba in Design Thinking

Alibaba group is among the companies, have successfully applied the concepts of design thinking in manning its innovative techniques. The outline rationale for design thinking has anchored the company to the best global competitive position. The strategists of the Alibaba group recognized the need for a robust data management system, which called for the employment of qualified data scientists. The data mining techniques using engineered algorithms created a robust platform for machine language operation (Peng et al, 2016). The platform also created chains of artificial intelligence, connected “internet” vehicles, and e-commerce option, which used a B2B approach. The indulgence of the company on data science, and mining techniques has made the group to offer customers seamless evolving digital services, and new innovative technologies across various channels on the online platform.

Required Improvements

Sometimes customers purchase items from vendors on the Alibaba portal, but in a nutshell. The online portal purchase method needs some improvement (Burns, 2016). First, there is a need for the company to have a team of superior online attendants who would address the needs of the customers. Not on one occasion the online purchases have failed. The portal usually cites security reasons. Suppose the buyer delivers the funds to the vendor after which, the transaction is not completed, there can be great frustrations. The available superiors do communicate but not in real time. A company like Alibaba needs service recovery mechanisms to resolve customer service failures.

Conclusion and Recommendations

The rapid growth of the Chinese e-commerce market propelled the growth of Alibaba Company. Alibaba is in the leading position in the market will skyrocket the company’s revenue. There is a need for Alibaba to develop more focus on the international market. The company should have joint venture business in countries with high populations, and highly innovative such as Russia, and the US. In 2018, the company formed a $2 billion joint venture in Russia called AliExpress Russia. Through this joint venture, the company will access more million users, and this will aid its global expansion strategies. Based on the design thinking skills, the management of the company should show commitment to finding the information from the foreign markets rather than indulging much on the domestic market analysis. By analyzing the foreign market, the company will identify the key areas it needs to improve on before expanding the business to the international levels. The company should balance the interest of the users towards all products. Concerning this, the data scientists should use vector search method based on the inner product models.

References

Burns, P. (2016). Entrepreneurship and small business. Palgrave Macmillan Limited.

Peng, X., Cai, L., Lu, S., Cai, Y., & Gao, Y. (2016). Antecedent and dimension of symbiotic       relationship in the hub-based entrepreneurial ecosystem: case study of Alibaba. Journal of      Industrial Integration and Management, 1(04), 1650011.