Analysis of the Competitive Power of Alibaba’s Supply Chain and Logistic Strategy

Analysis of the Competitive Power of Alibaba’s Supply Chain and Logistic Strategy

Submitted by:

Ying Liu

Coyote No. 005183200

SCM 607: Managing the Supply Chain

Instructor: Dr. Kamy Farahbod

Spring 2016 CSUSB MBA Program

Cal State University San Bernardino

Abstract

With the rapid development of information technology in the world, E-commerce, which is based on network, explodes in the market and the revenue of B2B, B2C, C2C, and other service platforms grows gradually. However, for the lack of professional, systematic and national logistic distribution enterprises as well as efficient and the complete delivery management system, logistics industry is congenitally deficient. The sector of logistics has become a key constraint for the development speed and quality of China’s E-commerce market.

As a famously listed E-commerce company, Alibaba has invested in E-commerce for several years, during which its management has realized that supply chain is a critical sector in the eco-system of E-commerce. In order to maintain its leading position in the market competition, Alibaba declared in high profile its logistic investment strategy on Jan. 19, 2011, i.e. to invest RMB one hundred billion Yuan to found a modern logistic system to match its E-commerce service and to promote the construction of the socialized logistics platform. The logistic platform of the group is centered on information system and storage platform, herein, the information system is based on the powerful promotion of the logistics platform, and the storage sector is conducted by selecting central places in the seven regions of North China, Northeast, South China, Central China, East China, Southwest and Northwest to have a storage facility investment. The research on Alibaba’s core logistics strategy and corresponding implementation has significant theoretical and practical value for the development of E-commerce industry in China.

In this paper, the author analyzes and summarizes the current situation of Alibaba in the field of logistics strategy in connection with the practical condition of Alibaba group. Then the SWOT method is adopted to analyze them and to conclude its competitive development strategy in the end.

Keywords: Alibaba, supply chain, logistics strategy, SWOT Analysis  

1. Introduction

China has already been known that has the largest online population, which also stimulates the online shopping. China is already the world’s biggest e-commerce market and it extended its lead in 2015. Chinese retail websites sold 3.877 trillion yuan ($589.61 billion) worth of goods in 2015, an increase of 33.3% from a year earlier, according to data released. China has passed the US to become the largest e-commerce market in the world.