Rotman Management

What It Takes to be a Smart Business

Why is it important for every Western businessperson to be familiar with Alibaba's business model?

Alibaba’s business model provides key insights into the future of strategy. The sources of competitive advantage have shifted dramatically, and companies need a new strategic approach that fits into an era where networks and data dominate. For us, strategy is no longer about analysis and planning; it is a process of real-time experimentation and customer engagement. Going forward, a big challenge for leaders will be to delegate more and more work to machines — especially in routine operational decisions — so that people are freed up to become more creative and innovative.

Is Alibaba China’s version of Amazon?

Definitely not. Alibaba first grabbed global attention with the biggest-ever initial public offering on September 19, 2014, and today, it has a market cap that is on par with Amazon; but that is where the similarities end. Alibaba has a unique business model. We are not a retailer in the traditional sense. We don’t source or keep any stock and logistics services are carried, , , , , and a good portion of Wholesalers and Manufacturers do, combined — with some elements of the financial sector thrown in.

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