Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur
Likened in his native China to a rock star of entrepreneurship, Ma had risen from humble beginnings to the pinnacle of modern Chinese business in less than 20 years. How did a former English teacher who had not even been exposed to the internet until the end of the 1990s become iconic among internet multimillionaires? Was there something special about Ma that helped him stand out among an increasingly well educated class of Chinese entrepreneurs?
Swot Analysis of "Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur" written by Ali Farhoomand, Ricky Lai includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ma Chinese facing as an external strategic factors. Some of the topics covered in Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur case study are - Strategic Management Strategies, Internet, Leadership, Supply chain and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur casestudy better are - – wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic ,
increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ma Chinese, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ma Chinese operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur can be done for the following purposes –
1. Strategic planning using facts provided in Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur case study
2. Improving business portfolio management of Ma Chinese
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ma Chinese
Strengths Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ma Chinese in Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur Harvard Business Review case study are -
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Ma Chinese digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ma Chinese has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Organizational Resilience of Ma Chinese
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ma Chinese does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Ma Chinese has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ma Chinese has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Training and development
– Ma Chinese has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Diverse revenue streams
– Ma Chinese is present in almost all the verticals within the industry. This has provided firm in Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Ability to lead change in Innovation & Entrepreneurship field
– Ma Chinese is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Ma Chinese in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Ma Chinese are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Operational resilience
– The operational resilience strategy in the Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Learning organization
- Ma Chinese is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Ma Chinese is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Ma Chinese in the sector have low bargaining power. Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ma Chinese to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Ma Chinese is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Ma Chinese has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ma Chinese to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur are -
Capital Spending Reduction
– Even during the low interest decade, Ma Chinese has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Low market penetration in new markets
– Outside its home market of Ma Chinese, firm in the HBR case study Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur can leverage the sales team experience to cultivate customer relationships as Ma Chinese is planning to shift buying processes online.
Need for greater diversity
– Ma Chinese has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Ma Chinese supply chain. Even after few cautionary changes mentioned in the HBR case study - Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ma Chinese vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur, is just above the industry average. Ma Chinese needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Slow to strategic competitive environment developments
– As Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur HBR case study mentions - Ma Chinese takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ma Chinese is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Ma Chinese has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, firm in the HBR case study Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Ma Chinese 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Ma Chinese has relatively successful track record of launching new products.
Opportunities Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur are -
Creating value in data economy
– The success of analytics program of Ma Chinese has opened avenues for new revenue streams for the organization in the industry. This can help Ma Chinese to build a more holistic ecosystem as suggested in the Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur case study. Ma Chinese can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ma Chinese can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ma Chinese is facing challenges because of the dominance of functional experts in the organization. Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ma Chinese to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Ma Chinese to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Ma Chinese to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ma Chinese in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ma Chinese can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Ma Chinese can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Innovation & Entrepreneurship segment.
Manufacturing automation
– Ma Chinese can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Using analytics as competitive advantage
– Ma Chinese has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ma Chinese to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Ma Chinese can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Ma Chinese can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Ma Chinese can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ma Chinese can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Threats Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur are -
High dependence on third party suppliers
– Ma Chinese high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Ma Chinese.
Increasing wage structure of Ma Chinese
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Ma Chinese.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Ma Chinese in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Ma Chinese business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Ma Chinese demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Stagnating economy with rate increase
– Ma Chinese can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Regulatory challenges
– Ma Chinese needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Innovation & Entrepreneurship industry regulations.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Shortening product life cycle
– it is one of the major threat that Ma Chinese is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Ma Chinese has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Ma Chinese needs to keep up with the evolution of technology in the Innovation & Entrepreneurship sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ma Chinese in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Weighted SWOT Analysis of Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Alibaba's Jack Ma: Rise of the New Chinese Entrepreneur is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Ma Chinese needs to make to build a sustainable competitive advantage.
