the alibaba group case study

Alibaba and the Future of Business

Lessons from China’s innovative digital giant by Ming Zeng

Summary .   

Alibaba is not a retailer in the traditional sense. It doesn’t source or keep stock, and logistics services are carried out by third-party providers. Instead, Alibaba is what you get if you take all the functions associated with retail and coordinate them online into a sprawling, data-driven network of sellers, marketers, service providers, logistics companies, and manufacturers. Indeed, Alibaba does what Amazon, eBay, PayPal, Google, FedEx, all of the wholesalers, and a good portion of manufacturers in the U.S. do, with a healthy helping of financial services for garnish.

Alibaba achieves this by leveraging the new technologies of network coordination and data intelligence. It harnesses the efforts of thousands of Chinese businesses to create an ecosystem that is faster, smarter, and more efficient than traditional business infrastructures.

This is an emerging business model that Ming Zeng, the chair of Alibaba’s Academic Council, calls smart business. Players in the ecosystem share data and apply machine-learning technology to identify and better fulfill consumer needs. This article provides a framework for transforming a company into a smart business.

Alibaba hit the headlines with the world’s biggest IPO in September 2014. Today, the company has a market cap among the global top 10, has surpassed Walmart in global sales, and has expanded into all the major markets in the world. Founder Jack Ma has become a household name.

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Alibaba: A Case Study of Synthetic Control

Jesse M. Fried is Dane Professor of Law at Harvard Law School and Ehud Kamar is Professor of Law at Tel Aviv University Buchmann Faculty of Law. This post is based on their recent paper . Related research from the Program on Corporate Governance includes The Perils of Small-Minority Controllers by Lucian Bebchuk and Kobi Kastiel (discussed on the Forum  here ).

Alibaba conducted a record-breaking IPO six years ago on the New York Stock Exchange and is now valued at over $500 billion. The firm, founded by Jack Ma and others, is now the most valuable Asian public company, as well as the world’s largest ecommerce company and seventh most valuable firm. In a paper recently posted on SSRN, Alibaba: A Case Study of Synthetic Control , we explain how this giant firm is controlled.

Alibaba is known for its unique governance structure: a majority of Alibaba’s board is nominated or appointed by the so-called Alibaba Partnership, which consists of several dozen individuals. Thus, the Partnership controls Alibaba. However, as Lin and Mehaffy (2016) show, the Partnership itself is effectively controlled by a much smaller Partnership Committee that includes Ma as a perpetual member. Control of Alibaba is therefore in much fewer hands than might first appear.

Our paper digs even deeper into Alibaba’s control arrangements and reveals a surprising fact: Ma, who owns less than 5% of Alibaba, effectively controls Alibaba by himself—control that would persist even if his equity stake declined further. The reason is that Ma’s control over Alibaba is not based on his equity but rather on his control of a different firm, Ant Group.

We show that Ma’s control of Ant Group gives him two sources of power over Alibaba.

First, Ma can effectively control the Partnership Committee, and thus the Partnership, and ultimately a majority of Alibaba’s board. Lin and Mehaffy (2016) have already demonstrated that the Committee controls the Partnership, which in turn controls Alibaba’s board. We show that Ma controls the Committee because several of its members are employed by Ma-controlled Ant Group, and thus Ma can cause them to be terminated (from Ant Group, the Partnership, and the Committee).

Second, Ma can use individuals he dominates to at least temporarily cut off (if not permanently seize) licenses that are critical for Alibaba’s business but are held by other firms. The ability to seize these licenses gives Ma substantial holdup leverage over Alibaba. The reason Alibaba’s key assets are held by other firms is that Chinese regulations prohibit foreign entities like Cayman-domiciled Alibaba from possessing business licenses in sensitive sectors, like the internet and media. To get around this prohibition, Alibaba keeps these licenses in so-called variable-interest entities (VIEs) that are 100%-owned by Chinese nationals and that, via a set of contracts, purport to give Alibaba effective control and ownership over these assets.

The ten individuals who own Alibaba’s VIEs include nine Alibaba executives (all but one of whom are partners in the Alibaba Partnership) and one Ant Group executive (who is also a partner in the Alibaba Partnership). Because Ma’s position as the controller of Ant Group enables him to dominate not only Ant Group executives but also any member of the Alibaba Partnership and any Alibaba executive who is not a partner, Ma dominates all of the individuals who own the VIEs.

The enforceability of the VIE arrangement in China is uncertain, as Chinese contract law invalidates contracts that seek to achieve an illegal objective under the guise of otherwise legal acts. In the past, government officials have occasionally barred the use of VIEs, required them to be dismantled, or found them to be invalid.

We argue that Ma can exploit this legal fragility to gain leverage over Alibaba. In particular, he could have the VIEs’ owners threaten to refuse to honor the VIEs’ contracts with Alibaba unless his demands were met, knowing that Alibaba would not sue for fear that the VIE arrangements would be declared void and its business would suffer. A Chinese insider has already followed this script to extract value from Nasdaq-listed GigaMedia.

Our study of Alibaba shows that the separation of ownership from control in public firms, which has been at the center of all corporate governance debates in the last few decades, can arise without pyramidal ownership structures or dual-class shares. We show that an entrepreneur can control a firm without any equity, but rather via a combination of charter provisions and arrangements external to the firm and independent of its capital structure.

We do not know how Ma will wield his power in the future and whether public investors will be harmed. But control matters, and given Alibaba’s size it is important to understand who controls it.

The complete paper can be found here .

One Comment

Excellent analysis! This is very helpful. I expect to see an increasing number of creative control arrangements in the future. If only to combat the increasing activism of institutional investors who want to get involved in the governance of public companies. The effect will be to neuter their activism.

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Case Study: How Alibaba Uses AI Chatbots to Serve a Billion Customers Case Study: How Alibaba Uses AI Chatbots to Serve a Billion Customers

Alibaba uses AI chatbots to handle over two million daily customer service sessions and over 10 million lines of daily chats

February 14, 2024

Reprinted with permission from the  special issue on AI and customer engagement in Management and Business Review . Original title: The Alibaba Challenge: How to Effectively Engage with A Billion Customers

Alibaba Group, China’s largest e-commerce company and one of the world’s biggest companies, has nearly one billion annual active Chinese consumers who make hundreds of millions of transactions daily using its Taobao e-commerce platform.

During Alibaba’s busiest shopping period in 2021 − Taobao’s Double 11 shopping festival − its platforms facilitated 540 billion RMB (US $85 billion) in transactions over a two-day period. The sheer number of customer interactions in Taobao transactions makes it difficult for Alibaba to proactively engage with customers when needed.

Further, Alibaba needs to resolve several million customer service queries each day. The queries can come from end-user consumers or business merchants in Alibaba’s two-sided platform. Consumers may have questions about the Alibaba platforms or were unsatisfied with products they purchased from merchants on the platform. Merchants could have questions about end-user consumers or also about the platforms.

Taken together, Alibaba faces resource restrictions that limit its ability to engage with customers solely by human service interactions. Since 2015, Alibaba’s response has been to implement artificial intelligence (AI) chatbots, supplemented by human service interactions, to both proactively and reactively engage with its customers.

Today, Alibaba uses AI chatbots to handle customer engagements for more than two million daily sessions and over 10 million lines of daily conversations on Taobao’s two-sided platform, representing about 75% of Alibaba’s online and 40% of phone hotline consultations.

Not only has the use of AI chatbots raised customer satisfaction by 25%, based on initial results, it has saved the company more than one billion RMB annually (~US $150 million) by employing AI instead of human contact center agents.

Alibaba’s AI chatbots

Alibaba employs five AI chatbots to cater to the heterogenous demands from customers on Taobao’s two-sided platform.

The Wanxiang-bot is designed to assist merchants on the Taobao platform, such as for resolving questions on the platform’s rules, activities, and service issues.

The Alibee Shop bot is designed to assist merchants with end-user consumer interactions on Taobao, such as for service issues or any direct merchant-to-consumer engagements.

The Alime bot is aimed at helping the end-user consumer. It is employed in online and phone hotline channels and relies on a rich set of interactive user interface components that can provide text dialogues, cards, graphics, videos and other conversational interactions between the robots and consumers.

Alime-bot also possesses duplex voice dialogue capabilities and a targeted voice user interface to serve users who prefer to consult through telephone channels.

Alibaba’s Five AI-bots Employed for Customer Service Engagements (arrow direction indicates which party initiates the conversations)

The AI-bot complements Alime in that it proactively engages with end-user consumers and acts as an intermediary during service disputes with business merchants. The AI-bot’s underlying algorithms use transaction and conversational information to evaluate service disputes and make automated judgments. The AI-bot then calls end-user consumers to discuss the dispute decision. If consumers are satisfied with the AI-bot’s decision, the case is closed; if not, the AI-bot helps consumers fill out appeal forms for case resolution by a human evaluator.

The Dahuang-bot helps train customer service personnel by simulating a larger number and more diverse set of consumer and merchant encounters compared to a non-AI-based training system.

Implementation challenges and solutions

The first challenge Alibaba faced was organizational hesitancy: Engineers and the leadership team were wary of AI’s ability to positively engage with and resolve consumer and business merchant queries. To overcome this hesitancy, the firm implemented a fast-fail strategy that continually tested AI vs. human responses in small-scale real-world experiments.

The pilot proved that the AI chatbots outperformed their human counterparts by delivering superior end-user customer satisfaction scores as well as improved business merchants’ first-contact resolution scores. Those results led to full Alibaba organizational buy-in to implementing AI customer engagement services.

The second challenge involved two technical issues. Many initial customer queries involved a user-intent classification problem: Queries were stated similarly but had different underlying intents. For example, “I need help with my order” can mean needing help with tracking an order, getting a refund, or many other intents. In addition, many customer queries involved a long-tail problem: extremely low probabilities for certain types of queries. Since niche topics by nature have less data, queries about them tend to lead to less accurate chatbot answers – which lowers customer satisfaction.

To overcome the first technical problem, Alibaba developed an Extensible Multitask Learning paradigm using a Meta Lifelong Learning Framework that learned robust text representations across tasks and employed a Least Recently Used replacement policy to manage model deployment and memory resources. To overcome the latter problem, Alibaba implemented a multi-grained interactive matching network for few-shot text classification that leverages a dynamic routing algorithm in meta-learning to better adapt and generalize unseen classes while also providing more memory-based flexibility.

AI vs. human results

Overall, Alibaba’s AI-based customer satisfaction scores exceeded or matched human-based engagements in most product categories. Crucially, it provided customers much quicker responses and enabled Alibaba to engage with customers at all hours of the day.

Based on A/B testing results, Alibaba’s proactive AI-based intermediary dispute service resulted in a 25% increase in customer satisfaction in its first few weeks of operation from its previous non-AI-based dispute resolution procedure.

Alibaba’s training bot is assisting more than 1,500 customer service personnel daily. In addition, its training bot is reducing customer service personnel training time by more than 20%.

Finally, Alibaba has realized cost savings of over a billion RMB annually (~US $150 million) by employing AI over humans for service engagements.

Lessons learned and next steps

Alibaba employs its five AI-based chatbots in more than 80 Alibaba-related apps, such as Taobao, Xianyu, Fliggy, Hema, and Lazada. Initially, it took Alibaba developers one year to create the initial AI-bot. However, this process has become much more efficient, and it now takes Alibaba’s developers only one month to develop a new AI-bot for its platforms, although they have to continually improve the bot.

Alibaba has also learned that customers have accepted the chatbots and appreciate its role in resolving many, though not all, types of customer service queries. It has learned it is critical to constantly test the structure to see what types of help customers are willing to accept from AI-based chatbots.

A key lesson Alibaba learned was that, despite its chatbots’ success, AI cannot and should not completely replace human-based customer service engagements. But each should be deployed depending on the scenario that best suits their capabilities.

For example, for simple FAQ questions, AI can directly reply to users. However, for complex complaints and disputes, AI can replace manual labor-intensive tasks, such as collecting information on appeals and vouchers, and possibly making initial decisions, but humans will still need to review the AI-collected information − in addition to non-standard materials based on the collected information − to make final judgments.

Going-forward, Alibaba continually invests significant resources to make a seamless human-machine collaboration. For example, Alibaba’s AI-bots continuously monitor whether customers encounter obstacles and whether the AI-based service can understand and resolve customers’ queries.

Whenever appropriate, the AI-bot automatically transfers customers to human-based service agents and will then prompt and provide agents essential information to help continue the conversation without asking the customers to repeatedly describe the problem.

At the same time, the AI-based bot enhances customer interactions with human agents by providing data-based solutions, particular word phrasing recommendations, and issuing on-the-spot warnings to human agents if they behave improperly.

Finally, Alibaba believes that although technologically proficient AI natural language processing models and training data are important, establishing an organizational mindset offering customer-centric AI-based solutions that efficiently solves customer problems is more important than just implementing AI.

Hence, Alibaba is continuing to improve its AI-bots through hundreds of releases, iterations, and improvements over time, with the ultimate goal of solving customers’ problems in the most efficient and satisfying method possible, whether through AI or human-based service engagements.

About the Author

Yitong Wang, Offer Mintz, Depin Chen, Kehan Chen

Yitong Wang is the head of the Data Science and Business Insights Departments in the Customer Experience Business Group at Alibaba. Ofer Mintz is an associate professor of marketing at the UTS Business School at the University of Technology Sydney. Depin Chen is the director of Applied Algorithms in the Customer Experience Business Group at Alibaba. Kehan Chen is the manager of the Chatbot Algorithm Team in the Customer Experience Business Group at Alibaba.

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Case study: Alibaba group

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This chapter explains a case study of Alibaba group that provides practical insights into the art of thriving as a global business. Alibaba Group has become one of the most powerful e-commerce business companies. The firm was established by an English teacher named Jack Ma in 1999 and is headquartered in Hangzhou, China. The aim was to launch a website that would help small Chinese exporters and entrepreneurs to sell their products. An important millstone occurred in 2005, when Alibaba Group formed a strategic partnership with Yahoo. The largest online commerce company went public in 2014, when it launched its IPO. Today, the company and its segment businesses operate wholesale and retail online marketplaces in addition to Internet-based businesses, which offer advertising, electronic payment, cloud-based computing, network services, and others. The financial results of Alibaba Group show its dominant position as the world's largest retailer with revenues of 101,143 million yuan, overtaking its competitor, Walmart.

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Alibaba group: technology, strategy, and sustainability description.

Alibaba Group (Alibaba) had grown from its founding in 1999, in an effort to help Chinese manufacturers and exporters reach global markets, to become a global leader in e-commerce, big data, and cloud technology. The company's 2014 initial public offering on the New York Stock Exchange had been the largest to date. The company's founder and chairman, Jack Ma, had used the funds to globally expand Alibaba's operations and its hold on diverse markets. Ma's aim was to have Alibaba exist in three centuries and to not only generate profits but also improve lives and societies in China and beyond. How could Ma ensure long-term success for shareholders and prosperity for China and the world?

Case Description Alibaba Group: Technology, Strategy, and Sustainability

Strategic managment tools used in case study analysis of alibaba group: technology, strategy, and sustainability, step 1. problem identification in alibaba group: technology, strategy, and sustainability case study, step 2. external environment analysis - pestel / pest / step analysis of alibaba group: technology, strategy, and sustainability case study, step 3. industry specific / porter five forces analysis of alibaba group: technology, strategy, and sustainability case study, step 4. evaluating alternatives / swot analysis of alibaba group: technology, strategy, and sustainability case study, step 5. porter value chain analysis / vrio / vrin analysis alibaba group: technology, strategy, and sustainability case study, step 6. recommendations alibaba group: technology, strategy, and sustainability case study, step 7. basis of recommendations for alibaba group: technology, strategy, and sustainability case study, quality & on time delivery.

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Case Analysis of Alibaba Group: Technology, Strategy, and Sustainability

Alibaba Group: Technology, Strategy, and Sustainability is a Harvard Business (HBR) Case Study on Global Business , Texas Business School provides HBR case study assignment help for just $9. Texas Business School(TBS) case study solution is based on HBR Case Study Method framework, TBS expertise & global insights. Alibaba Group: Technology, Strategy, and Sustainability is designed and drafted in a manner to allow the HBR case study reader to analyze a real-world problem by putting reader into the position of the decision maker. Alibaba Group: Technology, Strategy, and Sustainability case study will help professionals, MBA, EMBA, and leaders to develop a broad and clear understanding of casecategory challenges. Alibaba Group: Technology, Strategy, and Sustainability will also provide insight into areas such as – wordlist , strategy, leadership, sales and marketing, and negotiations.

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Alibaba Group: Technology, Strategy, and Sustainability case study solution is focused on solving the strategic and operational challenges the protagonist of the case is facing. The challenges involve – evaluation of strategic options, key role of Global Business, leadership qualities of the protagonist, and dynamics of the external environment. The challenge in front of the protagonist, of Alibaba Group: Technology, Strategy, and Sustainability, is to not only build a competitive position of the organization but also to sustain it over a period of time.

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The Alibaba Group: Technology, Strategy, and Sustainability case study solution requires the MBA, EMBA, executive, professional to have a deep understanding of various strategic management tools such as SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.

Texas Business School Approach to Global Business Solutions

In the Texas Business School, Alibaba Group: Technology, Strategy, and Sustainability case study solution – following strategic tools are used - SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis. We have additionally used the concept of supply chain management and leadership framework to build a comprehensive case study solution for the case – Alibaba Group: Technology, Strategy, and Sustainability

Step 1 – Problem Identification of Alibaba Group: Technology, Strategy, and Sustainability - Harvard Business School Case Study

The first step to solve HBR Alibaba Group: Technology, Strategy, and Sustainability case study solution is to identify the problem present in the case. The problem statement of the case is provided in the beginning of the case where the protagonist is contemplating various options in the face of numerous challenges that Alibaba Ma is facing right now. Even though the problem statement is essentially – “Global Business” challenge but it has impacted by others factors such as communication in the organization, uncertainty in the external environment, leadership in Alibaba Ma, style of leadership and organization structure, marketing and sales, organizational behavior, strategy, internal politics, stakeholders priorities and more.

Step 2 – External Environment Analysis

Texas Business School approach of case study analysis – Conclusion, Reasons, Evidences - provides a framework to analyze every HBR case study. It requires conducting robust external environmental analysis to decipher evidences for the reasons presented in the Alibaba Group: Technology, Strategy, and Sustainability. The external environment analysis of Alibaba Group: Technology, Strategy, and Sustainability will ensure that we are keeping a tab on the macro-environment factors that are directly and indirectly impacting the business of the firm.

What is PESTEL Analysis? Briefly Explained

PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in Alibaba Group: Technology, Strategy, and Sustainability case study. PESTEL analysis of " Alibaba Group: Technology, Strategy, and Sustainability" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.

How to do PESTEL / PEST / STEP Analysis? What are the components of PESTEL Analysis?

As mentioned above PESTEL Analysis has six elements – political, economic, social, technological, environmental, and legal. All the six elements are explained in context with Alibaba Group: Technology, Strategy, and Sustainability macro-environment and how it impacts the businesses of the firm.

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To do comprehensive PESTEL analysis of case study – Alibaba Group: Technology, Strategy, and Sustainability , we have researched numerous components under the six factors of PESTEL analysis.

Political Factors that Impact Alibaba Group: Technology, Strategy, and Sustainability

Political factors impact seven key decision making areas – economic environment, socio-cultural environment, rate of innovation & investment in research & development, environmental laws, legal requirements, and acceptance of new technologies.

Government policies have significant impact on the business environment of any country. The firm in “ Alibaba Group: Technology, Strategy, and Sustainability ” needs to navigate these policy decisions to create either an edge for itself or reduce the negative impact of the policy as far as possible.

Data safety laws – The countries in which Alibaba Ma is operating, firms are required to store customer data within the premises of the country. Alibaba Ma needs to restructure its IT policies to accommodate these changes. In the EU countries, firms are required to make special provision for privacy issues and other laws.

Competition Regulations – Numerous countries have strong competition laws both regarding the monopoly conditions and day to day fair business practices. Alibaba Group: Technology, Strategy, and Sustainability has numerous instances where the competition regulations aspects can be scrutinized.

Import restrictions on products – Before entering the new market, Alibaba Ma in case study Alibaba Group: Technology, Strategy, and Sustainability" should look into the import restrictions that may be present in the prospective market.

Export restrictions on products – Apart from direct product export restrictions in field of technology and agriculture, a number of countries also have capital controls. Alibaba Ma in case study “ Alibaba Group: Technology, Strategy, and Sustainability ” should look into these export restrictions policies.

Foreign Direct Investment Policies – Government policies favors local companies over international policies, Alibaba Ma in case study “ Alibaba Group: Technology, Strategy, and Sustainability ” should understand in minute details regarding the Foreign Direct Investment policies of the prospective market.

Corporate Taxes – The rate of taxes is often used by governments to lure foreign direct investments or increase domestic investment in a certain sector. Corporate taxation can be divided into two categories – taxes on profits and taxes on operations. Taxes on profits number is important for companies that already have a sustainable business model, while taxes on operations is far more significant for companies that are looking to set up new plants or operations.

Tariffs – Chekout how much tariffs the firm needs to pay in the “ Alibaba Group: Technology, Strategy, and Sustainability ” case study. The level of tariffs will determine the viability of the business model that the firm is contemplating. If the tariffs are high then it will be extremely difficult to compete with the local competitors. But if the tariffs are between 5-10% then Alibaba Ma can compete against other competitors.

Research and Development Subsidies and Policies – Governments often provide tax breaks and other incentives for companies to innovate in various sectors of priority. Managers at Alibaba Group: Technology, Strategy, and Sustainability case study have to assess whether their business can benefit from such government assistance and subsidies.

Consumer protection – Different countries have different consumer protection laws. Managers need to clarify not only the consumer protection laws in advance but also legal implications if the firm fails to meet any of them.

Political System and Its Implications – Different political systems have different approach to free market and entrepreneurship. Managers need to assess these factors even before entering the market.

Freedom of Press is critical for fair trade and transparency. Countries where freedom of press is not prevalent there are high chances of both political and commercial corruption.

Corruption level – Alibaba Ma needs to assess the level of corruptions both at the official level and at the market level, even before entering a new market. To tackle the menace of corruption – a firm should have a clear SOP that provides managers at each level what to do when they encounter instances of either systematic corruption or bureaucrats looking to take bribes from the firm.

Independence of judiciary – It is critical for fair business practices. If a country doesn’t have independent judiciary then there is no point entry into such a country for business.

Government attitude towards trade unions – Different political systems and government have different attitude towards trade unions and collective bargaining. The firm needs to assess – its comfort dealing with the unions and regulations regarding unions in a given market or industry. If both are on the same page then it makes sense to enter, otherwise it doesn’t.

Economic Factors that Impact Alibaba Group: Technology, Strategy, and Sustainability

Social factors that impact alibaba group: technology, strategy, and sustainability, technological factors that impact alibaba group: technology, strategy, and sustainability, environmental factors that impact alibaba group: technology, strategy, and sustainability, legal factors that impact alibaba group: technology, strategy, and sustainability, step 3 – industry specific analysis, what is porter five forces analysis, step 4 – swot analysis / internal environment analysis, step 5 – porter value chain / vrio / vrin analysis, step 6 – evaluating alternatives & recommendations, step 7 – basis for recommendations, references :: alibaba group: technology, strategy, and sustainability case study solution.

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Alibaba: Entrepreneurial growth and global expansion in B2B/B2C markets

• Published: 01 July 2017
• Volume 15 , pages 366–389, ( 2017 )

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The purpose of this case-based research is to analyze and discuss Alibaba Group (hereafter Alibaba) and its entrepreneurial growth and global expansion in B2B/B2C markets. The paper uses company and industry-specific data and surveys to analyze a fast growing Chinese B2B/B2C firm and its internationalization and expansion in global markets. Findings of the work reveal that in a short time, Alibaba has become a major entrepreneurial icon and global player and continues to grow worldwide because of its well-planned business initiatives and B2B/B2C-based business models. The paper also provides implications in the area of international entrepreneurship and its related areas. International entrepreneurs need to learn from Alibaba’s fast growing business model and dynamic growth because of its competitive platforms and Web-based strategies which helped the company to target small and medium-sized enterprises (SMEs) in global markets. Within the areas of international entrepreneurship and international business, the paper also provides discussion which deals with the changing e-commerce industry and its future growth and developments.

El objetivo de esta investigación basada en casos de negocios es analizar y discutir el Grupo Alibaba (de aquí en adelante Alibaba) y su crecimiento empresarial y la expansión global en mercados de B2B/B2C. El ensayo utiliza estadísticas y encuestas específicas a la compañía e industria para analizar una empresa china B2B/B2C y su internalización y expansión en los mercados globales. Los resultados del estudio revelan que dentro de un período breve, Alibaba ha llegado a ser un icono empresarial y un actor global y que continúa a crecer globalmente por causa de sus iniciativas negociantes bien planeadas y sus modelos de negocio basados en el B2B/B2C. La investigación también da implicaciones relacionadas al espíritu emprendedor internacional y sus cualidades relacionadas. Creemos que los empresarios internacionales deben aprender del modelo de negocio de Alibaba que se expande de una forma rápida y el crecimiento dinámico que resulta de sus plataformas competitivas y sus estrategias digitales que han ayudado a la compañía captar a empresas pequeñas y medianas (SMEs) dentro de los mercados globales. En las áreas del emprendimiento internacional y los negocios internacionales, el ensayo también ofrece una discusión relacionada a la industria variable del comercio digital y su crecimiento y desarrollo futuro.

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Acknowledgements

The author would like to thank two anonymous reviewers of the journal for their suggestions and helpful comments. Also special thanks to Andrew Reynolds for translating the work in Spanish. The author is also grateful to the Editor (Hamid Etemad) for his encouragement and timely suggestions in the review process. The material in this case is intended to be used as a basis for discussion rather than to illustrate either effective or ineffective handling of a managerial situation or business practices.

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Anwar, S.T. Alibaba: Entrepreneurial growth and global expansion in B2B/B2C markets. J Int Entrep 15 , 366–389 (2017). https://doi.org/10.1007/s10843-017-0207-2

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At the end of last year, Dan Marokane became the 12th chief executive of Eskom in the past decade alone. He returned to the embattled South African state-owned utility monopoly, which he had left in 2015, to tackle the tensions between fixing the company to ensure energy security in South Africa and meeting its “just energy transition” commitments to lower emissions.

At COP26, the UN Climate Change Conference in Glasgow, in December 2021, the US, EU, UK, France and Germany pledged $8.5bn to help South Africa shut its coal-fired powered stations. Eskom generates more than 90 per cent of electricity used in South Africa and the Southern African Development Community region, of which 85 per cent is produced from fossil fuels.

Overall, the energy sector contributes 41 per cent of South Africa’s CO₂ emissions, according to the World Bank , earning Eskom the dubious honour of being called “the world’s worst polluting power company” by some environmental groups. Eskom also finds itself at odds with climate activists and academics such as those from University College London and the International Institute for Sustainable Development, who argue that “no more fossil fuel projects are needed as renewable energy sources take up the demand”.

In addition, since 2008, Eskom has struggled with debilitating national blackouts euphemistically known as “load shedding”. These were caused by insufficient generation to meet demand for power as a result of poor management, corruption and bad political decisions. Electricity prices spiked and the lack of power further weakened the South African economy, costing as much as £40mn per day.

The authors

Morris Mthombeni and Albert Wocke are professors at the Gordon Institute of Business Science at the University of Pretoria in South Africa; Professor Mthombeni is also dean at Gibs

During the first half of 2024, the situation appeared finally to be stabilising, following the appointment of Mteto Nyati as Eskom chairman. Nyati had a successful track record in the technology and telecommunication sectors. Marokane, as a new chief executive with a supportive board chair, is also able to draw on his prior experience at Eskom, when he was in charge of generation.

Marokane has cautioned that, while there has been no load shedding for several months, “South Africa is not out of the woods yet”. His strategy includes carrying out extensive maintenance at underperforming coal-fired power stations that had been poorly maintained, and dismissing corrupt or incompetent managers. The turnaround is complicated by a new business model and the need for Eskom to move to cleaner energy production as part of the just transition programme.

Eskom was a vertically integrated business since its inception in 1923 but, in 2019, the South African government began a process of unbundling the company into separate subsidiaries for generation, transmission and distribution. The objective was to tackle the problems that led to load shedding and improve efficiency and transparency, reduce rent seeking, and protect capital providers interests.

The first division to be spun off in July this year was transmission, now an Eskom subsidiary known as the National Transmission Company South Africa, which operates with a separate board and management team. This has the potential to be the most profitable of the subsidiaries and will run the transmission system and buy electricity from multiple generators, not only Eskom. It will eventually provide a platform for generators, consumers, retailers and traders to trade with each other, as happens in a number of other countries. But Marokane might want to push back the timing of the spin-off for two related reasons.

First, Eskom ought to protect its less profitable generation division, currently dominated by fossil-fuel energy sources. In July, Eskom spoke out against government plans to issue licences allowing private generators to sell directly to customers, and to permit the import of energy into South Africa. The company was concerned that applicants would be able to cherry-pick customers, leaving existing small users without the present cross-subsidy from larger consumers.

Second, to meet its carbon emission reduction targets, Eskom must find a way to address a continuing reliance on fossil fuels as the main source of energy in its generation division. The company had pledged at COP26 to reduce emissions from 442mn tons a year to between 350mn and 420mn tons by 2030. Retaining transmission capability within Eskom could help support a sustainable restructure, leading to a better funded just transition plan.

Marokane was confident Eskom would reduce about 71mn tons of CO₂ from generation by 2030, as it aggressively built a renewable energy portfolio. Yet it has failed to repurpose its 63-year-old 1,000MW Komati power station, east of Pretoria — it was finally decommissioned in October 2022.

Owing to the social consequences of the loss of hundreds of jobs at the fossil-fuelled Komati, which were replaced by many fewer focusing on social entrepreneurship initiatives, Marokane described it as an “ atomic bomb scenario in terms of social discord”.

Despite partnering with the South African Renewable Energy Technology Centre and the Global Energy Alliance for People and Planet to redeploy the hundreds of people who lost jobs after the closure of Komati, Eskom has found that the path to a just energy transition is not a smooth one.

Discussion points

See the FT video above, and:

ft.com/eskom-case1

ft.com/eskon-case2

Considering the current strategy to unbundle Eskom into generation, distribution and transmission subsidiaries, how can the company make its generation business comfortably profitable?

Is the organisational restructure a crucial part of Eskom’s plan to achieve its emission reduction targets? If Eskom believed the restructure was unnecessary for it achieve its 2030 emissions reduction targets, could Marokane and his team consider retaining the current structure for the foreseeable future?

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