The concept covered that one might find most helpful and interesting is competition. Even with intense competition companies, their objectives of raising profits, take part in policies to decrease competition, boost their market strength, and enhance their capacity to create economic gains. The initial offering in Alibaba could generate over twenty billion dollars, which would position it among the biggest initial public offerings ever (“Alibaba,” 2014). There are explanations to consider that this is worth it. Alibaba leads e-shopping in China, which has outshined the US to turn into the biggest electronic commerce across the globe.
Baidu, a major search in China, is one of Alibaba’s competitors. Among other services, Baidu has created online-to-offline services by promoting the use of cyberspace and mobile gadgets to facilitate sales. Another Alibaba’s competitor is Tencent, an online giant that owns WeChat, a greatly used messaging application that has also pushed into electronic commerce (“Alibaba,” 2014). With the intensification of competition, Alibaba has decided to buy businesses or stakes in other companies. A likely investor should not just be concerned with the outlay, five billion dollars thus far in the course of this year; the investor could also marvel concerning the swiftness in which a number of transactions are being carried out.
Some of the existing concerns encompass whether the company has accomplished adequate research regarding possible targets. The concerns are not likely to reduce the zeal of investors in case Alibaba floats. The investors will get hooked on Alibaba’s opportunities to retain their development with the swelling of middle-class in China (“Alibaba,” 2014). Alibaba is a company with a competitive benefit, and its competitors, though rising rapidly, are far from surpassing it. The actions taken by Alibaba, such as buying other firms, to retain competitive advantage relate to the concept of competition and actions by competing firms in this course.
Alibaba: After the float. (2014, September 6). The Economist.