Assignment Sample on 7BUS2039 Strategic Leadership and HR Management
Introduction
This report will critically evaluate the business strategy of the chosen company, which is going to be considered as Alibaba. Moreover, the discussion will be entirely based upon the strategies that are being adopted by the brand including human resource management strategy as well. In the case of business strategy, Porter’s generic model will be illustrated along with this; the long-term business strategy will also be viewed in respect to Alibaba. Moreover, this report will also reflect how the business strategy will be achieved through effective HRM practices. Furthermore, the resource-based view model will be analysed for the effective comprehension of the study.
Company background
Alibaba is a Chinese multinational organisation, which is ruling all over the world. The organisation has been found to be specialised in retail, technology, e-commerce and the internet as well. The brand provides services through web portals to consumer-to-consumer, business-to-business and business-to-consumer (Alibaba Group Holding Limited, 2021). The brand has several services such as Alipay, Taobao, Tmail, AliOS, AliExpress, Lazada and many more. In China, the organisation has been found to be adding the revenue of CN¥ 717.289 billion and US$ 109.480 billion worldwide (Alibaba Group Holding Limited, 2021). The organisation is found to be the most valuable brand as it has been listed to be the 31st largest public corporation in the Forbes Global 2000 in the year 2020. The culture of the organisation is to champion small enterprises and provide them with the opportunity to flourish in the marketplace (Alibaba Group Holding Limited, 2021).
HRM strategy
HRM strategy takes the organisation activities to another level, which improves productivity and creativity across the organisation. As demonstrated by Zardasht et al. (2020), the management allows the business to properly enter the marketplace effectively along with proving potential advantages as well. In this relation, Alibaba is the leading corporation globally, which has a specific framework where communication, connection and commitment are the major concrete base of the HRM strategy (Linkedin, 2020). The management works together to make better initiatives across the organisation along with effective communication and workflow. The company suggests connecting the employees to the employees along with connecting them to the company as well. It is very essential for the employee to understand the reason behind the objective and actual meaning of mission of the organisation. Even, every member of the organisation is committed towards each other through thick and thin (Linkedin, 2020). Through the smooth execution of the organisational HRM strategy, the brand has succeeded in its goal to make the employee thrive better. In this respect, the culture and value of the organisation represent their enhanced HRM strategy which reflects that trust is everything that makes every complex thing simple (Alibaba Group Holding Limited, 2021). Moreover, the HRM strategy of Alibaba has been identified to be positively supporting their workforce while maintaining the stability in their business (Linkedin, 2020). Placing the enhanced HR in the organisation is improving the vision of the brand along with influencing the workforce to be competitive in business along with strengthening the communication for maintaining efficiencies and transparencies.
Business strategy
Porter’s Generic model
According to the theoretical understanding, the market position of an organisation can be determined by measuring their profitability as compared with the industrial average. Sustainable competitive advantage is recognised, as the fundamental basis forever is profitability in an industry with long run vision. With regards to this concern, the theory has discussed three generic strategies for the achievement of different industrial performance. These strategies include cost leadership, differentiation, and focus (Islami et al. 2020). The focus strategy is segmented into two categories those are cost focus and differentiation focus. From the perspective of Alibaba, the company is noticed to focus upon cost leadership strategy.
Alibaba has been looking forward to cut down their relational operational expenditure as much as possible. The company actively targets the mass market where are many consumers might be able to access the organisational website and thereby positively influence their growth and profitability in the market. A cost optimisation policy has been undertaken by the organisation with the consideration of different innovative initiatives. Empowered logistics management can be seen within the organisation that is cutting down the operational cost to a large extent. Moreover, product line rationalisation is also conceptualized by Alibaba. It can be supported with the evidence of Alibaba where 80% of the organisational sales were generated from top 20% of their products (Wilson, 2021). As a result of this, Alibaba has been able to focus on the most profitable products and offerings by eliminating low-profit products that might eventually enlarge their production cost. Distinctive application of automated inventory management and other respective technological advancements can be notified within the operations of Alibaba (Wilson, 2021). It has been benefiting the organisation with extended time management with rapid transformation of business efficiency with cost reduction.
On the other hand, the differentiation strategy is eventually followed by Alibaba as a subsequent part of enlarging their competitive advantage. In this case, the technological advancement can be reflected from the perspective of Alibaba that has been differentiating their offerings from existing market competitors. For example, the context of Alibaba cloud can be considered. Moreover, the involvement of artificial intelligence, next-generation computation, hyperconnected manufacturing facilities, blockchain technology and others can be defined that are empowering the organisational differentiation strategy as a subsequent part of their business growth (Chou, 2020).
Achieving business strategy with HRM
Alibaba has been attentive to signify their business strategy with the maintenance of proper HRM approach. In this regard, the company has been focusing on providing adequate training and development facilities for their potential employees in order to enlarge their skills and knowledge level regarding the maintenance of advanced technologies. However, the context of Alibaba training program can be considered in this case where the employees might obtain the opportunity of developing their knowledge base with different innovative programs. These programs include Alibaba cloud expert, Alibaba cloud associate, or Alibaba cloud professional and others (Strength Scape, 2021). Moreover, Alibaba cloud technical essentials are eventually provided by the organisation as an integral part of boosting individual performance and capability. Regional training programs are eventually provided by Alibaba where worldwide participants and employees are allowed to take part.
On the other hand, employee recognition and rewards are eventually provided by Alibaba as a sequential parameter to improve employee motivation level (Strength Scape, 2021). It is considered as a long-term vision from the organisational perspective that might extensively support the organisational business strategy. With an increasingly motivated and skilled workforce, Alibaba has been looking forward to support their differentiation strategies. Moreover, proper training and development can also open up wider opportunities for Alibaba in terms of supporting cost leadership attributes with profound focus upon the reduction of operational cost.
Apparent concerns can be noticed from the organisational perspective towards regarding the empowerment of staff relationships. Employee engagement is widely preferred by the management of Alibaba as an integral part of supporting their business strategies (Wilson, 2021). With the consideration of distinctive employee engagement and motivation, Alibaba has been experiencing an increasing employee base across their global operations with profound growth in each year. During 2021, the company has been operating with 251,462 full-time employees (Ma, 2021). With an increasing and skilled workforce, Alibaba is looking forward to efficiently deploy and handle innovative technologies and thereby improving consumer experience. This factor has been positively influencing the organisational business growth by profoundly supporting their business strategies with suitable HRM approach.
Competitive advantages of Alibaba
Based on the global operations of the company it can be stated that the organisation has 5 distinct advantages that have helped this Chinese organisation to maintain a dominant position in the global market against e-commerce giants like Amazon (Zhang and Wang, 2018).
Location
Company’s location is one of the most beneficial factors for Alibaba. There are over 550 million internet subscribers in China who spend an average of twenty hours each week e-commerce shopping, this has made the country the largest and most opportunistic internet market (Forbes, 2021). Furthermore, China is abandoning traditional retail in favour of e-commerce. This is one of the most significant aspects that determine Alibaba’s competitiveness in the global market. The organisation has a huge source of revenue in the domestic markets, which help in funding its international operations, and has been subsequently added to the company’s competitive advantage in both the domestic and global markets (Falcone et al. 2019). Furthermore, the support of the government has been another essential aspect that has helped them to maintain this competitive advantage at greater levels.
Economies of scope
In this regard, it is the two different sites, which the organisation uses to distribute its products among its target consumers. Alibaba has two shopping sites under its organisation:
- Taobao: known for selling thousands of non-branded items from unidentified sellers
- Tmall: only specialises in selling branded products
The range of things available on either side, particularly Taobao, is remarkable. This shopping site usually attracts the majority of the customers who are looking for quasi products at a much cheaper rate (Zhang and Ravishankar, 2019). However, this site is also linked with copy products, duplicates and imitations or products sold by larger brands. Product diversification is another aspect that attracts millions of customers looking for everything starting from FMCG items, furniture, clothing and fashion, beauty products, accessories, electronics and many more (Forbes, 2021).
Cost reduction
The third benefit is a scale or the cost reductions that come with a higher volume of sales. This significantly allows the company to offer products at a much cheaper rate to a large number of target customers (Greeven and Yu, 2020).
Networking
The fourth and possibly most crucial advantage is networking, which refers to the advantages Alibaba gains from its constantly increasing number of consumers who are willing to avail the products and services offered by the company. As a result, just as the network growth, the overall value of the products and services also grows paving way for the company to achieve a competitive edge in the market. (Schmuck and Benke, 2020). Alibaba is a form of close collaboration between multitudes of merchants and several different corporations operating on the company’s ecommerce platform. Alibaba in this regard owns the platform helping the merchants to use this platform to supply their items to different customers in different markets.
Close links with the government
Alibaba’s close links with the Chinese government are the fifth competitive advantage. Such relationships are crucial for companies in any developed economy however to have such relations is more important in China where the government is highly bureaucratic (Zhang and Gu, 2018). For example, Alibaba was among the top five companies sorted by the Chinese government to enter online banking, a huge possibility in a nation where the state controls banks (Forbes, 2021).
Long term sustainability strategy
Resource-based View
The resource-based view is a managerial framework that helps organisations to develop strategies to use their existing resources to achieve competitive advantage in a sustainable manner. In this regard, the resources that are utilised by Alibaba can be taken into consideration for identifying how effective their strategies are in terms of achieving sustainability. In this regard, it can be stated that the relationship the organisation has with all the margins are quite sustainable in the long run, as the company does not charge any extra fees for merchants to sell on its platform. Help the organisation to maintain a positive relationship with all their sellers that utilise Alibaba’s platforms to sell products to their target customers (Fan et al. 2021).
However, due to the fact that the company has been linked with several claims that provide duplicate items and limitations of branded products the ethical standards of operations followed by Alibaba is quite questionable. Moreover, this also reduces the trust of customers in the global market and can have an impact on the organisation’s long-term sustainability (Gao and Yi, 2021).
Conclusion
Based on the above-discussed findings it can be implicated that Alibaba’s global competitiveness has much to do with its HRM strategy. The organisation utilises its overall human resource to achieve a competitive advantage at a global level. To effectively utilise the existing human resources of the company Alibaba adopts effective communication strategies that have helped them to achieve a more cooperative and collaborative workforce. The above study has also held in identifying the five most prominent factors that determine the company’s competitive advantage and has thereby helped them in achieving their business strategy.
Reference
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