The Alibaba Group and Online to Offline (O2o) Sales Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Financial strategy

Certainly, the investment opportunities are gateway to the future success.The company should explore and capture the opportunities of investments for long term growth and success of the company. It is imperative to note that the online Chinese industry has been in the developing phase and there is a likelihood that it would be growing by 60 percent of the annual compound rate. Also, the larger portion of Chinese service industry has not been tapped, thus providing an opportunity to the company for tapping the untapped markets and investing in the service sector so the company can flourish or grow in the forthcoming years. Afterwards, the company can have a first mover advantage as well.

Inaddition to this, the risk mitigation strategy would result in variety of benefits to the company.The steps included to mitigate the risk are as follows:

Investing in the untapped service markets for long term. Also, the simple future value formula is used to calculate the future value of the gross volume of merchandise, resulting in 576.82 billion, which depicts that the risk of company’s investment is certainly low. Furthermore, the present value is calculated at 30 percent annual compound rate for the year 2020, then the present discounted value of the company results in 1616.15 billion, hence supporting thecompany to explore or capture the opportunities in untapped markets.

Marketing strategy

Evidently, it is significantly important for the company to attract new customers and retain the current customers, which requires the company to strengthen its position in the market and pursue marketing efforts in order to achieve marketing objectives. When the highly established brands will use Alibaba website to market their products, the customers would come to know about the mission and business type of the company, which would allow direct marketing and advertising. It is recommended to use tag lines and labels when postingon online platforms, for the purpose of gaining the attention of the customers or viewers.It should be updated with the passage of time on the basis of occasions, sessions and eventson the international levels.By doing so, the brand image and reputation of the company can be strengthened in the market.

Competition and Offline Quality Concern:

It is important for the company to increase its market size and product line, for which, the company should follow diversity growth strategy to control the quality issues and to compete in the head-to-head competition. To remain a market leader and to beat the competition, the company should complement variety of growth strategies to sustain the competitive advantage. The company should establish the adequate credit guarantee system for the purpose of increasing the user scale and to build the foundation for the customer trust and loyalty.

In addition to this, the company should immensely strive to distinguish itself from the market competitors or substitutes.It should use its unique advantageswhich are high efficiency and low cost in order to compete with the physical stores. The company has the ability to draw in a larger number of purchasers and sellers, so it can change the game rules in order to enhance its competitive strengthand market position.

By investing in the online to offline business model, the sales would increase, allowing the company to reach the broader potential customers of prospective new customer base. It would also result in significant returns for the company.By driving the online customers to visit the physical stores would most likely increase the overall expenditure of the customers, hence, increasing the profit margin of the company.

In addition to this, it is recommended that the company should openits network of distribution and formulate human resources strategies to retain current employees and attract new employees. The employees should be highly motivated to work collaborativelyto run the operations of distribution network. To reduce the quality concern, the company should have its own distribution network, so therewouldn’t beany intermediary between the company and the customers.

Also, the distribution network would allow the company to gain the competitive advantage over competitors, and by interacting directly with customers; the company would retain a massive control over its performance and product/service. Not only this, it would also allow the company to collect the valuable data on buying habits of customers.

Appendix A

Valuation of company
	*Growth*	*0.1*
	*GMV in billion*	*296*
	*year*	7
	*future value*	?

	FV	**PV(1+g)^n***
	FV	*576.8202616*

	*value the company*
	*Growth rate*	*0.1*
	*Compound rate*	*0.3*
	n	7
	CF
	*pmt*	*576.8202616*
	*solution*
	*present value*	**pmt(1-(1+r)^-n)/r***
	*present value*	*1616.315138*