Tag Archives for " China "

Will Alibaba and its 40 million accomplices ride roughshod over Corporate America?

Now that all the factories have moved to China (or some such places as Vietnam, Bangladesh, Taiwan), and all the customers have moved to the PC (or some such places as mobile phones or tablets) what will happen to all the middlemen?

The retailers, the wholesalers, the shopping centres, the warehouse parks, the dealers, the brands, the long established cosy relationships, the long martini lunches, the twice weekly afternoon golf games and the executive chefs in the board rooms?

Many people are asking this question in many different ways. While the scenario above has not fully transpired yet, and, may indeed never transpire in such a stark detail, many companies are starting to ask “what if that happens”.

Consider, for instance, all the happenings at Alibaba. The Chinese e-commerce giant went public in the US with an IPO that stirred the world at large and the online retailing world in particular. If you are wondering about the reason, then look at the numbers below. As per Wall Street Journal

In 2013, the combined transaction volume of Taobao and another Alibaba-run shopping site called Tmall reached $240 billion, says a person with knowledge of the figure.

The total is more than double the size of Amazon.com Inc, triple the size of eBay and one-third larger than the value of all the transactions last year at the two U.S.-based e-commerce giants combined.

People stood up to take notice only when there were widely reported news reports that just in one day (the Chinese version of Black Friday), Alibaba achieved nearly $5.75 billion in sales (on just one of its website), which was three times more sales than the entire country of USA achieved on Black Friday.

Reportedly, almost the entire valuation of Yahoo is based on the value of the shares it holds in Alibaba.com.

More such amazing facts are available from this report on Business Insider. As per The Economist, analysts predict that the Alibaba IPO will value the company somewhere between $55 billion and more than $120 billion.

That would make it the most valuable 5-STAR Business Network on earth – with transactions reportedly surpassing $1 Trillion a year soon.

Lately, Alibaba has partnered with US company ShopRunner to bring American goods to China. It has also been active in “shopping” for lucrative relationships with retailers, buying shares instead of acquiring the whole business.

This is obviously only the beginning of its full potential – although B2B exchanges have been in the offing for nearly 15 years now. Many are warning that as B2B exchanges mature into adulthood, they could easily start to restructure the whole global supply chains. No wonder the entire media world is going gaga over Alibaba’s prospects.

Even those who recognise the hype cannot help but wonder if the sad state of retail is somehow connected to the seemingly unstoppable Alibaba force and the trend it heralds. For example, one highly respected fellow blogger (Steven Dennis) recently stated in his blog,

As a former Sears senior executive I’ve followed the once mighty brand’s journey from mediocrity to bad to just plain sad. What a long strange trip it’s been.

When I left in late 2003 we were gaining traction in our core full-line department store business and piloting several important growth initiatives. To be fair, whether we could pull off the necessary transformation was highly questionable. But one thing is now certain. The subsequent actions taken under a decade of Eddie Lampert’s leadership have assured the retailer’s demise.

So, what will happen to the retailers, the shopping malls, the brands and the dealers? Will Alibaba, and its Chinese direct suppliers kill all these? Not so fast! While e-commerce is changing the face of corporate America, there are many reasons Alibaba will not be as successful as projected by the alarmists.

Firstly, there is another company to think about – a home-grown version of it. A yet unknown part of Amazon is AmazonSupply.

Predictive shipping and unmanned drones are made more prominent in the news agenda.

Meanwhile, Amazon’s “unsexy” B2B business, a “$8 trillion bet”, has been growing silently in the background, perhaps making it eight times bigger than Alibaba and the biggest 5-STAR Business Network on earth.

will-alibaba-amazonAmazonSupply, a wholesale and distribution hub, started in 2005 and has grown to carry 2.2 million products, ranging from office equipment to industrial components, materials and more.

After nearly 15 years of languishing on the wayside, the B2B exchanges are finally coming true, slowly. Already, wholesalers are whispering about the threats from AmazonSupply; although many specialty wholesalers and distributors are somewhat confident that their turf is safe from the giant’s claws due to their highly segmented market.

Nonetheless, nobody knows what will happen in future.

AmazonSupply, Alibaba, or B2B exchanges, could become so powerful that they will suck small players into their enormous vacuum of suppliers. The process can even accelerate if trust keeping mechanisms are built into B2B exchanges. Seller and buyer ratings, as well as seller/buyer protection seen on sites such as eBay and PayPal are not enough to cover the sheer size of B2B transactions.

Even the current rating system on Alibaba will not suffice, should this attractive market grow in the years to come.

The current trust keeping mechanism in international trade is Letter of Credits, which has been around for hundreds of years.

It is defined by Investopedia as: “A letter from a bank guaranteeing that a buyer’s payment to a seller will be received on time and for the correct amount. In the event that the buyer is unable to make payment on the purchase, the bank will be required to cover the full or remaining amount of the purchase.”

To keep up with the pace of change, new supply chain finance mechanisms must evolve, something that can deal with the increasingly globalised supply chains. Only with sustained focus on supply chain finance, can B2B exchanges morph into true 5-STAR Business Networks.

While traditional sources of supply chain finance have a vested interest in keeping the status quo, new supply chain finance mechanisms have been slow to emerge and remain an opportunity for the likes of Amazon, PayPal and Alibaba. If they crack that nut, the rest is open slather.

Once these mechanisms break through, the face of global supply chains and global commerce will change for good.

What Businesses Can Gain from the Transformation of Brazilian Soccer – Part 4/4

What Businesses Can Gain from the Transformation of Brazilian Soccer - Part 4/4This is the concluding entry in this series of blogs – where I reminisced about my experiences from learning to play hockey in India, and watching Brazilian soccer transformation over the past several decades.

In the first blog in this series I wrote about the Brazilian soccer teams’ transformation from an individualistic style of play to a network style game. In early 90s, more than two decades since the last World Cup championship title and Brazil faced an interesting juxtaposition – continue with what led to past success of PELE and his peers, or move on with the new rules of the game.

The new rules were clear – minimise the individual wizardry of foot play, dribbling and nimble dexterous touches, and replace these with the power-play of networks of players moving in formations to conquer the opponents by outwitting them, by outsmarting them, and by outnetworking them using a better method.

In the in the same series, I contrasted Brazilian success with transformation with the failure of Indian hockey to transform itself. Under somewhat similar conditions, the selectors, the coaches, the trainers and the players – all struggled to re-produce their stellar success of decades past. Unable to do so, the blame game started and all parties now blame all other parties for the failure.

Lessons from soccer (and hockey)

What Businesses Can Gain from the Transformation of Brazilian Soccer - Part 4/4The parallel between these sport stories and business is profound: what happened with these two games, has also now happened in today’s business world. A company can no longer afford to play the game of business on its own, like a wizard. In fact I just wrote a blog on this topic entitled A Company Is Known By the Company it Keeps.”

Today, a network of companies comes together, and pass the information and material to each other at various points, which creates the wizardry and allows them to outsmart their competitors in today’s market place. Every company does this – but only those which are most skilful at it win.

Only a handful of companies have fully realised the new rules of the game; and there are no more than 10 people on the planet who can help CEOs achieve this type of business model transformation. Why? Because business model transformation of this type is not easy. In fact it is much more difficult than changing the game plan in soccer and hockey in the example given above. To fully grasp the magnitude of the task you can read this article, and see if you agree that no more than 10 people on the planet can achieve this type of positive transformation.

So what are the lessons from Brazil’s success and India’s failure to transform the model of game?

Some of the lessons I drew are covered in the previous blog here. In brief, here are the headlines:

Understand the change in environment Commit to change

Change the stories and legends

To continue the series here are the rest of the pointers:
Separate the man from his method
What Businesses Can Gain from the Transformation of Brazilian Soccer - Part 4/4Following from the story of China above, the next message to deliver is: no matter how much a man was honoured for a method that worked well in the past, the point is to focus on what works now. Mao Zedong is undoubtedly a much revered figure in China. If you look at the country’s currency note, you will see him. Nonetheless, people also know only too well that his collectivism-driven policies no longer apply to nation’s growth patterns.

Similarly, Pelé is still widely regarded as one of the best players in the world of all time. His signature style, moves and soccer philosophy are still looked up to by generations of soccer fans around the globe. Yet, as much as Brazilian players want to emulate Pelé’s legacy, it has been proven that his method is not working anymore.

Likewise in business, a prominent figure may have laid an important foundation in the past, it will not be wise to stick to the person’s ideology when it no longer applies in today’s situation. Change can only start when people make a distinction between honouring a man and critically review his method for improvement.

Revisit the training

What Businesses Can Gain from the Transformation of Brazilian Soccer - Part 4/4I am one of those who used to play hockey as a junior and it pains me to see all that remains of Indian hockey is the “could-have-been” scenario. I have never learned to play hockey on Astroturf, I have never learned to play hockey as a formation within a team which moves in a very fast and agile manner, passing a ball to each other to outwit the competing team as a network of players.

If Indian hockey wants to make that change, they will have to start from the root: teaching the children who are just getting into the game using the new model, bringing in coaches from overseas who are experienced in applying this model. It is the only way they can catch up to whatever the state of the art in modern hockey is and truly reinstate it as a national sport. The same thing applies to soccer in many South American teams like Uruguay or Colombia, or even Mexico.

So if your business wishes to attempt a transformation, all those new employee orientation documents and on-boarding procedures need to change. For existing employees, periodical training also needs to be modified. In a way, teaching existing people new things is even harder than training new people.

Change the selection/promotion

What Businesses Can Gain from the Transformation of Brazilian Soccer - Part 4/4Closely related to the training of players is how they are selected in the first place. Brazilian coaches essentially needed to look for stronger players who could play as a team, even if that meant overlooking individuals with brilliant dribbling techniques. That does not mean individual sparks or talents would not be given the opportunity, but they may need to adapt if they want to be selected.In the past, soccer players such as Pelé, rose to fame for their admirable individualistic and improvisational style. Nowadays, the most celebrated ones are probably those who know how to play in formations, spearhead a network of strategic players while still retaining some individual brilliance.

For a business transformation, it is vital to bring on board those who not only are experts in their own fields, but also, and more importantly, effective team players. Part of the issue in the corporate world nowadays is caused by the silo mentality. Thus, it makes no sense to take on employees who perpetuate this unhealthy schema.

The selection criteria may need to change to accommodate business transformation, whether for the present or future one. In particular, more focus should be given to one’s ability to coordinate with other departments, and other companies, in a pro-active manner. Perhaps, the awareness of how one’s work affects others helps, as well as the willingness to cooperate towards the same goal.

As an example, which is also mentioned at the beginning of my book The 5-Star Business Network, a CFO finds himself struggling to understand why he has been repeatedly overlooked for promotion. While he is a prime figure in the company who had worked his way up from a junior position in the finance department. No one could doubt his high calibre and depth of experience. Yet he just lacks that one quality the Board has been looking for – the ability to weave teams of internal and external experts into a cohesive whole. In other words, he still needs to work on how to get people to play in formations as in soccer, and understand the beauty of networks.

Create the right rewards and incentives

What Businesses Can Gain from the Transformation of Brazilian Soccer - Part 4/4People are inherently motivated by rewards. In Skinner’s famous theories of operant conditioning, an association is made between a behaviour and a consequence for that behaviour, i.e. rewards or punishment. If we apply the concept here, to get the desired actions of change, there should be links to appropriate incentives.

In soccer, for instance, instead of giving all the attention to individual brilliance, coaches, soccer associations and most of all, fans, should praise team efforts. Individuals who are good team players should also receive credit. Apart from verbal reinforcement, financial rewards or advancement opportunities act as good incentives.

Likewise, in business, a range of incentives for desired behaviour must be used. From a pat on the shoulder by the manager, to being named “Employee of the month/quarter/year”, getting a pay rise, being put on an important committee, and being promoted, you can be creative with choosing rewards for different levels of actions too.

Train, train, train in the new method

There will be many instances of conflict during a transformation – whether a conflict of interest, a conflict of generation or a conflict of perception. Change by its very nature is painful. Who can be sure that a brilliant soccer player who has been used to dribbling on his own will drop his ego and play as a team? Who can be sure that tomorrow Indian hockey players will not give up on the new Astroturf surface which requires so much more sweat and stamina to stay on?

There will be resistance, and calls to resist. But it is vital to resist such resistance and resolve conflicts as they appear. Every time you revert back to old way of functioning, all you are doing is prolonging the time it will take you to move on to the new one.

Proximate improvement

What Businesses Can Gain from the Transformation of Brazilian Soccer - Part 4/4When it is hard to swallow a big chunk of meat in one go, what do you do? Of course, the answer is to slice it into smaller pieces. If the transformation project seems too tall an order, and everyone seems to dread a disruption ahead, then proximate improvement should be applied.

The idea is to divide the journey towards transformation into small, achievable milestones. Once a proximate achievement is reached, then comes the next one until we have the desired outcome. For example, before being able to dominate the new hockey landscape, Indian hockey players need to firstly get used to running on Astroturf surfaces. This first milestone could be determined by achieving a certain amount of physical training to build stamina. Afterwards, they need to get used to controlling the ball with some more hours of practice. Then, the next proximate achievement is when players have learned how to play in formations on the new surface. The list goes on.

Applying it to your business, improvements can be achieved on a department-by-department basis, or process-by-process, service-by-service, depending on your company’s appetite for change.

Find the right people to help you

craft-strategy-img2Even when you may have all the other ingredients, not having the right people to help you build that transformation bridge can leave you stuck with the old model. As long as the old model is the status quo, everybody in the system is inclined to walk within the boundaries. Disruptive thinking, therefore, tends to come from outside.

Experts who know and have experience of creating the new model are needed. These people also need to do the hard part, which is standing up, challenging the old way and guiding people to the new way.

Even harder than teaching a child something new, this involves making people un-learn something they have incorporated into their lives for so long. Hence, it is absolutely vital to correct people every time they fall back to the old habits. For example, every time a player starts dribbling a ball with hockey stick, he has to be pulled back and taught to play in a strategic formation. Undoubtedly, individual brilliance is still widely appreciated but without good team efforts, no single player can turn the tide. That is not to say there is no room for creativity in the new model.

As you can see, getting the right coach for a sport team or the people for a business transformation is paramount. There may not be more than 10 people on earth in today’s business world who truly understand the new business model and know how to apply it to yours. You have to get one of those 10 people and get them to work very closely with you.

Another important thing is to support them every time a conflict between the old and new model arises. These conflicts, whether of perceptions, of generations or of interests, may not be seen by insiders themselves. Therefore, someone from the outside looking in and then getting in to help resolve conflicts is a crucial element.

Just like when climbing Mount Everest, having a guide, or a Sherpa, increases your success rate by 1.5 times, the right corporate Sherpa can increase your success rate significantly. Would you risk getting lost, being hampered by heavy loads, having insufficient equipment or even falling off the edge, while there is a helping hand offered?

Now that we have all the ingredients, and steps, does that mean anyone who applies these will succeed. The obvious answer is no. Because, in the end, it still depends on how well you execute the transformation.

To get more – go to www.5starbusinessnetwork.com

If you would like to read the full article in PDF format, please click Hockey-and-Soccer-5.

What Businesses Can Gain from the Transformation of Brazilian Soccer – Part 3/4

What Businesses Can Gain from the Transformation of Brazilian Soccer - Part 3In the first blog in this series I wrote about the Brazilian soccer teams’ transformation from an individualistic style of play to a network style game. In early 90s, more than two decades since the last World Cup championship title and Brazil faced an interesting juxtaposition – continue with what led to past success of PELE and his peers, or move on with the new rules of the game.

The new rules were clear – minimise the individual wizardry of foot play, dribbling and nimble dexterous touches, and replace these with the power-play of networks of players moving in formations to conquer the opponents by outwitting them, by outsmarting them, and by outnetworking them using a better method.

In the same series, I contrasted Brazilian success with transformation with the failure of Indian hockey to transform itself. Under somewhat similar conditions, the selectors, the coaches, the trainers and the players – all struggled to re-produce their stellar success of decades past. Unable to do so, the blame game started and all parties now blame all other parties for the failure.

Lessons from soccer (and hockey)

The parallel between these sport stories and business is profound: what happened with these two games, has also now happened in today’s business world. A company can no longer afford to play the game of business on its own, like a wizard. In fact I just wrote a blog on this topic entitled “A Company Is Known By the Company it Keeps.”

Today, a network of companies comes together, and pass the information and material to each other at various points, which creates the wizardry and allows them to outsmart their competitors in today’s market place. Every company does this – but only those which are most skilful at it win.

Only a handful of companies have fully realised the new rules of the game; and there are no more than 10 people on the planet who can help CEOs achieve this type of business model transformation. Why? Because business model transformation of this type is not easy. In fact it is much more difficult than changing the game plan in soccer and hockey in the example given above. To fully grasp the magnitude of the task you can read this article, and see if you agree that no more than 10 people on the planet can achieve this type of positive transformation.

So what are the lessons from Brazil’s success and India’s failure to transform the model of game?

Understand changes in the environment

The first lesson is that you need to pick up the currents of change on your horizon. Lots of companies do not maintain a strategic perspective to be able to detect the change of business model early enough, while the change is taking place. Sometimes they do not notice the change even after the business model has totally transformed.

For instance, India did not notice the full extent of change that had happened within the world of hockey. There are still teams in South America which have individual soccer wizards but simply fail to stand the onslaught of European winning machines who play like a network passing the ball to each other.

Moreover, businesses also need to notice the change well in time, to be able to do something positive about it. Lots of companies, people, and administrators notice the change when it is too late to do anything about it. Indian hockey is a prime example. By now it is well and truly registered in every Indian hockey player psyche why we have lost out on the global hockey front.

Commit to change

What Businesses Can Gain from the Transformation of Brazilian Soccer - Part 3Indian hockey may from time to time, blame the lack of resources for their slide in international ranking. Putting the blame’s justifiability aside, the point remains that you must make sure you have all the necessary resources and commitment for the big move. Otherwise, not having enough resources, or thinking you do not need too much resources, will leave you in a state not much happier than the Indian hockey team today.

Apart from financial resources, you also need mental resources or the willpower to make that leap from the old mode of working to the new one. Coach Parreira more or less had to change people’s perception of success when he geared the Brazilian soccer team up for the 1994 World Cup. Memories of decades of street soccer and individualistic style needed to go. The same for India’s hockey story. Yet only Brazil succeeded. Why? Because they committed 100% to changing the status quo.

In other words, you need to stick to the transformation path till the end. There will be times when you will be tempted to revert, or take shortcuts because it is always easier to do things that come habitually. But it cannot be emphasized enough that you have to keep sticking to it till the new model becomes the way of doing things, till the new way of playing soccer is the only way you play soccer.

Update the stories or legends

What Businesses Can Gain from the Transformation of Brazilian Soccer - Part 3Legends and stories, of who you revere and why, are very powerful way of communicating what is important. People are naturally wired to retell the legends, and to try and live up to them. They become the norm, or what is considered acceptable by the majority. The norm is driven or constructed by extraordinary people with inspiring stories over time.

Therefore, to encourage a change in habitual thinking that facilitates transformation, the stories or legends need to be changed in people’s mind. A historical example comes to mind is China’s socio-economic transformation led by Deng Xiaoping in the 80s.

Back then, Deng’s task was to change the stories that had been so ingrained in people’s minds during the years of China’s previous leader – Mao Zedong. After proclaiming the founding of the People’s Republic of China (PRC) in 1949, Mao and other Communist leaders wanted to rebuild the country in the direction of the communism of which Marx had spoken, but at a faster rate and with a different flavor compared with the Soviet Union. Mao actively encouraged an abolition of differences between rich and poor, and divisions in labour.

The “Great Leap Forward” was a policy with which Mao hoped would inspire everyone to become an economic and managerial expert. Despite unsatisfactory outcomes, the policy succeeded in telling stories of collectivism and the importance of sharing resources. People’s communes were the next level of collective farms, where there was not only mass mobilisation of labour but also of living rituals.

Then came the Cultural Revolution as Mao attempted to re-assert his authority. At the time, Deng was still regarded by many as a “capitalist roader.” To make it more difficult, there were protests by students in Beijing who upheld Maoist idealisms, denouncing “revisionists and capitalist roaders” in favour of rights for the poor.

When Deng became the de facto leader of China’s Communist Party, he started changing the psyche of people by using a different set of vocabulary. “It matters not whether the cat is black or white, as long as it catches mice,” this is his famous saying which encapsulates Deng’s approach very well. What this essentially means is that practicality should come first and at that time, the language of revolution really diverted from that during Mao’s time.

Stories abounded about how glorious it was to get rich. From pouring resources into a common hub, both collective farmers and individual growers were inspired to make as much profit as they could and to invest in any kind of local business. In fact, one success story

Deng Xiaoping

Deng Xiaoping (Photo credit: Wikipedia)

would inspire another one, and so on until China saw incomes increased significantly, stimulating industrial production along the way. Farmers were more or less their own masters and investors, they were able to purchase their own machinery and fertiliser. Meanwhile, in rural towns and in cities, “sidewalk entrepreneurs” started to appear. Everyone was pursuing their own wealth creation journey, regardless of what colour the collar was.

To sum up, what businesses nowadays can learn from this is: to propel change, create, or change the tales of success that show the benefits of your desired transformation.

—to be continued in a concluding blog.

Australia leads the way to Globalisation with triple FTA with Asia’s big three

AustraliaAustralia leads the way to Globalisation with triple FTA with Asia’s big three is talking with ministers from Japan, Korea and China to finalise Free Trade Agreements with the trio ahead of Tony Abbott‘s visit to Asia in April.

On Wednesday, Japan’s Farm Minister Yoshimasa Hayashi and Australia’s Trade and Investment Minister Andrew Robb failed to reach a consensus on tariff elimination. However, they confirmed negotiations would still be underway to obtain a win-win agreement after 7 years.

Specifically, Australia wants Japan to cut the current beef tariffs to 19% while Japan is only willing to go for around 30%. On the other hand, the Asian country wants Australia to slash its 5% auto tariff straight away.

If the deal goes through, Australia will become the first major farm exporting country to finalise a FTA with Japan, who has been the biggest importer of Australia’s beef.

The Australian beef industry is also awaiting the outcome of talks with Korea over the Korea-Australia free trade agreement (KAFTA), which is under ratification.

On Thursday, the upper house referred KAFTA to a Senate inquiry to get “the best deal Australia can get” for its producers. The country’s beef sector hopes the deal is ratified soon as the US – Australia’s major competitor in Korea’s beef market – has made faster progress regarding tariff slashing.

“There is a unique situation with Australia for both Japan and Korea, as there should be no competition in various sectors between Australia and Japan/Korea. If FTAs go through, we can expect to see synergies created from many supply networks, which will create value for everyone,” said Vivek Sood – CEO of Global Supply Chain Group.

Meanwhile, businesses are calling on Prime Minister Tony Abbott to finalise a FTA with China during his visit to country next month.

“It’s hard to overstate the importance and the strength of Australia’s relationship with China. China is now, by far, our largest trading partner. In some years, it’s our largest source of immigrants. And in most years, it’s our largest source of foreign tourists and students”, Mr Abbott said during an Asia Society Luncheon in Canberra.

The Department of Foreign Affairs and Trade says China’s trade with Australia reached $125 billion in 2012, with great opportunities for the beef and dairy industries.

However, critics point out China’s poor records in labour rights and environmental standards, which means compromising Australia’s standards for a FTA may be unethical.

Despite making no reference to China’s labour and environmental records, New Zealand signed an agreement with China back in 2008 and has greatly improved dairy and meat’s access to the Chinese market.

“In a globalized world, the quicker we can eliminate trade barriers and roadblocks, faster we can integrate Australian companies into the global 5-STAR Business Networks that run modern economies” said Vivek Sood, author of the book “The 5-STAR Business Network“. “Globalisation has been blamed by both the extreme right and extreme left for a host of economic ills facing various nations. Having seen the effects of globalisation at close quarters in more than 100 countries, I cannot disagree more. In my view the results attributed to globalisation are more attributable to other factors such as human malfeasance, institutionalized corruption even in the highest places, laziness, a sense of entitlement to riches without working for them and herd mentality leading to action without thinking and many such factors – all a small part of basic human nature.”

EBay and Amazon beware, Alibaba’s coming IPO means time to protect home turf

Australia leads the way to Globalisation with triple FTA with Asia’s big threeThe world’s biggest e-commerce company is set to go public in the world’s biggest retail market, the latter is true at least for now. Alibaba announced its decision to “commence the process of an initial public offering in the United States” on Sunday.

After last year’s failed attempt to persuade Hong Kong, Alibaba turned to the US for what set to be the biggest IPO since Facebook’s 2012 feat.

The Chinese giant will work with Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley and Citigroup Inc. in finalising the IPO, which could launch as early as April.

“Alibaba has evolved from a company selling two dozen items back in 1999 to a truly 5-star business network, with a transaction volume bigger than Amazon and eBay combined in 2012.

The essence of Alibaba’s success lies in its super network, connecting millions of consumers, retailers and suppliers. Its value addition strategy has moved beyond synergy and into something known as value synchronicity”, said Vivek Sood – CEO of Global Supply Chain Group.

Analysts expect the e-commerce giant to raise around US$15 billion, making it the top 4 biggest IPOs ever behind Visa, General Motors and Facebook.

The company also signaled its intention to list in China. “Should circumstances permit in the future, we will be constructive toward extending our public status in the China capital market in order to share our growth with the people of China”, Alibaba said in a statement.

Worth as much as US$200 billion, behind Google in the Internet field, Alibaba boasts annual profits five times those of Amazon last year after increasing its revenue by 61% and gross profits by 71%.

Serving more than six million retailers and 300 million consumers worldwide, Alibaba’s empire extends beyond its well-known e-retail operations on Taobao and Tmall sites.

The company also has its affiliate payment system Alipay, comparable to EBay’s PayPal, as well as financial services, logistics, mobile phone operating systems and TV set top boxes.

“China will soon become the world’s biggest retail market and Alibaba’s US IPO will lay a crucial springboard to gain a bigger share of the pie in China, which is currently 5%.

Amazon, whilst still upheld as a prime example of a 5-star business network, should level up or risk being outwitted in the game,” said Sood – the author of widely acclaimed book “The 5-Star Business Network”.

Sheer number of consumers, and their increasing purchasing power provides the fuel to Alibaba machine. Combine these numbers with the fact that in most cases Alibaba is not replacing a traditional business model, but rather creating blue ocean new business models and you can see the immense potential of the company. Now combine that with the access to the producers and understanding of production economics and you can truly see a challenging behemoth emerging.

It remains to be seen whether Amazon’s consumer understanding will trounce the above advantages that Alibaba enjoys.

As China’s economic slowdown surprises analysts, what more can its companies do to spur growth?

China’s economic slowdown has surprised analysts this week, with a number of key performance figures failing to reach predicted levels. Annual growth dropped to 7.7% for the January to March 2013 quarter, from 7.9% in the previous quarter. Industrial output rose only 8.9%, against analysts’ predictions of 10%, and fixed asset investment rose at an annual rate of only 20.9%, while it had been expected to achieve over 21%.

So what can Chinese companies do to spur their country’s economic growth and what lessons can the international business community learn in the process? International businessman Vivek Sood’s new book, The 5 Star Business Network, holds the key to unlocking each company’s true potential through the development of its 5 star business network. From small, local companies to global corporations competing on the world stage, the lessons provided in The 5 Star Business Network promote efficiency, growth and scalability for every business. Mr Sood explains,

“Having worked across several continents and in a wide range of industries, I have been fortunate to learn first-hand some of the most important lessons that businesses need to know. The development of 5 star business networks is such a key factor in running a successful company, yet one that many businesses often overlook or approach in the wrong way. I am thrilled to finally be able to reach out to all companies, no matter their location, and provide them with the resource they need in order to become more efficient, generate increased revenue and drive forward their success.”

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