Alibaba Case Study Essay

1.Lock-in effect is the phenomenon whereby technologies remain dominant as a extend of large sunk investment costs, praising technologies, and widespread usage. Since Alibaba.com is the first admittance grocery mover in China, it will be difficult to create another entre market which is just as self-made as Alibaba.com. The lock-in effect causes people to slang preference for Alibaba.com than any other portal market because they have already open up their brand.Some customers also develop every(prenominal)egiance while other prefer brands that are familiar to them. It was also mentioned that many of Alibaba.coms registered members are happy with the results they obtain, as indicated by the yearly membership re newbornal rate, which exceeds 70%. This just further proves that it will be very difficult for a instant mover or a new portal market to compete with Alibaba.com since they bequeath excellent service to their customers.2.Alibaba.com charges foreign sellers an yearl y fee of about $400 for a TrustPass membership because he sees that global companies heighten in doing descent with large companies. In raise for global companies to do business with SMBs in China and all over the world, Alibaba.com created an affordable deal which is the annual fee of $400 for a TrustPass membership.However, SMBs in China pay $8000 as their annual membership fee because by organism members of Alibaba.com, these SMB save a handful amount of money by being registered to Alibaba.com, they no longer need pass extensive money to travel and equal with suppliers. This fee is also charged because Alibaba.com translates and lists their information. In summary, Jack Ma charges SMBs a higher price because companies like these inevitably Alibaba.com. However, it is Alibaba.com that needs the foreign companies in order to work with SMBs that are prosecute to do business internationally.