Doctor Strategy Face to Face

It had already been a few weeks into our AGLA program and we were all geared up to listen to Prof Zeng. Prof Zeng has been the chief strategy officer of Alibaba Group since January 2008. He joined the company in August 2006 as executive vice president of strategy, and served as acting president of China Yahoo! from November 2006 to December 2007. Prior to that, he spent most of his time in academics engaging with students from all across the globe. He was in fact the perfect person for the curious bunch of AGLAs to be with in-order to find answers to the burning questions we had with regards to Alibaba’s strategy for International expansion. Prof Zeng got right into it by asking us to view Alibaba from two angles so as to get a better understanding of the Business. First angle being the market place wherein Alibaba served as the largest avenue for buyers and sellers to transact and interact. The second, as a platform referring to the technology stack and resources that support the seamless interactions on the market place. Once we were able to do so then it was all about mapping out the broader ecosystem.

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With the internal goal of reaching out to 2 billion consumers and 20 million merchants a suitable avenue to target aggressively would be the rural Taobao which in its current capacity serves only one fifth of the China market. It’s in line with this vision that Alibaba group continues to engage with strategic partners across India and SEA. Jack Ma throws his weight behind the proposed EWTP (Electronic World Trade Platform) in order to facilitate easy trade across the Globe with this aim of reaching out to consumers and merchants.

Prof Zeng went on to outline the vision for the future: “Data”. Every Business in Alibaba needs to be data powered. Alibaba has embarked on several ventures with regards to the same, notable ones are the new AI platform (PAI), which is the new component created within the Ali Cloud: this is an open platform setup for Businesses to leverage the power of Data. The bigger goal is to become the number one data sharing platform of the 21st century. There is a lot of buzz around IOT and Alibaba is at the forefront of the same by continued support and nurturing of Yun OS. Yet again, Prof Zeng was candid enough to admit that the killer application with regards to IOT was yet to happen and thus the IOT venture falls under one of the strategic bets by the Alibaba group. With regards to the sampling data for analytics, a challenge facing the group is the absence or rarity of social data, ie user behavior from a social perspective. As of now, more data comes from the browsing patterns of users on the e-commerce platform. The weakness/ opportunity to improve is to get hold of the data from user preferences on existing social networking platforms.

The Alibaba journey has not been devoid of difficult decisions and failures. Breaking up Tabao into Tabao & TMall was a classic example of a difficult decision. Breaking up the platforms was imperative in order to get the Chinese user base access to Brands world-wide. Once broken down it was important to ensure that the platforms would not compete with each other. An example of a failure along the way was the creation and subsequent demise of Alisoft. Alisoft, founded by the then CTO was started internally in 2007 with the dream of building an intelligent CRM system with the potential of turning into Salesforce of China. Things didn’t work according to plan and we lost the CTO on the way. But immediately after that Alicloud was launched, so it was a great learning.

The ever inquisitive cohort had a lot many questions ranging from “How Alibaba is able to maintain its course and work closely aligned with its overarching strategy?” to the “Most expensive mistakes from a strategy planning perspective?” Prof Zeng showcased the teacher in him by listening patiently to the questions and providing candid answers that would make the cohort learn and think from different perspectives. Some of the interesting thoughts he shared were that Alibaba had the same people especially in the leadership team for a very long time. Throughout the course of time, there has been very minimal changes at the leadership team, which in turn ensured that the vision and strategy was being carried out successfully. Mission plays a lot in order to energize the employees and drive them forward. Debates go into a point of cut throat fighting at Strategy level. However, the important takeaway is that Strategy decisions are something that needs to be PROVEN rather than Challenged. At Alibaba, the struggle is to achieve the dream target rather than working for the KPI. Alibaba allows the teams to work on their ideas and eventually gives every BU an opportunity to try out something different as the whole process would turn out to be an enriching experience. As a part of wrapping up the discussion, Prof Zeng requested each of us to make sure that we track our progress time to time so as to check if we are aligned with the Strategy as time progresses. An anecdote he shared with us regarding the same was that he laid out the Strategy plan drawn out 10 years ago at the latest means so as to make a point that at Ali, we stick to our goals!

Joe is an adventure enthusiast who loves to try out new things. He is open to varied experiences and enjoys learning from different cultures. He dreams about a world in which technology would empowers human beings and eliminate inequity!

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