Alibaba Case Study Essay

1.Lock-in effect is the phenomenon whereby technologies remain dominant as a result of prominent sunk investment costs, complimentary technologies, and widespread usage. Since Alibaba.com is the start portal market mover in China, it depart be nasty to create an other portal market which is just as self-made as Alibaba.com. The lock-in effect causes people to have preference for Alibaba.com than any other portal market because they have already established their brand.Some customers alike develop loyalty while other prefer brands that are long-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 annual membership renewal rate, which exceeds 70%. This just further proves that it will be very difficult for a second mover or a new portal market to compete with Alibaba.com since they provide minute service to their customers.2.Alibaba.com charges foreign sellers an annual requital of abou t $400 for a TrustPass membership because he sees that global companies focus in doing strain with large companies. In order 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 slant of $400 for a TrustPass membership.However, SMBs in China pay $8000 as their annual membership fee because by being members of Alibaba.com, these SMB save a handful amount of money by being registered to Alibaba.com, they no prolonged need spend extensive money to travel and meet 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 needs Alibaba.com. However, it is Alibaba.com that needs the foreign companies in order to work with SMBs that are pursuing to do business internationally.