Alibaba Case Study Essay

1.Lock-in effect is the phenomenon whereby technologies remain controlling as a result of large sunk investment costs, favorable technologies, and widespread usage. Since Alibaba.com is the first portal market mover in chinaware, it testament be difficult to create another portal market which is estimable as successful as Alibaba.com. The lock-in effect causes people to have option for Alibaba.com than any other portal market because they have already conventional their brand.Some customers also develop loyalty while other select brands that are familiar to them. It was also mentioned that many of Alibaba.coms registered members are sharp with the results they obtain, as indicated by the annual membership renewal rate, which exceeds 70%. This honourable further proves that it will be very difficult for a plump for mover or a new portal market to get over with Alibaba.com since they provide excellent service to their customers.2.Alibaba.com charges foreign sellers an annua l fee of close $400 for a TrustPass membership because he sees that global companies focus in doing line of descent 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 fee of $400 for a TrustPass membership.However, SMBs in China pay $8000 as their annual membership fee because by existence members of Alibaba.com, these SMB save a handful amount of money by universe registered to Alibaba.com, they no longer need spend extensive money to operate 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 require Alibaba.com. However, it is Alibaba.com that needs the foreign companies in order to work with SMBs that are move to do business internationally.