Alibaba Group: Acquiring Lazada to Win The Southeast Asia E-Commerce Battle
(9 pages of text)
Case (Pub Mat)
In April 2016, Alibaba Group Holding Limited (Alibaba) acquired the cash-strapped German e-commerce company Lazada Group (Lazada) to enter the Southeast Asian market and gain an additional source of revenue. Lazada’s value proposition of an effortless shopping experience, combined with rising competition, had caused Lazada to over-invest in logistics infrastructure. The cash injection from Alibaba’s acquisition would allow Lazada to continue to pursue its strategic imperatives while leveraging Alibaba’s online experience and other resources in China. Given the competitive environment in China, was the entry into Southeast Asia through the acquisition of Lazada an appropriate strategy for Alibaba? Had Lazada made the appropriate decision to sell its company to Alibaba? How should Alibaba implement its post-merger integration in 2017?
The case is intended for senior undergraduate- and graduate-level business school students in courses on competitive strategies of emerging-market multinational enterprises, international market-entry strategies, mergers and acquisitions, management of technological innovation, Internet marketing, and platform strategy. After completing this case, students will be able to do the following:
- Describe the entry strategy that a company from an emerging market uses to enter another emerging market in a high-tech industry.
- Evaluate the competitive environment within an industry; the macro environment of the home and host markets; and the resources, capabilities, and motivations of the entrant and the incumbent in order to determine an appropriate entry strategy for a company entering an emerging market.
- Explain the strategies an online platform owner can use to achieve and maintain a competitive leading position in the e-commerce platform industry.
Information, Media & Telecommunications
China; Singapore, Large, 2017
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