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ALIBABA’S ALITRIP: CREATING TRAVEL INNOVATION FOR COMPETITIVE ADVANTAGES

Reference No. 16/009C Publication Year 2016
Author(s) Amy Yip, Minyi Huang
Company Alitrip
Industry Software and Services
Geographic setting China
Functional Area Strategy & General Management; Management of Information Systems; Marketing

Synopsis

In October 2014, Alibaba Group founded Alitrip by integrating all travel-related businesses previously dispersed among Alibaba’s many marketplaces. Alitrip provides a platform on which travel businesses of all sizes can set up online storefronts. This allows them to access the same resources, including Alipay payment options and a huge user base, as online merchants in the better-established marketplaces, such as Taobao and Tmall, within the Alibaba Group.

Attracted by the fast-growing online tourism industry in China, Alibaba wants to develop Alitrip into a leading online travel marketplace. The travel industry, however, is crowded and competitive. Well-established online companies in China include Ctrip, the largest online travel agent, Qunar, the largest online travel search engine and eLong, an online accommodations-booking specialist, among others. To gain competitive advantage, Alitrip has introduced a series of innovative travel services. 

Learning Objectives

This case provides students an opportunity to understand and evaluate a company’s competitive strategies and learn to how to evaluate competitive advantage creatively.

- Students can learn how to conduct an industry analysis.

- Students can learn how to analyze and evaluate a company’s competitive advantages.

- Students can learn how to make recommendations on company strategies in a systematic yet creative way.

- Students can learn how to create a successful platform strategy.

 

Suggested Questions:

1. Come to an understanding of the competitive landscape of the online tourism industry in China. Who are the Altrip’s key competitors? What are they offering? Who are the travel-service providers? Are they powerful? Who are the customers? Are they powerful? Are there many alternative products?  How easily can a new company enter the market? What are the motivations behind Alibaba’s investment in Alitrip?

2. Come to an understanding of Alitrip’s core competencies. What are Alitrip’s core resources and capabilities? How do they help Alitrip create a competitive edge?

3. Critically evaluate Alitrip’s business strategies and suggest how it can create and sustain its competitive advantages in the long run.