Is it better for Alibaba to focus on improving existing services or developing new product categories?

Introduction

The trade-off question at hand is whether Alibaba should focus on improving existing services or developing new product categories. This scenario involves balancing the optimization of current offerings against the potential for growth and diversification through new ventures. My response will analyze this trade-off through multiple lenses, considering business impact, user needs, and strategic implications.

Step 1

Clarifying Questions (3 minutes)

• Based on Alibaba's market position, I'm thinking about the competitive landscape. Could you provide insights into our current market share and the performance of our main competitors?

Why it matters: Helps assess the urgency of innovation vs. optimization Expected answer: Strong market position but facing increased competition Impact on approach: Would influence the balance between improving existing services and exploring new categories

• Considering our financial goals, I'm curious about our revenue growth targets. Can you share our year-over-year growth expectations and how they compare to previous years?

Why it matters: Aligns strategy with financial objectives Expected answer: Ambitious growth targets requiring both optimization and expansion Impact on approach: Would help determine the resource allocation between existing and new products

• Looking at user behavior, I'm wondering about customer retention rates across our major product categories. Do we have data on user churn and lifetime value for our key services?

Why it matters: Indicates the health of existing products and potential need for new offerings Expected answer: Varied retention rates across categories with some showing signs of maturity Impact on approach: Would guide decisions on which existing services to prioritize and where new categories might be needed

• Regarding our technical capabilities, I'm curious about our current infrastructure scalability. How well-positioned are we to support rapid growth in new product categories without compromising existing services?

Why it matters: Assesses our ability to execute on new initiatives while maintaining quality Expected answer: Robust infrastructure with some areas needing upgrades Impact on approach: Would influence the pace and scope of new product development

• Considering our talent pool, I'm interested in our current team composition. Do we have the necessary expertise in-house to develop new product categories, or would we need to hire or acquire?

Why it matters: Determines our readiness to expand into new areas Expected answer: Strong core team with gaps in emerging technologies Impact on approach: Would affect the timeline and feasibility of entering new product categories