Business / Technology

Rash diversification could undermine Alibaba

By Mike Bastin (China Daily) Updated: 2014-08-19 10:58

Those that do make the transition manage to combine a more mature, consensual corporate decision-making culture with their entrepreneurial origins.

It is, therefore, Tencent, with Ma Huateng's mature, corporate ladder-climbing background, and science and technology education, that would appear to hold the upper hand as the battle of the behemoths continues.

And it is for Jack Ma and the Alibaba leadership to learn from Tencent's focused, rational investment decision-making model and strategy of related diversification only.

Recent public comments from Alibaba, in response to ever more bizarre and unrelated investments, about some sort of "entertainment brand building" only serve to create concern over the company's long-term future and capability for the fierce fight with Tencent and others.

Many analysts predict that the eventual winner of the Alibaba-Tencent battle will not only go on to dominate China's large and burgeoning e-commerce industry but could also leverage this position to achieve lasting global domination.

Leadership is an essential part of corporate success, but in the long term it is leadership and leaders who possess deep industry knowledge and experience and who do not possess an unquenchable desire for personal publicity who are far more likely to guide their companies to sustainable, global success.

Jack Ma, take note.

The author is a visiting professor at the University of International Business and Economics in Beijing and a senior lecturer on marketing at Southampton Solent University's School of Business. The views do not necessarily reflect those of China Daily.

 

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