The W-theory of Five Elements for Innovative Business Activities with a Case Study of Alibaba Corporation

Innovation has always driven the progress of modern society (Schumpeter 1912), and in the W-theory of the five elements used in traditional Chinese medicine, the first-stage element is Wood, which represents innovation. In the W-theory of five elements for innovative business activities, the flow of elements in a cycle is Wood (Innovation) Æ Fire (Resource) Æ Earth (Strategy) Æ Metal (Competition) Æ Aqua (Allocation). As the previous element phase generates the next element phase in the flow, these five cycles constitute an endless dynamic system that can be used to model the operation and management of a business and find the maximum profits of an enterprise. This study thus uses the five elements theory to review the development of Alibaba Corporation, concluding that Chinese enterprises have been developing into the stage of business model innovation.