Strategic analysis in a global setting involves competition in industries that extend across national boundaries and among firms with different national home bases that may tap into strategic resources in more than one location. This is a brief introduction to the global expansion of Tencent Holdings.

1. Company
Profile:
Tencent
Holdings
by
Jeremy,
Irem,
Jonathan

2. Agenda
The
Facts
Company
Strategy
Future
of
Tencent
Conclusion

3. The
Facts
by
Jonathan
Loo

4. The
Basics
Founded
in
1998
China’s
largest
Internet
service
portal
Tencent
went
public
on
HKSE
on
June
2004
990
million
QQ
users

6. Mission
“...to
enhance
the
quality
of
human
life
through
Internet
services”
Vision:
“to
become
the
most
respected
Internet
enterprise”

7. Products
&
Services
Tencent
has
established
seven
main
business
lines:
IM
(Instant
Messaging)
Service
Online
Media
Wireless
Internet
Value-­‐Added
Services
Interac9ve
Entertainment
Service
Internet
Value-­‐added
Service
E-­‐commerce
and
Online
Adver9sing
Service

8. Corporate
Video
hVp://www.youtube.com/watch?v=12DIel6uLyk
(2:18)

9. Research
&
Development
More
than
50%
of
staff
are
based
in
R&D
Tencent
Research
Insctute
(Beijing,
Shanghai,
and
Shenzhen)

10. Company
Strategy
•
•
•
•
AVract
startup
founders
with
the
prospect
of
guidance
for
an
entry
into
the
China
market
Uses
investments
to
beVer
understand
the
U.S.
market
Looks
to
invest
in
companies
that
can
provide
with
technology
or
content
that
can
be
brought
to
China
through
licensing
or
partnerships
Takes
larger
stakes
of
30%
or
more
in
companies

11. Culture
Values:
integrity,
proaccve,
collaboracon,
innovacon
Management
Philosophy:
“care
for
the
development
of
employees”
The
Tencent
Human
Resource
Training
System
Tencent
Charity
Foundacon

13. Company
Strategy
by
Irem

14. One-­‐Stop
Online
Living
Tencent
has
established
seven
main
business
lines:
IM
(Instant
Messaging)
Service
Online
Media
Wireless
Internet
Value-­‐Added
Services
Interac9ve
Entertainment
Service
Internet
Value-­‐added
Service
E-­‐commerce
and
Online
Adver9sing
Service

15. Clients

16. Company
Strategy
• Gained
prominence
with
its
instant
messaging
•
•
system
called
QQ
that
targeted
Chinese
college
students
More
than
900
million
monthly
accve
users
Makes
money
by
service
fees
o virtual
products
(40%)
o charging
gaming
fees
(50%)
•
o advercsing
(less
than
10%)
Investments

17. Global
Strategy
“The
transforma.on
of
the
company
from
a
Chinese
firm
which
services
are
s.ll
accessed
through
desktop
computers
for
chat
and
games
to
an
Interna.onal
firm
providing
mobile
services”
https://www.youtube.com/watch?v=PCWEHEsJ7co

19. Dream
of
Being
The
Best
•
Rapid
growth
abroad
o WeChat
user
doubled
from
50
million
users
to
100
million
within
May
to
September
of
2013
in
the
U.S.

20. Global
Strategy
An
internaconal
version
of
its
cloud
storage
product
in
2014
offering
10TB
of
free
cloud
storage
•
•
•
•
10
cmes
more
than
1TB
being
offered
by
rival
Chinese
tech
giants
Baidu
and
Qihoo
360
7GB
available
on
Microsom’s
SkyDrive
15GB
giveaway
for
Google
Drive
5GB
of
DropBox
storage
An
English
version
of
a
new
Instagram-­‐like
image
app,
Story
Camera
(an
app
already
popular
in
China)

21. Global
&
Local
Investments
•
Invested
early
in
•
In
2011,
company
announced
$760
million
fund
for
emerging
companies
•
Made
investments
in
venture-­‐capital
firms
•
and
Acquired
Comsenz
(Pinterest
+
forum)
to
grow
online
advercsing
plaqorm
on
instant-­‐messaging
service,
QQ

22. Innovacon
Strategy
“We
are
very
focused
on
building
user
experience.”
“When
you
have
the
best
experience
users
will
stay,
and
when
users
stay
they
keep
each
other,
and
that’s
the
biggest
value
of
a
social
network.”

23. Innovacon
Strategy
Strategic
Partnership
with
-­‐
$448
Million
stake
in
Sogou
&
Sohu
“reinforces
"open,
win-­‐win"
philosophy
of
working
with
leading
teams
to
create
innova.ve
products
for
users,
and
build
a
healthy,
diversified
ecosystem
for
the
industry”
•
•
•
Sogou's
strong
innovacon
capabilices
Successful
execucon
track
record
Superior
search
experiences
to
users
on
social,
browser
and
content
plaqorms,
especially
on
the
mobile
front

24. Future
of
Tencent
by
Jeremy
Gan

25. Is
Tencent
Innovacve?
•
•
Voted
as
“World’s
Most
Innovacve
Social
Media
Company”
by
Fast
Company
o WeChat
suite
§ Aggressive
internaconal
rollout
is
“rare”
for
a
Chinese
company
Voted
#2
as
“Most
Innovacve
Gaming
Company”
by
Fast
Company
o Subject
to
intense
debate
due
to
numerous
allegacons

26. Tencent
Different
Today
•
In
the
past…
o Kin
to
Microsom
back
in
90’s
§ “Copy
&
develop”
strategy
Spot
new
technology
innovacon,
reverse
engineer,
leverage
on
its
massive
resources
and
user
base
o
ICQ
-­‐>
OICQ
-­‐>
QQ
Today…
o Rethinking
“innovacon”
§ Leveraging
core
strengths
and
relocacng
resources
• Combining
messaging
with
social
media,
gaming
plaqorm,
mobile
payment,
and
cloud
storage
o
WeChat
•
•

27. Metanaconal
Innovacon
Process
Locate innovation
team near key market
knowledge to
experience context
firsthand and transfer
knowledge on-site:● Technology
Complexity LOW
● Market
Complexity HIGH

28. Dream
of
Represencng
The
World

29. Rapid
Expansion
(Home)
•
Partnering
with
global
brands
on
internaconal
campaign
o Nike
Fescval
of
Sports
2012
o hVp://vimeo.com/48589953

30. WeChat’s
Rivals
Globally

31. Global
Advercsing
Strategy
#1

32. Global
Advercsing
Strategy
#2

33. Set
#2
(Answers)
Parineeti
Chopra
Neymar Jr.
Varun Dahwan
Rainee Yang
Lionel Messi

34. Set
#1
=
LINE

35. Set
#2
=
WeChat

36. Quesconable
Advercsing
Strategy

37. Investment
Porqolio
(in
U.S.)
•
•
•
•
•
e-­‐Commerce
o Fab.com
Gaming
o Epic
Games
(Gears
of
War,
Infinity
Blade)
o Riot
Games
(League
of
Legends)
Photo
Sharing
o Loom
o Waddle
Social
Networking
o Ark
Mobile
messaging
o Snapchat
(Potencally
at
$4
Billion
USD)

38. Snapchat

39. Sccking
Point
•
•
•
•
“U.S.
is
a
very
tough
market
to
compete
and
crack.”
-­‐
Marcn
Lau
Free
SMS
-­‐
takes
away
cost
appeal
o Compeccon
an
all-­‐cme
high
§ Local
favorite
iMessage
Whatsapp
Viber
“BBM
realizacon”
o Lack
of
“true
innovacon”
o Switching
barrier
too
high
Unfair
advantage
o Western
compectors
are
blocked
out
of
Chinese
market
•
•
•

40. Crowded
Compeccon
•
China
-­‐
“Mobile
First”
Market:
3X
More
Usage
on
Mobile
than
on
PC
o Baidu
§ Expansion
path
through
acquisicon
NetDragon
Websom
($1.85
Billion
USD)
o Alibaba
§ Expected
IPO
valued
at
$100
Billion
USD
§ Banned
its
employee
from
using
Tencent’s
WeChat
Silicon
Valley
o Facebook
§ Concnues
to
capitalize
on
social
networking
via
advercsing
o TwiVer
§ Experimencng
with
“firehose”
-­‐
selling
public
data
(tweets)
•
•

41. Quescons