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    Tencent

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    Sumit Suman
    Tencent competes in several attractive businesses including online gaming, social networking, payments, and others. In online gaming, Tencent offers a wide range of games and has pursued a strategy of participating at all levels to diversify risk. In social networking, Tencent operates Qzone and Xiaoyou/Pengyou. By 2017, Tencent had strengthened its position in gaming through acquisitions and partnerships. It also expanded its social networks and offered new mobile services. Tencent's strategy has been to invest in technology companies and leverage synergies between its businesses like using social features to promote new games.

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    Tencent

    Uploaded by

    Sumit Suman
    275 views2 pages
    Tencent competes in several attractive businesses including online gaming, social networking, payments, and others. In online gaming, Tencent offers a wide range of games and has pursued a strategy of participating at all levels to diversify risk. In social networking, Tencent operates Qzone and Xiaoyou/Pengyou. By 2017, Tencent had strengthened its position in gaming through acquisitions and partnerships. It also expanded its social networks and offered new mobile services. Tencent's strategy has been to invest in technology companies and leverage synergies between its businesses like using social features to promote new games.

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    Tencent competes in several attractive businesses including online gaming, social networking, payments, and others. In online gaming, Tencent offers a wide range of games and has pursued a strategy of participating at all levels to diversify risk. In social networking, Tencent operates Qzone and Xiaoyou/Pengyou. By 2017, Tencent had strengthened its position in gaming through acquisitions and partnerships. It also expanded its social networks and offered new mobile services. Tencent's strategy has been to invest in technology companies and leverage synergies between its businesses like using social features to promote new games.

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    275 views2 pages

    Tencent

    Uploaded by

    Sumit Suman
    Tencent competes in several attractive businesses including online gaming, social networking, payments, and others. In online gaming, Tencent offers a wide range of games and has pursued a strategy of participating at all levels to diversify risk. In social networking, Tencent operates Qzone and Xiaoyou/Pengyou. By 2017, Tencent had strengthened its position in gaming through acquisitions and partnerships. It also expanded its social networks and offered new mobile services. Tencent's strategy has been to invest in technology companies and leverage synergies between its businesses like using social features to promote new games.

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    of 2

    Please answer the questions 1-3 considering each of the main businesses in

    which Tencent competes.

    1. How attractive is the business? What does it take to win?


    1. Online Gaming Business:
    Offered wide range of games i.e. Casual developed in house and licensed from 3rd parties
    Massive Multiplayer online game (MMOG) – Sephiroth. Launched QQ Fantasy.
    More challenge games – Advanced casual – QQ Tang
    Light games – MMOG SanGuo. Signed distribution deal with Riot Games.
    Game strategy by participating at all levels. It also diversified the risk in hit driven industry.
    2. Social Networking:
    Qzone – for QQ user offered personal home page. They have wide range of content and
    communicate with each other. Here users don’t use their real names. It later launched
    Xiaoyou a real name social networking similar to facebook and later changed its name to
    Pengyou.
    3. Others
    Tenpay for Payments, Paipai for C2C website similar to Alibaba. Search service SoSo.

    They created win – win situation by creating the ecosystem for users, application developers
    and ourselves by pursuing open platform strategy. Opened it for 3rd party developers.

    2. How well positioned was Tencent in 2017?


    They strengthened in Gaming by launching MMOG. Acquired majority stake in Riot Games.
    Tough negotiation with Forever frugal. Acquired major stake in Carolina – based Epic Games.
    Launched game centre on Mobile its Mobile social network. Took stake in Activision Blizzard.
    Strengthened Social Networking by launching Microblogging, QQ International in English,
    French and Japanese.
    Offered many Mobile based value added services as the mobile penetration increased in China.
    Entered into the content business – Streaming platform. Major music streaming agreement.
    QQ positioned for young users. Weixin and WeChat for providing more convenience.
    Entering into AI based applications and big data, cloud services business. Bought 5% stake in
    electric car maker Tesla – high tech sector
    3. What was its strategy for getting there? What resources did Tencent
    employ to enter the business?
    It’s the leading Chinese company in Silicon Valley and also invested in 41 private US start-ups. It
    is investing in the big data and AI technologies. Technology services and cloud-based services
    business and expanding its business and strengthening.

    4. What synergies are there between Tencent's businesses?


    Tencent’s applications are all based on earning revenue by charging subscription and in-app
    purchases. The gaming business would charge the users to collect extra weapons and points for
    cash/payment. The social networking site Pengyou would also be used to leverage the
    achievements that one achieves in their gaming platform. The IMwould help in socializing and
    spreading of information about the new games, the new content (from their content business), etc.
    So, all the businesses of Tencent were related yet diversified.
    5. How effective has Tencent been in adapting its strategy to change?
    Tencent began opening up its platform for innovation where they started partnering with third
    parties and taking stakes in various firms. The linked users with content, services and hardware to
    enhance their lives online and offline. Their aim as a ‘Connection Strategy’ was to partner with
    industry leaders instead of competing. For example, Tencent made investment with 58.com,
    market leader in local classified ads.
    6. Who do you think would likely win in a fight between Tencent and
    Facebook?
    If we consider only China market, Tencent is the clear winner because they had diversified into
    different business such as gaming, IM, payment etc. and had squeezed out all the competition by
    putting the competitors at the corner. Outside China, however, Facebook has user base of 2 billion
    as compared to Tencent’s 1 billion users. People are also accustomed to use Facebook all over the
    world which leave little scope for Tencent to enter into the business.

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