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This case analyses the evolution of Tencent, now (in early 2019) one of the top 10 listed companies in the world. The case focuses on WeChat, the social networking and lifestyle app created in 2010 and now (in 2019) with more than one billion users. It describes the emergence and growth of WeChat and how it came to dominate large parts of daily life in China; it also provides insight into how WeChat operates and the current strategic challenges facing WeChat.
Unlike some case studies on Tencent and WeChat, this case is based on in-depth interviews with executives in the company and in particular Allen Zhang, the founder of WeChat. It therefore provides an in-depth understanding of how WeChat works internally, and it allows the instructor to draw out some general points about innovation in today’s mobile-first digital economy.
- Tencent provides a good example of how a company swiftly changed its product mix to embrace disruptions in its core market; i.e. by moving from QQ as a PC-based product to WeChat as a mobile-phone based product.
- One of the reasons WeChat was so successful is that it was created by a separate team, operating at a distance and with enormous degrees of freedom away from its parent company.
- WeChat is a good example of a multi-sided platform, where users value having access to multiple services and advertisers, and vice versa. The case provides useful insights into how that platform was created.
- WeChat’s internal process for innovation shows how to get the balance between bottom-up idea generation and top-down control right. It underlines the value of a visionary leader who has an eye for how all the parts of the product fit together in a coherent way.
|LBS Case Code:
|Innovation and Entrepreneurship, Strategy
|Adaptive Innovation, Enterprise Agility, Social Networks
|Media and telecommunications