Group 3 - SDW Assignment 4 - We Chat - V Final.pptx

Group 3 - SDW Assignment 4 - We Chat - V Final.pptx

1. Submitted by Group 3 Sanjeev Sarin VX23033 Nilesh Trivedi VX23023 Vindhya Rajendran VX23042 Shrikanth Madhava Rao VX23038 Avinash Gowda VX23010 Shiv Prakash Godara VX23037

2. How will it Sustain the Innovativeness and No 1 Position in a Dynamic Environment? Concern For Tencent – We Chat

3. 6 Micro Innovation Strategy – Tencent (We Chat) Expanding relationship Chains Internationalization Features for establishing userbase Bypass competition Dynamic Mgmt Short Development Cycles Small Groups Freedom User Interaction & Feedback Subtle & Adaptive Dev Team 2011 Launch & Early Development User Base growth 2012- 100 to 200 Million 2013- 200 to 500 Million Major Features 2011- “Shake”, QR Codes 2012- “Friends Circle” 2013- “Virtual Red Package” Minimum Viable Product Simple Unoriginal Technologies Meets User needs 2014 Recognized as Most Innovative

4. 1. Introduction of the Virtual Red Package: - January 28, 2013: The Virtual Red Package feature went viral during the Chinese Spring Festival. Within two days, five million users distributed over 75 million red packages, significantly boosting user engagement on WeChat. 2. Tencent’s Strategic Shifts: - 2011: Launch of the open platform strategy to support developers and enhance the ecosystem’s competitiveness. - 2013: Introduction of the Virtual Red Package, aiming to integrate financial services into WeChat. 3. Achievements and Challenges: - 2014: Tencent's recognition as one of the most innovative companies and its continuous battle with competitors like Alibaba, Baidu, and Qihoo 360 in various domains. Key Events in We Chat Case

5. Tencent’s evolution from a simple instant messaging service to a dominant player in the mobile Internet market showcases its ability to adapt and innovate. The key strategies that contributed to its success include: 1 . Product Innovation: Constantly developing new features and products that surprise and engage users, such as the Virtual Red Package on WeChat. 2. Open Platform Strategy: Creating a supportive ecosystem for developers to build and distribute products, leveraging Tencent’s vast user base. 3. Research and Development : Investing heavily in R&D to stay ahead in technology and innovation. Tencent’s ability to integrate successful new products into its existing platforms has allowed it to quickly surpass competitors and maintain its market leadership. The company's strategic shifts to mobile Internet and social media have been critical in sustaining its growth and relevance in a rapidly changing industry. This analysis highlights Tencent’s strategic maneuvers and innovations that have shaped its journey and solidified its position as a tech giant. Analysis

6. Time Spent on Apps on Smartphone

7. Three Big Profits of WeChat 5.0

8. Business Model Canvas – We Chat Source: https://www.bizshakalaka.com/home/business-model-canvas/bmc-01-framework-2/use-cases-of-business-model-canvas/super-apps-we-chat-explained-using-business-model-canvas/#google_vignette

9. Political Factors: Stable political and legal environment with minimal risks of conflict. Economic Factors: Monitoring forex movements and consumer disposable income levels is crucial. Social Factors: Understanding consumer behaviour and demographic shifts can help tailor services. Technological Factors: The adoption of 5G and advancements in AI and machine learning present significant opportunities.  Environmental Factors: Consumer activism and environmental regulations can impact branding and costs.  Legal Factors: Varying health and safety norms and property rights issues across markets. PESTEL ANALYSIS

10. Threat of New Entrants: Moderate, due to WeChat’s brand, established user base and ecosystem. Low entry barriers in Internet industry in China. Bargaining Power of Suppliers: Low, as Tencent has significant leverage. Bargaining Power of Customers: High, given the availability of alternative platforms. Threat of Substitute Products: High, with numerous messaging and social media apps. Industry Rivalry: Intense, with major global and local competitors. ( Companies like Alibaba, Baidu, and JD.com are strong competitors to Tencent) Porter Five Forces Analysis

11. 1. Enhance User Experience and Engagement Recommendation: Continue innovating and adding features that enhance user experience and engagement. WeChat should prioritize features that align with user preferences and continuously improve the platform's usability, speed, and reliability . Supporting Facts: - The "hold-to-talk" voice messaging feature introduced in WeChat 2.0 was crucial in attracting many new users in a short period. - Adding detailed features like the "distance sensor" helped improve user experience by addressing specific concerns, such as privacy in voice messaging. Proposed Solution with Supporting Facts:

12. 2. Expand WeChat Pay and Financial Services Recommendation: Strengthen the integration and functionality of WeChat Pay to compete more effectively with Alipay and other payment solutions. Consider partnerships with more financial institutions to offer diverse services like microloans, insurance, and investment options. Supporting Facts: - WeChat Pay became a significant feature in version 5.0, challenging the dominance of Alipay in China’s online payment market. Partnerships, such as the one with China CITIC Bank to co-pay for transactions made through WeChat Pay, have proven successful. Proposed Solution with Supporting Facts:

13. 3. Monetization through Value-Added Services Recommendation: Increase revenue streams by introducing value-added services and premium features within WeChat. Focus on e-commerce, games, and exclusive content. Supporting Facts: - The introduction of features like WeChat Payment, Express Store, and Game Center in version 5.0 marked a shift towards sustainable profit models . - Offering exclusive deals and discounts through partnerships with businesses, such as Dianping’s discount for WeChat Payment users, can drive usage and engagement. Proposed Solution with Supporting Facts:

14. 4. Strengthen Ecosystem through Partnerships and Integrations Recommendation: Build a robust ecosystem by integrating more third-party services and applications into WeChat such as collaborations with e-commerce platforms, financial institutions, entertainment companies, or technology providers. Strategic partnerships can help expand WeChat's ecosystem, enhance its offerings, and tap into new user segments. ​ Encourage businesses to create and maintain active public accounts for better engagement and service delivery . Supporting Facts: - The division of public accounts into subscription accounts and business accounts facilitated greater engagement between businesses and users. - Partnerships with companies like Youbao and Dianping provided value-added services that attracted more users to WeChat . Proposed Solution with Supporting Facts:

15. 5. Enhance Privacy and Security Features Recommendation: Focus on enhancing privacy and security features such as encryption protocols, and transparent data handling practices to maintain user trust and comply with regulations . Address any privacy concerns proactively to prevent potential user attrition. Regular audits and assessments should be conducted to ensure compliance with privacy regulations and to address any potential vulnerabilities. Supporting Facts: - Jack Ma’s countermeasures against WeChat included raising security and privacy concerns. Ensuring robust security measures can mitigate such challenges. Proposed Solution with Supporting Facts:

16. 6. Global Expansion Strategy Recommendation: Strategically plan for global expansion by customizing features to suit local markets and complying with regional regulations. Collaborate with local businesses of respective countries and influencers to boost adoption in new regions. WeChat should also consider strategic alliances or acquisitions to gain a stronger foothold in key international markets. Supporting Facts: Although WeChat has a strong user base in China, expanding globally requires understanding and catering to the unique needs of each market. Tie-up with App Store & Google Play store for both IOS and Android users in other countries. Proposed Solution with Supporting Facts:

17. 7. Leverage Big Data and AI for Personalized Services Recommendation: Utilize big data and AI to offer personalized services and improve user experience. Analyze user behavior to provide tailored content, advertisements, and recommendations. Supporting Facts: - Understanding user habits has been critical in WeChat’s success, as evidenced by the addition of features like the "distance sensor" based on user feedback . By implementing these strategies, WeChat can maintain its competitive edge, increase user engagement, and generate sustainable revenue Proposed Solution with Supporting Facts:

18. THANK YOU!