EXECUTIVE SUMMARY
Tencent Holdings Limited (THL) is a Chinese multinational tech-company started in 1998. The company has several affiliate companies that specialize in artificial intelligence, internet based products, and services, technology, and entertainment both internationally and locally. The tech-company is a world leader in the gaming industry, the social media industry, a leading venture capitalist and also the most expensive technology conglomerate ( Herawati, Achsani, Hartoyo, & Sembel, 2017) . In recent times, the company is declared to have surpassed its market value. In general, Tencent is symbolic of creativity and has thus been branded by several companies as the world’s most innovative company.
DESCRIPTION OF PRODUCTS AND SERVICES
Tencent Holdings Limited is leading in the gaming industry, a leader in the social media sector, an investment technology conglomerate, and a leading venture capitalist. The company has spread its tentacles into the mobile gaming industry, owns several social media platforms, web portals, smartphones, e-commerce, online payment systems, music, internet services, and several multiplayer online games ( Herawati et at., 2017) . Furthermore, the company is leading in all these industries that it has invested.
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The company further controls several associates and affiliates in several industries building a comprehensive portfolio of rights and investment across an assorted scope of businesses. The businesses include retail, real estate, virtual reality, software, banking, consumer technology, automobile, film production, space exploration, movie ticketing, natural management resource, big data, healthcare services, advertising, agriculture, food delivering, renewable energy, artificial intelligence, and many more businesses ( Che, 2018) . The Tencent Company falls under the category of one of the most dynamic and successful venture companies in the entire world, with stakes in over 600 companies and has recently diversified on start-ups on the mushrooming Asian technology industry.
TECHNOLOGY CONSIDERATIONS
In 2018, Tencent teamed up with a leading toy company, The Lego group, to mutually improve gaming business and possibly a social media platform for the children. During the same period, the company initiated a pioneer unmanned shop located in Shanghai attracting traffic of nearly 30,000 visitors. Tencent went ahead and attained a strategic co-operation with Carrefour in China. The aim of the co-operation was to improve the retail and service proficiency of Tencent’s clients and further reinforce Carrefour’s services using THL’s hi-tech competencies. In the co-operation, Tencent enjoys skills such as customer acquisition, cloud services, mobile payments, and digital affiliate programs.
Tencent Holdings Limited further acquired a stake in Ubisoft and a majority stake in Grinding Gear Games a New Zealand based company. The move to take the gaming business global follows a move by the government to scrutinize the gaming industry thereby leading to a decline in profit margins and subsequently the shares.
PRODUCT/SERVICE MARKETPLACE
The technology company has many products and is a principal internet value-added services provider in Asia. In the third quarter of 2018, the company recorded total revenue of USD 11,716 million a 24% increase compared to the third quarter of 2017. The company owns a big part of Mandarin’s digital music industry with Tencent Music Entertainment having more than 120 million paying subscribers and 700 million active users ( Herciu, & Ogrean, (2017) . Tencent realized tremendous growth, and in 2018, the company surpassed the US$500 billion market value thus becoming Asia’s most valuable technology company by market value.
In October 2018, Tencent revealed an organizational upgrade aimed at enhancing the company’s competitive advantages and the utilization of internal assets, to maximize its growth opportunities and capture the emerging new internet era. The improvement contains the development of two new business units, the Cloud and Smart Industries Group, and the platform and content Group.
MARKETING STRATEGY
In order to continue its dominance in the market, Tencent has continued to expand its young user base and heightened engagement with this user base through enriched video content and new entertainment-driven features. Moreover, the company has continued releasing new games thus targeting to increase its smartphone market for games by time spent on the games and user engagement ( Herciu, & Ogrean, (2017) . The company further targets to increase its digital content subscription by producing premium content such as drama and anime series. The company should conduct research on ways it can penetrate the African market which is dominated by Facebook, Twitter, and Google.
ORGANIZATION AND STAFFING
The company is led by the co-founder, Ma Huateng who happens to be the chairman of the Board of governors. The Chief Executive Officer, Ma Huateng holds a BSc. Computer Science from Shenzhen University and has more than 20 years of working skills in the internet industries and telecommunications services. Ma is in-charge of the overall direction, strategic development, and management of the China-based tech-company ( Che, 2018) . Lau Chi Ping who is responsible for the day-to-day operation of the company acts as the president and holds BSc. Electrical Engineering from the University of Michigan, MSc. Electrical Engineering from Stanford University and a Masters degree in Business Administration from Northwestern University, Kellogg Graduate School of Management.
Xu Chenye is also a co-founder and serves in the capacity of the Chief Information Officer. His responsibilities include customer relations and strategic development and planning. He like Ma received a BSc. Computer Science degree from Shenzhen University. He further pursued a degree certificate in MSc. Computer Science from Nanjing University. The Chief Operating Officer is Ren Yuxin a former General Manager for the department of value-added services. Ren is also the acting president of Platform & Content Group as well as Interactive Entertainment Group ( Chakravarthy, & Yau, 2015) . His responsibilities include sales and marketing of gaming products, research and development, and operations. Ren is a BSc. Computer Science and Engineering degree holder from the University of Electronic Science and Technology of China.
SCHEDULE
Tencent’s African market penetration is expected to take six months from project approval to launch of the marketing initiative. Many of the foundations for this platform, interactive features, and the design, are already available. The following is a schedule of some of the essential milestones for this project:
| TASKS | Start Date |
| Initiate Project |
1-Jan |
| Project kickoff meeting |
2-Feb |
| Complete African market research design |
3-Mar |
| Complete testing of African market |
4-Apr |
| Complete trial testing of live market |
5-Jun |
| Go live with site launch |
6-Jul |
Table 1: Schedule of Marketing Strategy
After the approval of this project, a comprehensive plan of activities will be designed by the selected project team, and that would consist of deliverables and all tasks.
FINANCIAL PROJECTIONS
Financial projections for the penetration of the African market are highlighted in the table below. The cited figure will account for projected social media market acquisition, additional staffing, and contract support for IT and training. Assumptions made are:
• Market share Acquisition will remain unchanged
• Set milestones are conducted in accordance with the schedule.
|
Measure |
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
5 Year Total |
| Africa market acquisition |
$20,000,000 |
$25,000,000 |
$30,000,000 |
$32,000,000 |
$36,000,000 |
$143,000,000 |
| Additional Staffing Costs |
$10,000,000 |
$15,000,000 |
$20,000,000 |
$20,000,000 |
$21,000,000 |
$76,000,000 |
| Projected Material, shopping, Insurance Costs |
$5,000,000 |
$7,000,000 |
$12,000,000 |
$12,000,000 |
$12,000,000 |
$48,000,000 |
| additional web server and IT hosting |
$22,000 |
$25,000 |
$30,000 |
$35,000 |
$40,000 |
$152,000 |
| Training of sales and marketing staff |
$100,000 |
$0 |
$0 |
$0 |
$0 |
$100,000 |
| contract for design, build, and implementation online store |
$200,000 |
$0 |
$0 |
$0 |
$0 |
$200,000 |
Total Additional cost for online sales |
$15,322,000 |
$22,025,000 |
$32,030,000 |
$32,035,000 |
$33,040,000 |
$124,452,000 |
|
Cash Inflow |
$14,678,000 |
$2,975,000 |
($2,030,000) |
($35,000) |
$2,960,000 |
$18,548,000 |
FINDINGS AND RECOMMENDATIONS
According to the information discussed in this feasibility paper, it is recommended that Tencent approves the African Market penetration campaign. The results for this study indicate that this initiative will be extremely profitable to the industry.
. References
Chakravarthy, B., & Yau, D. (2015). Leading Chinese Companies on to the International Stage. Perspectives for Managers , 7 (191), 1.
Che, J. (2018). Investment Analysis about China’s IT Company—The Tencent Holdings Limited. Modern Economy , 9 (06), 1112.
Herawati, A., Achsani, N. A., Hartoyo, S., & Sembel, R. (2017). IPO company stock valuation analysis 2000–2014. International Journal of Organizational Innovation , 9 (3), 113-130.
Herciu, M., & Ogrean, C. (2017). Does Capital Structure Influence Company Profitability?. Studies in Business and Economics , 12 (3), 50-62.
Jia, L. (2018). Going Public and Going Global: Chinese Internet Companies and Global Finance Networks. Westminster Papers in Communication and Culture , 13 (1), 73-75.
