China's Cheetah Mobile: Strategy Development for a Global Business
|
Case Code: BSTR539 Case Length: 17 Pages Period: 2010-2018 Pub Date: 2018 Teaching Note: Available |
Price: Rs.500 Organization: Cheetah Mobile Industry: Mobile Countries: China, India, Global Themes: Strategic Management, International Business |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
The Business Model
KIS – like most Chinese mobile companies – had a ‘free-to-use’ business model, which allowed users to download its apps and games for free. Analysts believed that the model was the key reason for the high number of users for the company’s apps. It was believed that the company adopted the ‘free-to-use’ model as the Chinese, unlike Westerners, were hesitant to pay for mobile software.
As KIS did not charge for the utility apps and games, it made money through other methods. The company’s primary source of revenue was in-app mobile advertising. In addition, the company developed an ‘App Marketplace’ that recommended new apps...
The 'Go Global' Strategy
When compared to the previous year, the revenues of KIS increased by 105.6% in 2012 and by 160.5% in 2013. The continuous success of KIS’ products and the company’s high growth prompted Fu to consider going in for an IPO. In March 2014, KIS was renamed as Cheetah Mobile (Cheetah). In May 2015, Cheetah joined the growing list of Chinese companies to launch an IPO on the New York Stock Exchange (NYSE)...
The Mobile Advertising Space
Once Cheetah entered the global market, it quickly attained a large global user base. It realized that as it did not have the problem of user acquisition; it was faced with the tasks of monetization and retention. Cheetah then set itself the target of becoming ‘one of the top five mobile ad vendors in the world’....
Using Content to Boost User Engagement
In 2016, Cheetah made an endeavor to become a content provider in order to push up user engagement with its apps. This move was expected to help it maintain a large user base and continue attracting advertisers, and consequently to provide greater monetization. The company also stated that its decision to shift toward becoming a content provider was to combat the rising competition in the utility app landscape...
Cheetah's Global Quest
Fan considered Cheetah to be ‘the bridge between China and the world’, as a large part of the company’s target customers were outside China. In the various countries it entered, Cheetah searched for local business partners, apart from forming partnerships with mobile phone manufacturers, mobile network carriers, and application developers. Cheetah considered the US and India to be its most important markets...
Continuously Building Businesses
Cheetah partnered with a number of companies and invested in several startups in a bid to build a network that could complement its ad network. It also evinced an interest in investing in startups, as part of its research and development activities. Its ultimate aim in developing apps, building partnerships, and investing in startups was to build a large user base. The company wanted to monetize the customer base by sending personalized advertisements, using various algorithms. David Wu (David), Vice President of Global Marketing at Cheetah, said, “All our products are free for download so almost all our income comes from advertising. We need to increase the user base to increase the chances of someone clicking on ads.”...
New Focus Areas
With the growth in wearables and smart watches, Cheetah was developing utility apps for those devices. Fu said, “Utility apps by definition provide extra features that users need, so with any new platform, new problems will need to be solved. For instance, security will become even more important for smart-watches once they become closely tied to our individual identities through features like unlocking your door or logging medical data. New form factors also introduce new user interfaces and experiences, which will give utility app developers more opportunities to innovate.”...
Road Ahead
As of 2017, Cheetah was the world’s fourth largest mobile utility and content app developer. It was also featured among the Top 10 in the Brandz list of top Chinese Global Brand Builders for 2017, which ranked Chinese companies that had successfully established their presence in global markets...
Exhibits
Exhibit I:Information about Internet Companies
Exhibit II: Information about Mobile Operating Systems
Exhibit III: Information about AD Services
Exhibit IV: Brandz Top 10 Chinese Global Brand Builders 2017
Exhibit V: Financial Performance of Cheetah (2012-16) (in millions of RMB*)
Buy this case study (Please select any one of the payment options)
| Price: Rs.500 |
Price: Rs.500 | PayPal (11 USD) |
