Zoom`s Rise Amidst the COVID-19 Pandemic

Case Code: BSTR619
Case Length: 18 Pages
Period: -
Pub Date: 2021
Teaching Note: Available

Price: Rs.500
Organization: Zoom Video Communications, Inc.
Industry: Technology & Communications
Countries: United States
Themes: Growth Strategy, Business Models, COVID-19, Competitive Strategy

Abstract Case Intro 1 Case Intro 2 Excerpts

Abstract

The case documents the meteoric rise of Zoom, a cloud-based conferencing tool, amidst the COVID-19 pandemic as work from home and social distancing became the new norm. Zoom was the most downloaded app globally with 37.8 billion downloads in Q2 2020. Founded in 2011 by Eric S. Yuan (Yuan), the tool allowed users to interact virtually with each other through audio, video, and chat. The case discusses the business model of Zoom and the reasons behind its success, including its ease of use as well as high-quality audio/video output.

With lockdowns in place the world over in early 2020 and the risk of the virus spreading, remote working became a reality. It was during this period that Zoom really took off. Zoom’s features — ranging from user-friendly tools for sharing presentations to fun options such as “virtual backgrounds” — contributed to its widespread adoption as millions of people transitioned to working from home during the pandemic. Zoom offered customers the best experience in its video meetings. Across the world, Zoom also kept students learning and enabled friends and families to stay connected while practicing social distancing. Zoom, which started off as an enterprise solution, became a go-to service for remote education, exercise classes, church services, and happy hour celebrations. Also, many companies used it to conduct meetings and organize their work processes. Zoom’s total revenue for fiscal year 2020 grew 88% year-over-year to US$623 million.

Despite its phenomenal success, Zoom came under scrutiny over its handling of privacy and security, including its failure to prevent uninvited guests from barging in on sessions. Other challenges included intense competition from deep pocketed rivals such as Microsoft, Google, and Cisco with their products Teams, Meet, and Webex, and building a large global channel partner network quickly, to continue growing its reach and market penetration. Going forward, the challenges before Yuan were to sustain Zoom’s success, convert free users into paying customers, fix its security problems, and restore customer trust.

Issues

The case is structured to achieve the following teaching objectives:

Understand the business model of Zoom.
Analyze the impact of COVID-19 on the video conferencing industry.
Understand Zoom’s growth strategy during the pandemic and the reasons behind its success .
Identify the challenges faced by Zoom in sustaining its position in the highly competitive video conferencing industry.
Examine the ways in which Yuan can overcome Zoom’s shortcomings.

Introduction

Background note

Business Model of Zoom

Success During the Pandemic

Challenges

The Road Ahead

Exhibits