BEMM251 Dissertation in Management

Dissertation Proposal MSc IN INTERNATIONAL MANAGEMENT

1. Name: CHENG QIAN Student ID No: 630013092

2. Please indicate your Specialism General (no specialism) √□ Marketing □ Entrepreneurship and Innovation □ Tourism □

Contents

1. Dissertation title 2. General topic area and research background 3. Research questions and objectives 4. Literature review 5. Methodology 6. Timetable

1. Dissertation Title What makes Tencent: An analytical research of the business model of Tencent.

2. Research background and General topic area · Research background Internet services and Social networking products have become hotter and hotter in Chinese market especially among young people. Since many internet services social networking products are free available, there is often a secret for people that what is the business model of such products and services and how does this kind of companies make profit, normally they do, with these products and services. As one of the China’s largest and most widely used Internet service portal now, Tencent started with a social messaging tool called QQ and on June 16, 2004, Tencent Holdings Limited (SEHK 700) went public on the main board of the Hong Kong Stock Exchange. Currently, Value-added Internet, mobile and telecom services and online advertising are the core business of Tencent. With these products and services, Tencent sets its strategic goal as offering users with "one-stop online lifestyle services". Tencent builds the largest internet community in china with its varied internet platforms like QQ, WeChat, Qzone, PaiPai and Tenpay, which can meet various needs of customers including communication, entertainment, e-commerce and others. · General topic area Business model: A business model pictures the rationale of how a business organization creates, delivers, and captures value (Osterwalder, Pigneur, Smith, 2010). Business model is a kind of conceptual tool with a series of elements and their relationship, it is used to describe the business logic of a specific objective. Business model defines the value that an organization can create and deliver to its customers and also demonstrates elements like the internal structure, partner network and relationship capital with which organizations can realize the value proposition and keep profitable. Business model is a simplified business logic which calls for many elements to structure it, generally, these elements include value proposition, target customer segments, distribution channels, customer relationships, value configurations, core capabilities, partner network, cost structure and revenue model. In analysing the business model of an organization, relationship between organization and its customers, suppliers and partners, especially their physical distribution, capital flow and information flow, is often the main concern.

3. Research questions and objectives Research questions: - What is the business model, including its value proposition, target customer segments, distribution channels, customer relationships, value configurations, core capabilities, partner network, cost structure and revenue model, of Tencent? - From the perspective of business model, what makes Tencent one of the most successful internet companies in China? - From the perspective of business model innovation, what is the strategic plan of Tencent in the field of the internet finance and how it works and what can it bring to Tencent? Objectives: The objectives of the research are to: - Discuss the business model of Tencent and figure out how Tencent operates profitably with this business model. - Discuss the factors regarding business model that distinguish Tencent from other internet companies. - Forecasting the strategic plan of Tencent in the field of internet financial service.

4. Literature review Business model has become a main concern for entrepreneurs and even VC firms. In many findings, business model are seen as a comprehensive system to solve the problems of identifying the target customers, delivering the value, satisfying the needs and establishing the relationship. Also, business model are often discussed together with the technological innovation, which is based on the consideration that technologies are one of the most important factors in an organization’s business model and also there is link between intellectual capital, value creation and business model. However, there is not enough research concern the transformation and inter- organizational cognition of business model namely how to distinguish the corporate business model and the business model of each business unit, which may be a main concern for large organization with more than two business unit like Tencent. Most researches of Tencent’s business model focus on its profit model which is mainly based on ePOSTcard like QQ Member, VIP Services, etc. At the same time, Tencent prefers to follow and copy the promising business models from others, which are often proved by practice, by taking advantage of its large user group, which are controversial. On the other hand, internet financial service are becoming hot sharply, three of the largest internet company which are Tencent, Alibaba and Baidu has respectively made their own strategic plan for financial industry. It calls for a totally new business model of these companies and it may lead to a great business model innovation which may be unprecedented.

5. Methodology - Interview In this research, interview will be conducted among staffs of Tencent in China. In order to describe the business logic of Tencent, this study will design an investigation to figure out what are Tencent doing, how does it deliver its value to customer and how does it make money from its products and services. Also, internal factors are parts of the whole business model, interview will also explore what are the staffs working for, why they choose Tencent and why Tencent choose them. - Questionnaire Since the number of users of Tencent (QQ, WeChat) reaches 798.2 million, almost everyone around may be a user of Tencent. Questions are designed to figure out why people choose Tencent (what does Tencent bring to them), what kind of products and services of Tencent will they pay for. - Library and paper resources It is the most common method to prepare a dissertation while it is often useful and effective. It is not difficult to find reports of Tencent and case study on Tencent, which can help analysis the organization in an all round way.

6. Timetable