Question

Which kind of corporate strategy is Tencent practicing? How does this differ from the kind of corporate strategy embodied by the BCG matrix?

Does this kind of corporate strategy only make sense for a company like Tencent? Is this approach only logical for a Chinese firm?

Answer 1

Tencent is utilizing growth strategy as its corporate mindsets. Actually, we can say it is utilizing the related diversification strategy to expand its business portfolio. BCG matrix embodies four types of primarily business positions as per the market growth rate and market share of the company's,

1) Star business: In this both market share and growth rate will be high.

2) Question mark: It is a business organization having higher growth prospects but low market share.

3) Cashcows: Here , market share will be high in a low growth potential industry.

4) Dog Business: Here , both growth prospects and market share will be low .

In this way Tencent's business can be termed as star business as its performance is higher with larger market share and in a growing industry.

I think every kind of business companies can utilize this type of corporate strategy. Having business in a particular or specific industry gives competitive advantage in longer term. As firms will be developed it self as unique organization which will serve every possible products and services in a particular industry. For example, Ford offers almost every type of vehicle in automobile industry. P&G targets FMCG industry. Apple is concentrating in technology and innovation.