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Strategic Policy Bussiness
In this light, we analyse the growth during the Covid-19 pandemic of Zoom Video Communication
Inc, a California-based remote conferencing services company, and see how its competitive product
features along with some sort of elaborate strategy, especially designed to capitalize on the new
work-from-home norm after onset of Covid-19, played into the firm’s favour giving it advantage over
its competitors.
Brief company information and its business model:
Founded in 2011 by Eric S. Yuan, the firm provides videotelephony and online chat services through
a cloud-based peer-to-peer software platform. Zoom software launched in 2013 as a tool allowed
users to interact virtually with each other through audio, video, and chat. The reasons behind the
firm’s success include the business model it adopted as well as the ease of use and high-quality
audio/video output that comes with its software.
Zoom uses a Freemium and Software as a Service (SaaS) business model where larger organizations
access more advanced features like hosting longer and larger meeting, critical for longer business
meetings or academic settings, through a paid subscription. The free version allows users to get to
know and use the product before committing. The 45-minute meeting in the free version and limits
on participant number act as a constraint, thus enabling it to convert many free users into paying
users.
Zoom’s growth strategy during the pandemic and the reasons behind its success:
During the covid pandemic, there has been worldwide corporate transition to working from home
culture. This has supercharged the demand for Web Conferencing. We have seen drastic increase in
adoption rates for web conferencing in past one year or so. More interestingly, one company alone,
Zoom, is responsible for the bulk of this increased market share.
Tracing the share price of Zoom shows its central role as a web conferencing service that has become
necessity to keeping people in contact during the pandemic. While having the steady price increase
throughout 2020, the announcement regarding COVID-19 vaccine efficiency later in 2020 resulted in
some fall in Zoom's share price from $500.11 to $403.58 in November, 2020. Since then, the share
price has seen fluctuations, but it has been pretty much strong.
Price of Zoom's shares 2020-2021(Nasdaq)
Source: statista
The success of Zoom during the pandemic can be partly attributed to its business strategy that was
customer and employee-centric, as well as its foresight for the increased demand for its services
when the onset of Covid created conditions more suited to the services it sells. The company acted
in timely manner to ramp up its product features as well as Research and Development to maintain
the edge over competitors. This can be seen in the way it ramped up its hiring during the initial phase
of covid pandemic and its increased investments in research, as shown in charts below.
With the increased usage of Zoom, there was strong criticism over security issues. There were also
various complaints raised against the company. This prompted the company to adopt strategies to
ramp up its privacy and security features, including the integration of end-to-end encryption. This
has further given stability to the demand for its services in global market.
References:
• Statista.
• https://blog.zoominfo.com/zoom-video-growth-coronavirus/
• https://www.businesswire.com/news/home/20200416005739/en/Impact-of-COVID-19-on-
the-Video-Conferencing-Market-2020---ResearchAndMarkets.com
• https://zoom.us/
• https://www.businessofbusiness.com/articles/zoom-is-the-most-successful-company-of-
the-pandemic-covid-19-heres-how-stocks-increased/