STRATEGIC MANAGEMENT

ASSIGNMENT II

Submitted by:

Santosh K.C

MBA Term VI, Sec: B

Ace Institute of Management

Submitted to:

Mr. Sohan Babu Khatri

Faculty Member

SEPTEMBER 2021
TikTok is currently one of the most popular and interesting social media programs in the world.
The app is used as follows: users create videos of themselves which are lip-synced or acting out
comedy sketches for 15-60 seconds and can choose from a database of songs, effects or sound
clips. Collaboration is a major incentive to “duet” with someone by reacting to their video,
creating a split-screen diptych and thus entering into an endless chain of reactions. Users can also
upload their own sounds to sync them with someone else's original video.

All of this makes TikTok extremely fun to use, and helps explain why it’s grown so massively. In
September 2018, it surpassed Facebook, Instagram, YouTube and Snapchat in the number of
monthly installs on the App Store and was downloaded over a billion. times in 2018. It is smaller
than Facebook (2.27 billion monthly active users worldwide, including Instagram and WhatsApp,
which owns it), but is well ahead of Twitter (336 million) and Snapchat (186 million) . And as of
February 2019, 27 million active users were in the United States.

TikTok has gone through a fairly scalable process of integrating multiple platforms. TikTok's
parent company ByteDance first launched a mobile app in August 2012, Toutiao or Today's
Headlines, a daily collection of user-generated news content on AI that has been personalized for
users. ByteDance further expanded its product line in 2016 with the introduction of a video sharing
app, Douyin, for the Chinese market. In an effort to penetrate Western markets, ByteDance first
launched an equivalent of the Douyin video app called TikTok in 2017, then acquired Musical.ly,
a social video app for an estimated $ 900 million, and the name changed to TikTok. To facilitate
its acquisitions, ByteDance also acquired companies like Flipagram in Los Angeles, a video and
photo creation program linked to music clips, and invested $ 50 million in Live.me, a live
streaming app in Los Angeles, majority-owned by the Chinese mobile applications, Cheetah
Mobile. They also acquired News Republic, a global collection of mobile news services in France,
from Cheetah Mobile for $ 86.6 million. All of these platforms are integrated with TikTok to
deliver feed content to their AI platforms to generate and track popular content which has increased
the appeal of attractiveness as it shows the preferences of their users compared to other apps like
Instagram and YouTube. With these acquisitions, TikTok was able to expand its operations around
the world, as many of its partner organizations were based outside of China.
Another reason for TikTok's success is the use of AI. This really sets TikTok apart from other
social media apps, as the content displayed to the user is based on the user's likes and dislikes,
however with the use of AI, TikTok was able to take a more proactive approach to display
advertisements of the content to its users. . Acquiring algorithmic content through AI has led many
online influencers to become more active in the app. In addition, the use of AI content has also
been made easier for users, as the AI has taken care of many complexities such as audio
synchronization and smooth transitions in video editing. While one of its strong selling points A.I.
remains something of an Achilles' heel, many lawmakers around the world are still skeptical of
mass adoption, although the Chinese government is more positive about it.

Marketing has also played a big role in TikTok's success. Whenever a video created on TikTok is
shared on other social networks, the logo on the video is like a watermark with the user's TikTok
ID so that others who see the video can become more curious and at the same time visit the app to
see it more. Once they start using the app, the simple design starts selling the app itself. It has a
very simple user interface and all the key elements are available directly on the home screen. The
app also allows users to merge multiple tracks and use different filters to make videos more
interesting. Unlike other social networks like Instagram, the "For You" collection is shown first,
not "followed", so users can explore the hottest and most popular content before seeing the "next"
feed. Now, brands and top performing artists are running their own campaigns and challenges.

Though TikTok has seen success the platform still faces challenges. A PESTEL analysis can clear
the picture up better:

Political:

One of the biggest hurdles for TikTok is the political border. As a Chinese company, many
foreign governments are skeptical about the privacy policies of these companies. Since many
China-based apps are forced to pass user data to the Chinese government, TikTok's general
popularity extends to overseas governments as well.

TikTok is also accused of censoring content. The Guardian newspaper leaked documents that
TikTok censored political content that would anger the Chinese government because,
interestingly, there was no video pro-democracy protests in Hong Kong.
Internal Guardian documents have revealed that TikTok has censored political content that
would anger the Chinese government, over the alleged lack of videos from the Hong Kong
protest marches in 2019. Despite this, TikTok still claims that none of its moderators are not
based in China and no foreign government is asking the platform to censor content.

US Federal Trade Commission fined TikTok $ 5.7 million for failing to obtain parental consent
before collecting names, email addresses and personal information of children under 13 years.

Another obstacle is the rise in trade tensions between China and other countries. As China
increases its political influence in the world, there are bound to face backlash from current powers
of perceived malpractices on the part of the Chinese government. With tensions rising between
India and China, the Indian government has banned TikTok since July 2020 along with 58 other
Chinese shows. The apps industry is relatively easy to tackle and can be managed by any
government with very little damage to the economy. ByteDance must take these elements into
account when developing its overall strategy as a popular platform that can make it the first
targets of such tensions.

Economic:

There are great prospects for growth in countries where Internet use is increasing among the
young population. As many developing countries have access to better internet and cheaper and
more powerful smartphones, there is great potential for growth.

Another aspect that you can observe on TikTok is the relationship between employment and use
of the program. With more and more people staying at home during the pandemic, the use of
TikTok has increased dramatically because it is easy to use. Depending on the free time available
to employed people they can visit these markets.

In addition, as the business grows, many more jobs can be created, requiring more technicians
and creating more jobs. By developing methods to earn content and distribute the money among
content creators, the first in a long list of TikTok influencers can emerge. Creation of new areas
of work in the economy.

Social:
It is clear that the human attention span is decreasing, which makes the TikTok format more
attractive. Short videos are becoming the norm, as many do not have the patients to watch a
video that is too long. TikTok must take advantage of this. Although this can fall into the "too
short" trap invented by Twitter, users can only use 140 characters per tweet. They can
experiment with a beta that offers more content.

Another storyline that is changing thanks to TikTok is the music industry. In order to go viral on
TikTok many musicians and producers are creating music specifically suited for the app in order to
go viral and create buzz.

Before the challenges of the Internet came and went, they made it the norm. One of the main
reasons for TikTok's success is the ease with which it is possible to participate in such challenges
online. However, the business should watch out for challenges, as some challenges can be very
dangerous or culturally offensive. In India, for example, the lawmaker briefly banned
downloading the app on Apple and Android last April for encouraging “cultural degradation”
among younger people.

Using AI, video on such content can be monitored and deleted as it is found. However, it
shouldn't be entirely AI dependent there should also be human moderators to review the content.

Technological:

With smartphone technologies evolving daily, ByteDance has to keep its eye as the curve is
changing. Keeping up to date with the software requirements of new hardware is critical to the
future success of the application. You need to keep track of the hardware most people use and
optimize the software accordingly.

Also, at this level, it will be the most difficult challenge for your competition. TikTok must
continue to improve its artificial intelligence and other technical knowledge; otherwise,
competitors like Facebook's Lasso or Snapchat can win.

It will also help improve the user experience. This can be achieved by adding new features that
remove the unpopular ones and also improve the user interface.
The technological obstacle, over which ByteDance does not have much influence, is the state of
the Internet where it operates. TikTok can lose large markets if its target users are not connected
to the internet. To prevent this from happening, they can work with the Chinese government
overseas on such projects.

Environment:

While TikTok does not have a direct negative impact on the environment, some of the challenges
users perform may have an adverse impact on the environment. Such actions can go viral and
negatively affect the image of the company. On the other hand, challenges should be promoted
that encourage better protection of the environment, which can improve the image of the
company.

Legal:

Another minefield is the legal aspect of TikTok. Because it is a global company, they operate in
many different jurisdictions making it very difficult to comply with local laws. However, since
there are specific requirements in one place to work there, in another place there may be
completely different laws that they must comply with.

Chinese app makers have become experts in creating local variations of the same app. Just like
ByteDance Douyin, which was created in the Chinese variant of TikTok, you can make different
changes depending on the region.

The approach to legal changes must be proactive, not reactive. ByteDance needs, to some extent,
a way to lobby politically for legislative changes that could affect their operational capabilities or
force them to make drastic changes to their technological infrastructure. If such laws do not
come into force, the company must react quickly. Local variants allow them to more easily adapt
the variant to the domain for which the law was created, rather than modifying it for all users.

On the internal analysis, TikTok could change its approach to growth. Like many new app-based
businesses, TikTok is currently harnessing the viral growth engine to expand its user base. So far
it has been very successful. However, most of the online content is based on different modes
which go away quite quickly, but it can cause many users to turn off PP for another. As long as
they continue, the users will stay, but it may not be a sustainable model for the future. To ensure
old users stay they must also consider a hybrid approach to growth by incorporating the stick
engine of growth along with the viral one. Identify loyal and valuable users and reward them as
much as you can like YouTube which does this by giving content producers a badge with a
certain number of subscribers. Recognition of the platform can motivate them to continue
posting content that inspires their fans to follow them.

After making a fortune and worldwide recognition for his brand, there is still a problem to keep
users active and keep the app running for a long time.

TikTok has learned the hard way that success doesn't come cheap. The company spent almost $ 1
Billions of ads for the app in 2018.TikTok in India has nearly 200 million users. ByteDance,
owner, plans to invests $ 1 billion in India over the next three years. Offers impressive and
interactive advertising formats such as “Brand Takeover”, which allows vertical display in full
screen, and “In-feed native video”.

Internal advantages set TikTok apart from other competing apps. The company has a famous
workaholic culture, access to many of the best talent in China and a recent influx of American
executives. This gives TikTok a unique blend properties that have been converted into a
competitive advantage.

TikTok has around 1 billion monthly active users, which is kind of like Instagram, and TikTok is
the best of the competition when it comes to downloads. It beats Instagram, Snapchat, Facebook.
That's not to say that TikTok is more popular than these programs but it means that it is growing
very quickly. One of the reasons for this is that TikTok is relatively new; It's only been around
for a year or two so there's kind of a natural newness bias.

China has a developed business ecosystem that has been or has been formed around KOLs (key
opinion leaders) or Wanghong who made a living online. At the time, this business ecosystem
did not exist in the United States when Vine was introduced. Without a means of earning, the
leaders of the vine have no way to make a living, and that's why Vine dried up and died.

The application should not alter the current user interface and usability. You shouldn't bomb the
app with unnecessary pop-up ads which leads to the removal of major apps from the phone.
Apart from those little details as long as the app keeps innovating and retaining the user and
attracting new ones the app is safe for several years.