Turbulent Times for TikTok’s Platform Strategy

At the beginning of 2021, TikTok was facing multiple market threats and had to decide what strategies to implement to manage them. TikTok was the world’s largest short-video platform, with users in 155 countries. But along with great success in entering numerous geographic markets, TikTok faced various geopolitical pressures, mainly concerning the company’s origins in China. The company had to consider how it could survive emerging geopolitical pressures, manage competitive threats from global technology giants as well as platform envelopment threats, and capitalize on its creative and somewhat addictive platform to expand its reach into new promising markets such as the African continent.

This case is suitable for undergraduate- and graduate-level courses on innovation, strategy, and technological or political business environments. Given the complex and broad issues covered in the case, students should have already covered the basics of platform business models and diffusion of innovation theory. Alternatively, the case is suitable for teaching platform dynamics (including Christensen’s disruptive innovation, network effects, platform envelopment, multi-homing, winner-take-all dynamics) and diffusion of innovation theory. This case asks students to consider the current market landscape and the situation TikTok is facing and assess its alternatives. After working through the case and assignment questions, students will be able to<ul><li>use Christenson’s classic theory of disruption to assess TikTok, having emerged from the low end of the market, and gain an understanding of the growing global short video platform market, including how it works and how revenue is generated;</li><li>analyze how technology platforms create value through a network effect and gain a deeper understanding of multi-sided platforms, platform competition, and platform envelopment;</li><li>understand the potential of short video platforms to disrupt the current landscape of the marketing industry and to create additional revenue streams by monetizing collected data;</li><li>apply the concepts of disruptive innovation and diffusion of innovation; and</li><li>recognize how and when geopolitical issues become a challenge for technology firms (both start-ups and incumbents) and learn about options to address those issues.</li></ul>

• growth strategy
• disruptive innovation
• Chinese social media