Youliaodao in the Era of Knowledge Economy: Go Big or Go Home?
(6 pages of text)
Case (Pub Mat)
In 2016, China witnessed a significant rise in the knowledge economy. Many users, who had been used to consuming information on the Internet for free, had become increasingly willing to pay for user-generated-content (UGC). Recognizing this emerging opportunity, Qiushibaike (QB), a well-established UGC platform with a focus on entertaining content, rolled out a new pay-for-knowledge product, namely Youliaodao (YLD), which focused on informational content. Instead of following the popular pay-for-knowledge product endorsed by eye-catching celebrities for hedonic needs, YLD differentiated itself by charging for high-quality UGC for practical problem-solving. QB needed to make a critical decision: Should the company support YLD with additional investments and promotion of its informational content, or should QB terminate YLD and return to the company’s core competence area of promoting more entertaining content? How could YLD cope with the increased competition and overcome these obstacles?
This case is suitable for use in undergraduate- and graduate-level courses on strategy management, new product development, management, marketing, or strategic transformation, including external market forces, internal capability assessments, and dynamic decision-making processes. After working through the case and assignment questions, students will be able to do the following:
- Identify the driving forces behind QB’s strategic transformation.
- Evaluate how high-tech companies like QB formulate and implement strategic transformation using assessment models such as a PEST (political, economic, social, and technological) analysis, Porter’s Five Forces, Porter’s Generic (Competitive) Strategies, and Richard Rumelt’s business strategy evaluation model.
- Analyze how QB made its decisions to launch and improve YLD.
- Describe how YLD differentiated itself from its competitors.
- Make a decision about YLD’s path forward.
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