TikTok: Tackling the Risk of a Ban
(6 pages of text)
Case (Pub Mat)
In early July 2020, the US government was considering banning TikTok, a social media platform for creating and sharing short videos, because its Chinese ownership had led to national security concerns. The founder and chief executive officer (CEO) of TikTok's parent company, ByteDance, had taken several measures to distance TikTok from China, including hiring an American CEO and establishing offices in Los Angeles, California, and London, England. However, ByteDance investors expressed concerns that the company's Chinese ownership would still remain a liability. How could the founder and CEO prevent a possible ban on TikTok in the United States? Should he sell ByteDance's stake in TikTok to American investors? Did he have other options?
This case is intended for undergraduate-and graduate-level courses in general management, principles of management, international business, and strategic management. The case elaborates on the challenges associated with a potential ban of a firm due to the firm’s country of origin. The case highlights the impact of a ban on stakeholders, including competitors and the app’s users. After working through the case and the assignment questions, students will be able to
- critically analyze the challenges faced by technology firms with a Chinese origin when operating in the United States;
- explore competitors’ responses to such challenges and how the focal firm can counteract its competition;
- describe how a ban impacts the users of a firm's product or services; and
- critically analyze the strategies that a firm should consider to deal with a possible ban on its product.
Arts, Entertainment, Sports and Recreation
United States, Large, 2020
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