ASSIGNMENT II

On

INNOVATION MANAGEMENT & NEW PRODUCT

DEVELOPMENT
Submitted to
Dr. ANU GEORGE

Submitted by
JERIN GEORGE
Roll no: 24
Date of submission: 21/11/2018

DEPARTMENT OF MANAGEMENT STUDIES

VISWAJYOTHY COLLEGE OF ENGINEERING AND TECHNOLOGY
VAZHAKULAM
2017-2019

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TOPIC: Organisational Structure for New Product Development
(TENCENT)

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INTRODUCTION
Organization Structure & New Product Strategy
A traditional organization achieves efficiency and control of work by division of
labour. Employees or departments carry out work in one business area, such as design,
marketing or production. New product development relies on bringing together different
disciplines to make sure the new product has the required functionality and appeals to a target
market. As a result, companies have to implement specific organizational structures that
promote effective new product development and strategies.
Develop New Products in Teams
Develop strategies for new products by placing new product development in the hands
of special teams. Continuous new product development requires permanent team structures
whose members change as the required disciplines evolve. A particular product may require
special design or engineering expertise, and you can transfer the corresponding employees to
the team responsible for that product. Later, it may need marketing input, and an employee
with marketing knowledge can join the team. As the team gets input from different areas of
the business, it can develop strategies that work for the whole company.
Develop a New Product as a Project
Companies that only develop new products occasionally can set up a project
organization to develop a new product and a corresponding strategy. The project manager
receives overall goals for the new product development and assembles the staff he needs to
carry out the work. The project has a fixed budget, a schedule and representatives from
design, engineering, production and marketing to develop an integrated approach. A project
structure combines the interdisciplinary expertise required with a higher degree of control
than the permanent team structure.
Product Strategies in a Matrix Organization
Instead of adding specific structures such as teams or project groups to a traditional
organization, organize the company around interdisciplinary work groups with flexible
boundaries. Such a structure features the multiple reporting paths of a matrix organization,
where an employee may report to one manager for organizational or disciplinary issues and
another manager for work-related matters. The group developing new product strategies
combines the different areas of expertise with links to groups responsible for technical and
design work, manufacturing and marketing. A consensus-based process lets your company
develop new product strategies with input from all areas of the business.
New Product Development in a Traditional Organization
A traditional hierarchical organization can include product development functions as
part of the product organization. Separate staff or departments carry out marketing, product
management and product development functions. The marketing function focuses on market
development and promotion of the company, product management deals with existing
products, and product development designs new products and releases them for production.
Each determines the strategies relevant for their functions, with marketing implementing

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sales strategies, product management focusing on how the consumer uses the product and
product development deciding on strategic directions for new products.

TENCENT
Tencent Holdings Limited is a Chinese multinational investment holding
conglomerate founded in 1998, whose subsidiaries specialise in various Internet-related
services and products, entertainment, artificial intelligence and technology both in China and
globally. Its twin-skyscrapers headquarters Tencent Seafront Towers (also known as Tencent
Binhai Mansion) are based in Nanshan District, Shenzhen.
Tencent is the world's largest gaming and social media company, one of the world's
most valuable technology companies, and one of the world's largest venture capital firms and
investment corporations. Its many services include social network, music, web portals, e-
commerce, mobile games, internet services, payment systems, smartphones, and multiplayer
online games, which are all among the world's biggest and most successful in their respective
categories. Offerings in China include the well-known instant messenger Tencent QQ and one
of the largest web portals, QQ.com. Its mobile chat service WeChat has helped bolster
Tencent's continued expansion into smartphone services, and has been credited as one of the
world's most powerful apps. It also owns the majority of China's music services (Tencent Music
Entertainment), with more than 700 million active users and 120 million paying subscribers,
the world's largest and most profitable.
Tencent’s mission is to “improve the quality of life through internet value-added
services”. Guided by its “user oriented” business philosophy, Tencent achieves its mission via
the delivery of integrated internet solutions to over 1 billion netizens.
An industry leader and global pioneer of innovative, digital-based technology solutions,
Tencent aims to provide platforms and services that connect everything”. Through the
company’s two principal business operations, ‘social platforms’ and ‘digital content’, Tencent
develops and delivers game-changing products, such as social communication platforms
‘Weixin/WeChat’ and ‘QQ’, that connect people with services, foster closer relationships and
create new business opportunities.
From comics, videos, games and animation to music, literature, films and news,
Tencent offers an incredible array of first-class digital content and multi-media services,
providing entertainment and cultural enrichment to over 1 billion users across the globe.
Tencent also provides cutting-edge financial technology and seamless mobile payment
solutions that are helping support the development of smart cities, smart transport and smart
retail. Through innovative excellence and forging strategic partnerships with a range of
industries, Tencent strives to be the driving force behind China’s digitalization.
Tencent partners with a range of enterprises to lead digital transformation across
important pillars of the economy, including manufacturing, healthcare, retail and education.
The company is passionate about improving people’s quality of life through digital innovation.
As the digital economy gathers pace, in part driven by China’s "Internet Plus" development
strategy, Tencent is co-creating an ecosystem through strategic collaboration with our partners
and the development of open platforms. These partnerships foster the development of cutting-
edge technologies, including cloud computing, big data, and artificial intelligence (AI).

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 Individuals, businesses and entire industries across all sectors of our economy are
already realizing the benefits of Tencent’s Open Ecosystem, which is helping millions of
entrepreneurs and their employees establish new businesses and create new jobs. The
valuation of these ventures significantly exceeds 100 billion yuan (over US$14.5 billion).
Another of Tencent’s objectives is to use technology to accelerate the development of the
public good, part of its goal to become the world’s “most respected internet enterprise”.
In 2007, Tencent launched the Tencent Foundation, the first charitable foundation by
an internet enterprise in China. The foundation is devoted to creating a system that empowers
citizens to engage in charitable activities. Tencent Foundation launched in 2015 the first online
charity event in China, “99 Charity Day”. This campaign connects non-profit organizations,
netizens, and enterprises, to create a thriving philanthropic ecosystem.
Vision: “ to become most respected internet enterprise”
Mission: “improve the quality of life through internet value-added services”

ORGANISATION STRUCTURE

Technology Engineering Group (TEG)

Responsible for supporting the company and its business groups on technology and
operational platforms as well as the construction and operation of R&D management and data
centers, TEG provides users with a full range of customer services. TEG also leads the Tencent
Technology Committee on strengthening infrastructure R&D through internal and distributed
open source collaboration, constructing middle platforms and supporting business innovation.
Weixin Group(WXG)
Responsible for the construction and operation of the WeChat ecosystem. Leveraging
WeChat functions and open platforms such as WeChat Public Platform, Mini Programs,

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WeChat Pay, WeChat for Business and WeChat Search, WXG provides solutions and
connectivity for intelligent upgrades across all industries. WXG is also responsible for the
development and operation of QQ Mail, WeChat Read and other products.
Interactive Entertainment Group (IEG)
Responsible for the R&D, operation and development of the interactive entertainment
business including games and e-sports. Through systematic research and the exploration and
application of cutting-edge technology, IEG continues to create better interactive entertainment
content experiences for users. IEG assists the company in leading the global interactive
entertainment market and co-create a prosperous and up-to-date content ecosystem with other
business groups.
Platform & Content Group (PCG)
Responsible for the company's Internet platform and the integrated development of the
content and culture ecosystem. PCG integrates social platforms such as QQ and QQ space with
traffic platforms such as Tencent’s App Store and browsers, as well as content including news,
video, sports, live broadcast, anime and movies. PCG promotes cross-platform and multi-
modal development of IP, with the goal of creating more premium digital content experiences
for more users.
Cloud & Smart Industries Group (CSIG)
Responsible for promoting the company's cloud and industry internet strategy, CSIG explores
innovative interactions between users and industries to create better solutions for smart
industries via technological innovations such as cloud and AI. While driving the digitalization
of retail, medical, education, transportation and other industries, CSIG helps companies serve
users in smarter ways, building a new ecosystem of intelligent industries that connect users and
businesses.
Corporate & Development Group (CDG)
As the platform for the company's new business incubation and new business exploration, CDG
is responsible for promoting the development and innovation of important areas such as
financial technology business and advertising and marketing services, including payment and
financial applications. As a professional support platform, CDG also supports the company and
various business groups in strategic planning, investment and mergers, international expansion
and public relations.

Tencent Restructures To Target Business Services

Chinese internet giant Tencent Holdings Ltd. announced its first restructuring in six
years Sunday, including creating a new division to focus on business services such as cloud
computing.
Tencent has lagged behind rival Alibaba Group Holding Ltd. in cloud computing.
Business services are seen as a potential growth area as revenue from videogames and
advertising -- Tencent's bread-and-butter -- slows, partly because of regulatory problems and a
maturing market.

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 "It's a really major change and signals they are looking for a new strategy," said Shawn
Yang, executive director of Blue Lotus Capital Advisors. "Their most profitable businesses are
gaming and advertising, but they are about to hit a ceiling."

Tencent shares have plunged 20.4% this year, closing Friday at 323.20 Hong Kong
dollars, as Chinese regulators have frozen approval of new videogames, which is Tencent's
single-biggest source of revenue. Tecent's second-quarter profit fell for the first time year-over-
year since 2005 as it grappled with the increased government scrutiny.
The Shenzhen-based company said it will trim its business units from seven to six by
consolidating most of the responsibilities of several of its content-focused groups -- including
online media and mobile internet, into one. Videogames will remain under the interactive
entertainment group.
A separate group for its WeChat social network, which has more than 1 billion users,
will remain in place.
It also will set up a technical committee to push for research and development as
Tencent looks to a future powered by artificial intelligence and 5G, the company said in a
statement.
In a statement, President Martin Lau said the company had to "stay awake" to "lead
Tencent into the next era." Chief Executive Pony Ma called the changes "a new starting point
for Tencent in the next 20 years."

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 Alibaba dominates Chinese cloud computing, with about 45% market share compared
with Tencent's 10%.
Tencent traditionally has focused on products for consumers, so focusing on servicing
corporate clients will require a cultural shift within Tencent. The company is known for a
decentralized system where product innovation frequently percolates from the bottom up.
However, cloud computing requires a more centralized management structure for developing
the technology and selling to business clients.
But those changes are necessary if Tencent wants to remain a player in the future, Mr.
Yang said.
"They need to find the next biggest opportunities," Mr. Yang said. Catering to other
businesses will be "the most important concept for the next 10 to 20 years."
The restructuring marks a “significant strategic upgrade” for the company, which had
connected users with consumer services in the past, Tencent chairman and chief executive Pony
Ma Huateng said in a statement on Sunday. Given that “the next era of the internet is the
industrial internet”, Tencent will connect “industries and consumers to build a more open
ecosystem”

REFERENCES
 https://www.tencent.com/en-us/structure.html
 https://smallbusiness.chron.com/organization-structure-new-product-strategy-
73974.html
 https://www.scmp.com/tech/big-tech/article/2166540/tencent-restructures-eye-
industrial-internet-gaming-business-slows
 http://prog3.com/article/2012-05-18/2805675