Executive summary

In this case analysis report, the operations of Cheetah Mobile Inc., an international
technology company with its headquarters in Beijing, China will be discussed in great
detail. The company has produced several technological products. Among its products
are tool apps, content products and games, and AI products which include AI
platforms and AI hardware. The company is one of the companies that have a high
number of users of its mobile applications in Google Playstore. The issues that will be
discussed in this case analysis report revolve around the globalization of the company.
The company expanded internationally in 2012, choosing Taiwan as its starting point.
In this case analysis, the reasons why Cheetah Mobile Inc. chose its tool application,
Clean Master, as its first product for international expansion will be identified.
Companies should choose their globalization strategies carefully to ensure that they
succeed when expanding internationally. At the time of its international expansion,
there were increased users of android mobile phones. Thus, they needed to decide
which product would be ideal to enter the overseas market. One of the factors that

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should be considered is the demand for the product.

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Secondly, the reasons why Cheetah Mobile Inc. chose Taiwan as the starting point of

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its international expansion. Several factors should be considered before expanding

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internationally. The factors depend on the operations of the company in question. In
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this case, the factors that were considered by Cheetah Mobile Inc., a technology
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company, will be explained.
The reasons for the localization of labor will also be identified. After expanding
internationally, Cheetah Mobile Inc. chose to localize its labor. The factors that
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affected the decision will be explained in this case analysis report. Consequently, the
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strategies that the company used in solving the cultural differences and conflicts that
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were arising will also be identified.

Question One
Cheetah Mobile Inc. is a global is mobile internet company whose headquarters are in
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Beijing, China. The company has developed a lot of mobile applications and is one of
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the companies that have a high number of users in the google play store. The
company has developed tool apps, content products such as live streaming, games, AI
hardware, and AI platforms. Some of the mobile applications that the company
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developed are Clean Master, Security Master, CM launcher, Cheetah keyboard,

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Photogrid, and CM Browser (CHAO SU & ZHANG, 2019).

When entering into the global market, a company needs to come up with the best
strategies. That is because the global market is very competitive and requires a lot of
input for a company to be successful. Just like any other company would have done,
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Cheetah Mobile Inc. Came up with an effective strategy to enter into the global
market. Since the company has several products, it had to choose the best product that
would be used to enter into the international market. Several factors were considered
while making the decision and the company settled on using the tool application
Clean Master as its first product when entering the overseas market.
Cheetah Mobile Inc. was established in 2012. At the time, the android mobile system
was on the rise. With the increased demand for smartphones, the use of the android

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 system in mobile phones was growing. Most of the smart mobile phones use android
operating systems. That presented a very good opportunity for Cheetah Mobile Inc.
One of the most important mobile applications that the users of android mobile
phones needed were an optimization application and application that would boost the
performance of mobile phones. At the time, the Icecream Sandwich android version
(android 4.0-4.0.4) and Jelly Bean Android version (android 4.1-4.3.1) were the latest
versions of android systems in mobile phones. Since the android systems were slower
than the current android systems, mobile applications for boosting their performance
had a high demand in the market. Consequently, the mobile phones in 2012 had a
smaller RAM and ROM which led to slow performance of the mobile phones and also
the storage of the mobile phones filled faster.
The tool application Clean Master could optimize the performance of mobile phones
by clearing the mobile phone’s RAM. The Clean Master could also be used to identify
the junk files on the mobile phone and clearing them to create more space on the
mobile phone. Therefore, Cheetah Mobiles Inc. Created the mobile application so that

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it could help in cleaning the storage of mobile phones and optimize their performance.

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Due to the high demand for such mobile applications, the mobile application was the

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first single breakthrough point of the company. The mobile application was also

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relevant to all android mobile users globally thus the application was used as the first
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product to enter into the overseas markets. Consequently, the application was relevant
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to all android mobile phone users unlike the gaming applications, the AI hardware,
and AI platforms.
Considering global expansion, other alternatives such as video streaming, gaming,
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and social media would not have been as effective as the tool application Clean
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Master in global expansion. That is because the applications do not have a universal
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demand that is needed for the international expansion of an organization.

Question Two
Several factors were considered when expanding the company internationally. The
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country that was chosen to be the starting point for the international expansion of
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Cheetah Mobile Inc. was Taiwan. Several factors affect international expansion. One
of the factors that were considered when choosing Taiwan as the starting point for
international expansion was its market landscape. The market landscape is an analysis
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that is used to identify the key players in a market, the sector of the market, and its
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geographical location and then classifying them by their characteristics. Taiwan has a
similar market landscape as that of China for Internet Corporations. That made it
easier for the company to expand into Taiwan easily without affecting the company’s
operations, productivity, and profitability.
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Another factor that was considered when choosing Taiwan was the potential growth
rate of the market (Zahra & Karimi, 2017). Since the internet market in Taiwan had
been developing slowly, it was projected that the market would have a high growth
rate in the future. That would be attributed to the large number of people who had not
adopted technology in the country. Thus, there was a bigger potential and number of
customers in the country. That also presented another opportunity for the company.
Since the market was not well ventured into, the company would face minimum

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 competition. Therefore, the chances of securing a larger market share in the Taiwan
market was very high.
Another factor that made Taiwan a favorable place to be the starting point for its
international expansion was the similarity in language. In Taiwan, the main language
was Mandarin Chinese just like in China. That would make communications easier.
Through effective communication, the company could reach its customers easily and
it could address the feedback from the customers easily. Thus, the lack of a language
barrier also promoted the expansion into Taiwan.
It was easy to localize the operations of Cheetah Mobile Inc. in Taiwan. Due to the
local laws and regulations in Taiwan, the company could not open a branch directly in
Taiwan. Therefore, the company established cooperation with Leopard Mobile in
Taiwan. Through the localization of its labor and products, the company faced higher
chances of success in Taiwan. The cooperation with Leopard Mobile also reduces the
costs that could be incurred if the company would have registered directly into the
country. Thus, using Taiwan as its starting point in international expansion was very

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effective and efficient.

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In Taiwan, the operating costs are very low. Low operating costs would ensure that

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the company’s profitability was high. That is associated with the lower costs of labor

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in Taiwan, the low costs of electricity, and the low costs of rent. Consequently,
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Taiwan has a lot of IT talent. That explains why the company picks some of its
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employees from the universities.
Finally, the proximity between Mainland China and Taiwan increased the chances of
success. That is because there was close supervision in the expansion and the
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management in the headquarters could oversee the expansion actively. The guided
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international expansion increases the chances of success.

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Alternatively, another country that could be chosen as South Korea. That is because
the country is among the countries that have the highest skilled labor in IT. The
skilled labor in IT would be helpful in the production of quality products by Cheetah
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Mobile Inc. Consequently, the country has lower operating costs. That is because it
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has low production costs associated with low-cost f electricity and rent. It also has a
low labor cost. Due to the country’s highly skilled labor in IT, the company would be
competitive globally thus giving it a comparative advantage in the market.
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Question Three
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Localization of labor is the scenario whereby a company chooses to employ

employees from its country of operation. Once Cheetah Mobile Inc. expanded to
Taiwan, it chose to use localization of labor. The localization of labor has some
advantages that led it to be chosen by Cheetah Mobile Inc.
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One of the advantages of hiring local employees is that they have the relevant
knowledge about local business practices and culture. The culture in Taiwan is
different from the culture in Mainland China, where the parent company of Cheetah
Mobile Inc. is located. Thus, to promote the success of the company in the Taiwan
Market, there was a need to employ local employees. The local employees understand
the culture of the country. Thus, they can identify the potential problems that the firm
might face and the challenges that might face the customers with ease (Kapela, 2019).

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 That would promote the identification of the challenges and mitigation strategies that
would be used to eliminate the challenges. Thus, employing local employees would
lead to higher productivity of the company and an increase in its effectiveness and
efficiency.
Another reason for using local employees would be to eliminate the language barrier.
Effective communication is one of the factors that lead to the success of a company.
The local employees are fluent in the local language thus they can communicate
effectively with each other and with the customers. Additionally, if the top
management is local employees, they will come up with more effective ways to
handle the other employees.
Cheetah Mobile Inc. also chose to use local employees so that they could save on the
cost of labor. The cost of employment in Taiwan is relatively low and thus utilizing
the local labor would reduce the operating expenses of the company.
Additionally, employing local labor would promote the diversification of the
company’s workforce. That would give the company a better chance of growing in the

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local market. Taiwan also has high skilled labor in IT. That would promote the

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productivity f the company thus acquiring a bigger market share.

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Question Four

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After international expansion, Cheetah Mobile Inc. faced several cultural differences
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and conflicts in different regions. To begin with, there was a conflict with the
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European employees. In Europe, there were very strict labor laws and regulations and
the employees understood what was required of them. The conflict started when
Wang Lei sent an email to the European employees outside the working hours. One of
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the methods that Cheetah Mobile Inc. used to address the cultural differences in
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Europe was through instituting effective communication channels and optimizing the
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managerial practice in the countries. Through the communication channels, the

employees could give their feedback thus reducing their insecurity and distrust
(Alagözlü, 2017). It also enabled the company to address any issues that may arise
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effectively.
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The company also promoted the localization of talent. Through cross-cultural

management, the company would realize strategies to resolve arising conflicts and
cultural integration (Gurung & Prater, 2017). The company recruited local employees
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in the management position. The local management employees could ensure that all
the employees understand the company’s culture and help them accomplish the
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performance objectives at the same time implementing internal conflict resolution

techniques.
The company also promoted effective communication by ensuring frequent
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communication and exchanges among the management team in all their branches and
those at the headquarters. That encouraged open discussion. When communicating,
respect was observed. Effective communication ensured that the differences among
the employees working in different branches were recognized and acknowledged. By
doing so, the conflicts that arose from the cultural differences reduced significantly.
That ensured that the cultural differences among the different employees in different
branches were recognized and acknowledged. That made all the employees

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 comfortable working for the company regardless of the existing cultural differences
among them. Thus the company appreciated the different cultures of different
employees. That led to a decrease in the cultural conflicts in the company.
References
Alagözlü, N. (2017). Cross-cultural conflict resolution styles: Data
revisited. International Online Journal of Education and Teaching, 4(3), 199-211.
CHAO SU, C. H. R. I. S., & ZHANG, X. (2019). Circulating Mobile Apps in Greater
China: Examining the Cross-Regional Degree in App Markets. International Journal
of Communication (19328036), 13.
Gurung, A., & Prater, E. (2017). A research framework for the impact of cultural
differences on IT outsourcing. In Global sourcing of services: strategies, issues, and
challenges (pp. 49-82).
Kapela, M. (2019). Labor Costs and Localization in Global Value Chains:
Comparative Analysis and Conclusions. Foundations of Management, 11(1), 229-238.
Zahra, B., & Karimi, K. (2017). Subject: factors affecting and affected by

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Globalization rights.

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