Baidu's Business Model and its Evolution
Case Code: BSTR512
Case Length: 19 Pages
Pub Date: 2017
Teaching Note: Available
Organization: Baidu Inc.
Industry: Search, E-commerce
Themes: Business Model Innovation, International Management, Globalization Strategy
Abstract Case Intro 1 Case Intro 2 Excerpts
The case covers the rise of Baidu, Inc. (Baidu) as the dominant search engine in the world’s fastest growing internet market, China. Referred to as ‘China’s Google’, Baidu was founded in 2000 with the aim of offering internet search solutions to people in the Chinese language. Baidu’s investments in technology along with its focus on local content helped it maintain its lead in the budding search engine market in China. The case highlights the business model of Baidu, which was primarily based on a performance-oriented marketing platform for businesses to cost-effectively reach targeted internet users. Baidu’s home grown business practices, combined with the strength of its technology, gave it an edge over its rivals and made it the undisputed leader in the Chinese internet search with a market share of over 80% as of 2016. The case also discusses the business model innovation at Baidu and how the company has been looking for growth outside its core internet search business. With the search business maturing and slowing revenue growth, Baidu is moving beyond search as it invests heavily in online-to-offline (O2O) services and Artificial Intelligence. The case also discusses Baidu’s global expansion strategy and its emphasis on enhancing its footprint in emerging markets, where mobile internet usage is rising.
The case is structured to achieve the following teaching objectives:
- Evaluate the business model and strategy of Baidu and understand the factors that contributed to its success
- Understand the challenges faced by Baidu in the global internet search market
- Examine the global expansion strategy of Baidu
- Understand the need to continuously reinvent the business model of a company amidst rising competition and the changes in the business environment
- Explore ways in which Baidu can overcome the challenges
Secret of Success
Foray into O2O Services
A New Business Model
Can Baidu Bounce Back?
Business model; The business model strip; Business model innovation; Value proposition; Value chain; Competitive Strategy; International management; Globalization strategy; SWOT analysis; Market leader strategies; e-commerce
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