Tencent’s Business Model’s Innovation Impact On Financial Performance

Since the 1990s, the Internet is growing with the development of modern social economy. The rapid development of information technology, represented by the Internet to follow the birth of the Internet enterprise provides the opportunities of the development. The generation and application of the Internet of things, cloud computing and mobile Internet technology enables the rapid development of Internet economy. Some Internet companies have survived, quite a number of Internet companies have disappeared into the horizon. In the process of enterprise competition with each other, in addition to the influence of external factors, a suitable business model is the key to the success or failure of the enterprise. Enterprise must design a survivable business model according to the market environment, policy background, which can be changed with the Internet technology progress and customer needs. This way can maintain the competitiveness of the enterprise development in the future.Scholars at home and abroad haven’t agreed on the concept of the business model. This paper argues that the concept of business model should be fused with four arguments, to understand it as a kind of operation mechanism. Its purpose is to meet the needs of customers to create enterprise value, through internal integration of enterprise system, organization structure, management norms, management strategy to operate. Studying the influence of the business model’s innovation on financial performance, we need to analyze the most important elements in various stages of the business model’s innovation through the life cycle. Then interpret its overall impact business model’s innovation to the impact of the financial performance, which reflects the importance of business model’s innovation to improve financial performance in the enterprise’s competition.This paper will take Tencent as a case. On the basis of the understanding of enterprise development, analyze the three stages of the business model and conclude the business model’s innovation by one phase to another phase. These innovations embody in the organizational structure caused by the change of the internal resources integration and the enterprise strategic change caused by external industry amalgamation. These key elements’innovation promote the overall innovation of business model. Analyzing the financial performance on three stages, we research the changes in financial performance caused by business model’s innovation. Through the case analysis we conclude that for Internet companies, business model’s innovation with the change of the Internet economy. How to change the old business model is crucial for enterprises. By copying imitating other enterprise’s business model cannot maintain the continuous development of the enterprise. Business model’s innovation determines the success or failure of enterprises in the competition, which affect the financial performance of the enterprise.Through the research on the case of Tencent, we confirm that the business model’s innovation can bring positive influence to the enterprise’s financial performance. The Internet company can revitalize the enterprise and improve their competitiveness through business model’s innovation, which is also the path to maintain sustainable development for modern enterprises.