Zoom is a technological innovation used in reliable video communication needs for webinars, chat online events, meetings, and phones. The product and service are tailored and managed by the company Zoom Video Communications, Inc. with the name Zoom being the popular tag the firm uses occasionally. The company was founded in April 2011 by Eric Yuan and serves different people around the world. Zoom specializes in business telephone systems, video telephony, and a platform for online chat. Zoom provides a range of services that are tailored specifically to serve various consumers at different usage levels.
There are enterprise solutions specifically made for use by companies and enterprises like big businesses. There are services for all customers in all social classes with some of the customers being individuals that just use the platform to stay in touch with their loved ones. Eric recently observed the changes in the video telephony business model during the coronavirus and quickly adapted the company to maneuver past the risks of the pandemic and is now looking for ways to improve service and profitability. I am an advisor for Mr. Yuan and I will analyze the company’s operations and operating environment to find avenues for potential improvements. This analysis will dictate the strategic decisions Mr. Yuan makes and the alternatives along the way. An action plan on how to implement the solutions proposed from the analysis will also be included.
The adoption and usage of video telephony and teleconferencing before the coronavirus pandemic was growing at a significantly consistent rate. The changes and adaptations to the pandemic lead to a progressive increase in the domain. Remote work grew steadily and with more people working from home, technology had to be leveraged to bridge the communication and coordination gap. The industry was worth just under 4 billion US Dollars globally in 2019. Zoom penetrated markets with products later because the company prioritized product development. Zoom would later be able to reap the benefits of its efforts when the company made a customer-centric model for the business and products and services that appealed to customers. Coronavirus
necessitated the demand for video telephony services to increase. Strategic acquisitions improved its stake as a big company and further efforts earned the company trillions of annual meeting minutes. Those conditions also increased the number of customers the company had. Growth in the number of subscribers was big but most of the numbers came from free subscribers. Paying subscribers did not have their numbers increase in the period.
The free subscribers took a lot of space and resources the company had which meant that Zoom needed more space to handle its increasing customer numbers. The company increased its resources with 50% of the infrastructure being aside for any further increases. On paper and structurally, the company is doing well but some of the profit margins it posted before the pandemic has lowered due to expenses on increasing the infrastructure. I would rate the overall performance of the organization at 7. Strategic changes in the system and improvement of business processes to minimize costs are still needed in a few sections of the company.
Mr. Yuan worked for Webex, a pioneer in the video telephony and teleconferencing products field. He served in an integral position that allowed him to become the engineer and leader he is. Zoom and Mr. Yuan value the customer and prioritize them when developing solutions. This was made clear by Mr. Yuan’s intentions when he quit Webex to develop his company. Involvement in the industry before starting his own company, Mr. Yuan was one of the best there was and his philosophy holds its ground in the company. Mr. Yuan knows too well the value of having good developers to develop a product the right way.
Zoom’s products and services are user-friendly and superior because they were tailored to serve that specific purpose as efficiently as possible. It has also evolved as a company and is now able to serve more customers with closer attention to the needs of the customer. Zoom has a rating of 8 on organizational health because fundamentals and logic are in place to shoulder and accommodate any changes. Attention to customer needs is an element that contributes significantly to Zoom’s competitive edge.
With the performance that the company has been posting, Zoom has positive directions in the areas it operates and the returns have been positive. However, the part where the company is unable to make a profit from customers in the free segment is concerning. These people are taking up the resources that are meant for other business processes. The organization perfectly fits in the desired state quadrant except for organizational performance which is low for an entity its size and the quadrant it falls into. These struggles and bottlenecks arise from facets of the company where the free services for customers have increased at a higher rate than paid services. Zoom should have a structure in place to handle the changes that happen in the domain instead of using it as an excuse for lower-than-expected performance.
I believe that the position on free service customers should be taken to find an optimal solution that can still benefit customers and Zoom. Mr. Yuan can allow for transitional methodologies to be implemented to find a way to convert some profit even from free customers. Adverts and discounts can be ideal incentives in this case. Operations are not optimal and that can also be improved by automation and business process improvement (BPI) practices.
Goals and Objectives
Zoom has always stayed connected with its customers in all domains and the company commits resources to ensure that its relationship with customers is good. Customer-centrism in product development is a good move but the company should also look at the cost of doing that. It is only harder when Zoom has to exploit its resources to improve services and products while benefiting only the customer and not the company itself. I think there should be a move in strategy for the company. It will be beneficial for it and its customers both in the short term and the long term. It is easier setting standards in a domain but sustaining them is much more complicated than people think it. Sustainability and improvement of profit margins can be achieved by having a core to support both sides of the bargain.
Other elements like corporate social responsibility significantly improve overall appeal to the masses. Marketing and advertising would do a company justice by creating awareness. More importantly, strategic partnerships will also go a long way in helping it grow its network. Basing products on a credible research and product development process at the company is critical in the operations of the company.
Zoom already has excellent products ready in the form of the outputs of its industrious research and development team. With a background in engineering and the technical side of operations, Mr. Yuan specifically tailored the core of this company to be in a good product development process. Even so, Zoom is not very flexible to adapt to changes in market demands because the advantage of having a good development team should be used. It is of no use having good developers and releasing a product to the market late. While product and service development is good, the company should focus on the customer side of creating and maintaining good relations and easing customer journeys.
Improving customer experience while using services and even in customer support will go a long way in increasing conversions. The adoption of superior strategies and frameworks will significantly improve operations. The transition from a free customer to one who pays to use the service can be hard. Alternatives would be to look for other avenues where the costs and expenses can be reduced without harming the performance of the company. At the moment, Zoom should strike strategic partnerships and collaborate with other entities to integrate its services into other products that can then be sold as a discounted bundle.