KongZhong: Growth in a Dynamic Environment

The case chronicles the initial formation and growth of KongZhong, one of China’s leading players in the wireless value added service (WVAS) market. By 2007, KongZhong’s founders face the ‘perfect storm,’ given the highly dynamic nature of the WVAS industry, coupled with the Chinese government’s choosing of the WVAS industry to implement significant regulatory changes. The case also highlights issues regarding the underlying dynamics of China’s entrepreneurial environment, and extrinsic variables affecting entrepreneurship within rapidly-evolving industries and markets. After providing with background information on the founder’s prior startup and China’s WVAS market, the case proceeds to describe the company’s fast growth, initial public offering (IPO), cultural dynamics and differences, government lobbying initiatives, and early-2007 strategic dilemmas. This case allows students to appreciate and learn the differences of starting companies in China, as compared to the U.S.