Competitor analysis and accounting of social networking site service companies in China

Purpose – The purpose of this paper is to employ competitive analysis and accounting (CAA) spectrum to analyze the growth and development of social networking site (SNS) service industry in China. SNS service is a modern social cultural issue that affects communication channels and mannerisms. Design/methodology/approach – This paper mainly utilizes archival resources as company financial reports and newspaper clippings online to provide a business and social developmental context to the study. Competitor analysis and accounting framework and organizational life‐cycle stages are utilized. Findings – The study illustrates competitive analysis and accounting in modern telecommunication business. It explores the perception of contemporary management accounting, and then raises an awareness of the relationship among accounting, business strategy, and social life. Research limitations/implications – This paper is based on two case studies; the findings may not be generalizable to other contemporary culture service companies. The cases have shown certain reasons why different CAA techniques are used by the companies in various stages of the organizational life cycle. Practical implications – First, in their start‐up stage, both Tencent and Renren, two SNS service companies, engage in product development to obtain founding resources and acquire customers so as to enhance market share. Second, in their growth stage, the two companies engage in product financing through capital market. Tencent even further extends its business to trade financing. Originality/value – Accounting has attained an increased importance for SNS in the social media culture. Such connection is especially found in competitor analysis and accounting in different stages of the organizational life cycles as addressed in the study.