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Acquisition of Instagram by Facebook - Essay Example

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Acquisition of Instagram by Facebook is a prominent occurrence in the business world in the recent times. A comprehension of the strategic reasons behind this acquisition is a critical aspect to gauge the long-term motives of the companies. …
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Acquisition of Instagram by Facebook
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Acquisition of Instagram by Facebook

Download file to see previous pages... A comprehension of the strategic reasons behind this acquisition is a critical aspect to gauge the long-term motives of the companies. Facebook is a social networking platform that helps to connect with family as well as friends along with facilitating in sharing own views and opinions, sending messages, sharing images and videos and playing games among others. On the other hand, Instagram Inc. founded in 2010, is a free photo sharing application software company. It provides a very beautiful, fast as well as amusing way of sharing photos with the family and friends. The company has become very popular with its photo sharing application but the acquisition of Instagram by Facebook at a valuation of $1 billon is really surprising for the whole industry because since the establishment of Instagram the company has no turnover up to now. It has only 35 million users of the application especially the Apple Smartphone users as well as other Android smartphone users. It is also very surprising for all because there are a lot of blog sites that are already accumulated with Facebook, despite this it has acquired such as a small application based company (Gavaghan & Warren, 2013). In this context, it is definitely required to be pointed out that understanding the strategies of the big companies is at times really quite complex. The term strategic management describes the process of analysing decisions as well as actions taken by an organisation in order to create and derive sustainable competitive advantages. Therefore, it is determined that managing the strategy of an organisation effectively as well as efficiently is the essence of organisational growth (The Social Media Guys, 2010). This essay intends to critically discuss the strategic opportunities and threats facing Facebook. Moreover, the different methods of strategic development that can be used by the companies will be identified. Consequently, amid these methods, the appropriate method applicable in case of Facebook’s acquisition of Instagram will be evaluated. In addition, with the aid of the TOWS matrix, a critical analysis would be made of the strategic decision taken by Instagram’s management to join forces with Facebook. Strategic Opportunities and Threats Facing Facebook In the global business world, every organisation has to deal with two types of environment i.e. internal environment as well as external environment. In this context, the parameters that will be described comprise the opportunities as well as the threats faced by Facebook by taking concern the external environment (Thompson & et. al., 2005). In the context of strategic opportunities for Facebook, firstly there is a need to highlight the acceptance of the global people of this innovative concept. The audience size of this social networking media and the talents who are associated with this concept is the significant strength as well as opportunity of this organisation for dealing with any hurdle coming from the global competitors. The term strategic opportunity is a broad concept because it is not only defined by the present business scenario simultaneously it also dedicatedly focuses on the sustainability as well as future prospects (Jeffs, 2008). In order to address the varied strategic opportunities, there is a need to determine the core strategic causes behind the acquisition of Instagram by Facebook. Behind this strategy, unquestionably it can be stated that Facebook acquired this company not because of the turnover generated by it but owing to the user acceptance related to the application. Facebook seeks to sustain in the global market through continuously providing innovative ...Download file to see next pagesRead More
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