Facebook Business Strategy - Case Study Example

 Facebook business strategy analysis ANALYSIS Facebook or Myspace is among the top social networking organizations in the world. For an organization to be the top organization in whatever it does, it has to be unique in its set up. Among the factors that have to have to be unique in its set up are the objectives and the perspective of the organization. The perspective and the objective should be set in a way that it gives the organization a feeling of direction and objective alignment. The perspective declaration of Facebook is "People use Facebook to keep in touch with their loved ones, to find out what's going on in the Globe and to discuss and show what issues to them." This perspective declaration is more of what Facebook creators desired to obtain at the start while they were starting out. It details the uses they meant to have their sites used for which includes; a) Stay linked with loved ones. b) Discover what’s going on in the world. c) Share and show what issues affects them. This gives them an objective, and by them I mean the control in Facebook. In whatever they do they should make sure the three objectives are attained. These days they are not just linking family members and buddies but also corporates and companies doing business from all over the world. Pestel analysis of Facebook Political - Facebook’s associates with the political scenery of areas it operates in. In this part of the PESTEL/PESTLE Research, the results of government authorities as exterior factors in the company’s distant or macro-environment are identified. The following are the major political factors impacting Facebook Inc. Government balance in the western world, popular governmental support for globalization and Government limitations in the China market. Economic - Economic circumstances shape Facebook business growth. The economical exterior factors that affect Facebook Inc. include; increasing the balance of creating nations, rapid economic growth of creating nations and increasing disposable earnings. Social/Sociocultural Aspects - Facebook’s popularity and worldwide accomplishment can be attributed to societal conditions. Humans are social by nature. The impact of sociocultural designs and changes on the company’s remote or macro-environment is easily noticeable. The following socio-cultural external factors are most important in the case of Facebook Inc; enhancing choice for high-quality services, enhancing online buying and enhancing support for business world responsibility. Technological Factors - Technologies impact Facebook Inc., considering that it is a company established on the internet, technological innovation is a compulsory requirement. The following technological exterior factors affect Facebook Inc.; improvement on the use of cellular phones, increase in a number of on the internet social networking companies and variation of on the internet retail store companies. Ecological/Environmental Factors -Facebook's social networking company is partially connected to the all-natural environment. The following ecological exterior aspects significantly impact Facebook, Increasing focus on company durability, increase the complexity of waste convenience requirements and Global warming threat. Legal Factors - Laws encourage specifications and boundaries on Facebook's business. The legal exterior aspects significant in Facebook's case are as follows, Enhancing certain laws and rules globally, improving regulating assistance for free Wi-Fi and Internet control in China. Facebook`s strengths and weaknesses Facebook resources are deep. Being among the pioneers in the industry when almost nobody knew how to use the social media sites available, Facebook has probably gotten much regarding experience, finances and also serve a large customer base. The other thing is that Facebook has gone on to buy other sites such as WhatsApp and Instagram which are game changers in their own way and which add value to Facebook as a company. But the largest resource that Facebook has a company is a number of users using its site. This makes it among the most influential social media site in the world and with this title comes influence and power making it among the most influential social media sites we have around which they can use to their advantage. This gives them an advantage over the others because as new people join the social media world they go to the one that's most popular and the one with a lot of people and Facebook offers this. The other thing, is that with such a huge number of clients that it serves, Facebook is definitely the top site brands and corporate prefer when it comes to advertising and spreading awareness about products and events. This gives Facebook a lot of revenue compared to the other social media sites, which for a fact we know that a company with more resources attracts more and also has a lot to invest to better its service delivery, therefore, making Facebook one of the most influential and most sought after social media site. Formulation. Unlike Twitter which is the major competitor to Facebook, Facebook uses a more traditional business model compared to Twitter which majorly depends on its novelty. Facebook's business model unlike the old ones that most companies use that offer the traditional manufacturing style, Facebook gives or rather provides a consumer platform. This platform allows the users to do the work allows the brands on the sites send the traffic and generate revenue for themselves and still has maintained itself by being a small company with a limited number of employees. Facebook gets its revenue from a range of ways that we are going to look at below; Facebook boasts of a revenue of over $1 billion per quarter in advertising revenue and 1.2 billion monthly active users which easy gives you why it is worth over $100 billion. a) 82% of the revenue it gets comes from advertising. Facebook advertises for large corporates that earn it millions in a year in revenues. Among the biggest Facebook’s clients include the likes of FORD, HSBC, MCDONALD’s, VISA and the likes of Nike and the many others. b) The other way through which Facebook earns its revenues includes through its virtual games that a lot of users love playing online. Some of the revenues it gets from selling credits in those games such as Farmville that’s a favorite among the Facebook users. However with a lot of users coming up each day and joining Twitter, Facebook should readjust its business set up to suit the changing needs the industry they are operating in that is always evolving. The business making and profit making aspect of it are just fine, the revenues coming from the advertisements on their sites can accommodate the company. The only thing that they can add to better their revenues is by making partnerships with other companies and other sites that boast of a high customer base like Google that will boost their sales of the top. To maintain their customer base they should improve their social media platform to accommodate their middle age consumers that are now moving towards Twitter. However, the other aspect of it are just fine and in line with the vision and the mission of the company. Among the things that should be changed should be; a) Reduction in the number of ads on their pages whenever you log in that overpopulates the page. They should adopt a twitter like a format to make the site about the user and less of the business aspect of it. b) The other thing is they should form posts that have hashtags the same way as twitter and rank the topics as discussed to make the users more aware of what the world is talking about and what is really happening in the world. To implement all this it therefore means that a whole lot of revenue will be lost but that will also come with a benefit that it will give the consumers full consumer experience and at the same time easen connection to the outside world. a) One of the challenges expected is a loss of revenue that can be compensated if Facebook invests in other sites that can help it generate almost the same amount of revenue. b) The other thing might be the loss of sponsorship deals and partnerships as well especially when they choose to withdraw some of the advertisements all over their home page. This they can also solve by increasing the amount of advertising charges and advertise less than advertise more for less and reduce the experience of the consumers. References Hill, C. W., & Rothaermel, F. T. (2003). The performance of incumbent firms in the face of radical technological innovation. Academy of Management Review, 28(2), 257-274. Read More