Case study questions – Facebook

2. What was Facebook intended to offer to its users? What made this a viable business opportunity
(durable, attractive etc.)?

Facebook focuses on real-word relationship. It also restricted profile visibility to members of the
same university, so that, for example, Harvard students could only view profiles of other Harvard
student. This created a trusted environment in which to share information and that was a viable
business opportunity.

3. Why did Facebook take off? How was the external environment in 2004-2007 in America? You can
use the PESTEL analysis to present the environment and explain why Mark Zuckerberg took advantage
of what is called a “window of opportunity”.

Between 2004 and 2007 a lot of social network sites came off (Exhibit4) but the main
advantage of Facebook was privacy. At first it was exclusive, created for colleges, and then
extended to high schools in 2005. In 2006 Facebook began allowing everyone to sign up and
also rolled out many new features (messaging, groups, events, discussion board, video sharing
and mobile access)

Facebook PESTLE analysis

POLITICAL

Facebook is one of the modern communication means which were used by the
politicians to adopt their ideas, influence the individual opinions, include them to adopt their
ideas, and vote for them in elections. They target the audience by the advertising messages and
this is why workers in the political marketing focus on Facebook.

ECONOMIC

Facebook adds an estimated 15.3 billion dollars value to the European economy and
helps to support 232,000 jobs across Europe. Increased businesses participation through
advertising, customer referrals and enhanced brand value is worth around €7.3bn. The
Facebook App Economy is worth €1.9bn and supports around 29,000 jobs. While Facebook is
changing businesses in new and exciting ways, the methodologies used to measure its
economic impact are well established. In fact what makes this social network more powerful it’s
introduction to the stock market in 2012. Facebook shares will be available to trade on the
stock market for 38 dollars each- valuing the social network at a whopping 104 BILLION dollar

SOCIALISM

Facebook allows users to continuously stay in touch with friends, relatives and other
acquaintances wherever they are in the world, as long as there is access to the internet and it
has been known to reunite lost family members and friends because of the widespread reach of
its network. Facebook is becoming a portal for socializing as well as to connect with people with
different parts of the world in business, friendships and humanity. It also helps small business
to market themselves and grow and connect with their customers and provide services in
better ways

TECHNOLOGICAL

Facebook uses a variety of services, tools, and programming languages to make up its
core infrastructure. At the front end, their servers run a LAMP (Linux, Apache, MySQL, and PHP)
stack with Memcache. Let’s take a look at exactly what that means: LAMP (Linux, Apache,
MySQL, PHP); Memcache; Languages programming (Java, Python, C++, Erlang). Those languages
are used to create services.

 LEGAL

Existing laws may not be able to control behavior on Facebook, the existing legislation
usually invoked in prosecutions over comments on social network had been designed with
different purpose in mind, Legislation including the Communications Act and the Criminal
Justice and Public Order Act were written to control the smart phones.

 ENVIRONMENTAL

The thought of quitting has occurred to everyone at least once. Suffice to say that the
time wasted updating statuses, ‘‘liking’‘ trivial commentary some people said that Facebook
changed their lives because they gained the opportunity to socialize with people without calling
them and they can know their news. Market value exceeded $200 billion to put it among the
world’s biggest corporations, as investors bet on the company to capitalize on the future of
mobile advertising. Facebook shares rose 0.8 percent to $77.89 at yesterday’s close in New York
valuing the company at $201.6 billion, according to data compiled by Bloomberg. That made it
the 22nd-largest company in the world, behind Verizon Communications Inc. and ahead of
Toyota Motor Corp.

4. Devise a growth strategy for Facebook. Please explain how that strategy would affect Facebook’s
revenue streams and talk about potential risks and competitors. Draw a business model of Facebook’s
new strategy using the business model canvas in order to explain how the new business would work.

"We   cant   solve   problems   by   using   the   same   kind   of  thinking   we   used  
when   we   created   them."   –   Albert  Einstein  

As   long   as   we   want   to   build   a   concrete   and   innova9ve  strategy  we  have  to
think  out  of  the  box