Submitted To: Sir Umair Chodhray Class: M.

com (iii) Morning

Submitted By: Arooj Azeem Subject: E-commerce

Roll No: L-1360 Assignment: Activity of Case Study

Q1: As an investor in a social network such as Face book, which financial and customer-related metrics
would you use to assess and benchmark the current business success and future growth potential of the
company?

As an investor my other financial metric would be CPM (Cost per thousand) & CPC (Cost per click).
Indeed with CPM, an investor can know how much advisers pay Facebook to publish their 1000 of their
ads. Then with the CPC, it is possible to know how much Facebook earn for each click on an ad.

As we can read in the case, Facebook will never sell members’ information to earn money.  

For customer-related metrics, I would check number of inscriptions per month,  it expansion at the
international, number of posts, like and share. I’d check too,  Innovation of application, to catch new
clients or create more customer loyalty.
 Q2: Complete a situation analysis for Face book focusing on an assessment of the main business risks
which could damage the future growth potential of the social network.

SWOT Analysis

Strength: Weakness:

1: Integration with websites and applications 1. 1: Weak CTR of advertisements

1. 2: More than a billion active monthly 2. 2: Social network lacks of some features
users 3. 3: One source of revenues –
2. 3: Excellent users experience advertisements on
3. 4: Understanding of user’s needs and 4. Face book.
behavior 5. 4: Attitude towards users’ privacy
4. 5: Strong brand image 6. 5: Lack of website customization
5. 6: Large consumer base with 7. 6: Weak protection of users’ information
externalities 8. 7: Imitable products and services
6. 7: High revenues 9. 8: Negative impacts of online
7. 8: Innovative workforce advertising on user experience.
8. 10. 9: Low diversification of business
11.

Opportunities: Threats:

1. 1: Increasing number of people using 1. 1: Increasing number of mobile internet

Face book through mobile devices users
2. 2: Expansion to China 2. 2: Users using ad-block extensions
3. 3: Diversify sources of revenue 3. 3: Slow growth rate of online advertising
4. 4: Open Face book marketplace 4. Identity thefts
5. 5: Business diversification 5. 4: Weak business model Imitation
6. 6: Product innovation 6. 5: Cybercrime
7. 7: Market penetration and development 7. 6: Market saturation
8.
Q3: For the main business risks to Face book identified in Question 2, suggest approaches the company
could use to minimize these risks.

Ans:

Business risk refers to a threat to the company’s ability to achieve its financial goals. In business, risk
means that a company’s or an organization’s plans may not turn out as originally planned or that it may
not meet its target or achieve its goals. Such risks cannot always be blamed on the owner of the
company, as risk can be influenced by various external factors, which may include rising prices of raw
materials for production, growing competition, or changes or additions to existing government
regulations