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Facebook Case Study Analysis Carlos Miro June 3 , 2011

FACEBOOK Facebook Case Study Analysis Introduction

With the advancements in technology, the current generation is witnessing a new form of human communication via what is known as social networking tools. These tools have greatly shaped the way humans socialize by increasing the interactivity, efficiency and convenience of communication. Among the various social networking tools developed, the most important one which has managed to attract billions of users from all over the world will be Facebook. However, in the face of changing technology and increasing competition, it is worthy to consider the ability of Facebook to achieve its mission and evaluate the strengths and weaknesses of the tool to identify areas of threats and opportunities. Synopsis (Background) of the Situation Facebooks mission statement is to give people the power to share and make the world more open and connected ("Facebook," 2011). Facebook is currently one of the most profitable online enterprises as can be seen by its revenue of $1.2 billion in 2010 (Ashby, 2011). It has been estimated that the website is worth about $50 billion (VCCircle, 2011). With such positive performance, it is crucial to examine if the success of the company is sustainable and whether the company has or can improve so as to be better able to achieve its goals. Some even speculate that Facebooks real competition comes from site Twitter (Pearce , & Robinson, 2011, p.1-1) Key Issues Facebooks mission is to empower people with the ability to share and to increase connectivity. However, the ability of the organization to deliver this mission depends on several issues such as the type of functions which it offers users as well as the ability of the site and the organization to attract users.

FACEBOOK Define the Problem

In the given case study, it can be seen that Facebook faces serious threats from another social media tool- Twitter, which also shares a similar mission that is to instantly connect people everywhere to whats most important to them (Evans, 2011). The threat of Twitter has been recognized by Facebook and is demonstrated by Facebooks eagerness to buy over Twitter as well as implementation of changes which has been observed to be mimicking Twitter. There are various advantages which Twitter offers that make them more attractive than Facebook to some users such as the ability to communicate one-way to remove the noise as well as the unique and efficient search technology. Therefore, the threat from Twitter is a problem which needs to be addressed by Facebook so that it is able to achieve its mission. Alternative Solutions Facebook has the infrastructure, brand name, resources and ultimately the true followers in order to eliminate the threat from Twitter. One of the ways is to continue growing their web architecture so as to provide their users with capabilities that at the moment are unique to Twitter. Alternatively, Facebook can consider a partnership with Twitter instead of treating it as a competition which can add value to both organizations. They can also conduct research to determine the true needs and preferences of their current customers so as to offer customization for users and thus be more effective in keeping them, creating marketing noise and attracting new followers. Selected Solution to the Problem Among these three solutions, I suggest that Facebooks management conducts in depth research to offer the right options for their current customers discouraging them from using not just Twitter but other social networking sites which are present or still in the process of creation.

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Mimicking Twitter is only good in the short run but futile if it fails to bring over new users who see no need to shift over to Facebook if the functions present are alike. Lastly, a partnership is challenging, time-consuming and expensive to negotiate and would also be futile if there is no will on either side to cooperate

Implementation In order for the selected strategy to be implemented, it is necessary that thorough research is conducted to find out what consumers want in social networking sites so that the organization can craft and implement functions which effectively meet the needs and demands of users. This process can be implemented in a period of 6 to 8 months. Results can be introduced as expanded or new functions, where feedback can be collected for a period of about 3 months because improvisations can be made to the newly added functions. Recommendations The use of Facebooks own platform is a good way to conduct research and to request from feedback from existing users to find out their needs and demands and the type of functions which they are looking for in a social networking site. This information can then be used by the organization to create its niche and improve service to users. Conclusion All in all, while Facebook is highly successful, it is still necessary for the organization to assess its own strengths, weaknesses, threats and opportunities so as to ensure sustainability of the company in order to realize the desired mission. Facebook has the brand name equity, human capital, resources and followers to not only remain as a leading social networking site, but even to leave behind any of their current competition.

FACEBOOK References

Pearce, J. A., & Robinson, R. B. (2011). Strategic management: Formulation, implementation, and control (12th ed.). New York, NY: McGraw-Hill/Irwin. Facebook. (2011). Retrieved from http://www.facebook.com/facebook? sk=info Ashby, A. (2011, January 8). Facebooks revenue was at least $1.2b in 2010. Retrieved from http://www.engagedigital.com/blog/2011/01/08/facebooks-revenue-wasat-least-1-2b-in-2010/ VCCircle. (2011). Goldman, Digital Sky Investment Values Facebook At $50B. Retrieved from: http://www.moneycontrol.com/news/business/goldman-digital-sky-investment-valuesfacebook-at-3650b_509900.html

FACEBOOK Appendix A SWOT Analysis Template for Facebook


criteria examples Strengths Proven technology Good brand name Weaknesses

criteria examples Disadvantages of proposition? Gaps in capabilities? Lack of competitive strength? Reputation, presence and reach? Financials? Own known vulnerabilities? Timescales, deadlines and pressures? Cashflow, start-up cash-drain? Continuity, supply chain robustness? Effects on core activities, distraction? Reliability of data, plan predictability? Morale, commitment, leadership? Accreditations, etc? Processes and systems, etc? Management cover, succession?

Advantages of proposition? Capabilities? Competitive advantages? USP's (unique selling points)? Resources, Assets, People? Experience, knowledge, data? Financial reserves, likely returns? Marketing - reach, distribution, awareness? Innovative aspects? Location and geographical? Price, value, quality? Accreditations, qualifications, certifications? Processes, systems, IT, communications? Cultural, attitudinal, behavioural? Management cover, succession? Philosophy and values? criteria examples

Lacking one-way communication capabilities Too much noise (marketing and promotions)

Opportunities Growing and new technologies opportunities through acquisitions of small emerging sites Growing their business through access to millions of daily ussers

Threats Fast moving, rapidly changing technologies Competition

criteria examples Political effects? Legislative effects? Environmental effects? IT developments? Competitor intentions various? Market demand? New technologies, services, ideas? Vital contracts and partners? Sustaining internal capabilities? Obstacles faced? Insurmountable weaknesses? Loss of key staff? Sustainable financial backing? Economy - home, abroad? Seasonality, weather effects?

Market developments? Competitors' vulnerabilities? Industry or lifestyle trends? Technology development and innovation? Global influences? New markets, vertical, horizontal? Niche target markets? Geographical, export, import? New USP's? Tactics: eg, surprise, major contracts? Business and product development? Information and research? Partnerships, agencies, distribution? Volumes, production, economies? Seasonal, weather, fashion influences?

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MT460 Unit 3 Management Policy and Strategy Unit 3 Assignment: The Importance of Mission Statements Topics Covered Points Earned Content, Focus, Use of Text / Outside Sources (50%):
Answer provides correct information Covers questions or issues thoroughly Provides examples to support positions Integrates research sources into answers

Possible Points

14 4 7 7 14 7 7 7 NA 67 A

14 7 7 7 14 7 7 7 NA 70 96%

Analysis and Critical Thinking (50%):


Analyzes in addition to providing facts Analysis is well thought out Flow of answers is logical Considers different positions on the issues

Late submission of assignment paper Total Points Earned (100%) Grade / Percentage Earned