FACEBOOK CASE STUDY

By MTiPO: Desiree Fabunan Yee Han Kuan Svyatoslav Mishchenko Patrick Lin Ngai Lung Wenhan Zhou

DECISION

Problem:

Growth/Expansion Strategy

Proposed Solutions:
1. 2. 3.

To Grow Internationally To Enter Different Market Segments To Concentrate On Increasing Per-User Revenue

Assumptions:
1. 2. 3. 4.

User base higher priority than revenue Significant number of countries with small Facebook user base Facebook has the capability and resources to localize Growth is viral
2

SWOT ANALYSIS
Strengths
• • • • Truly compelling product Continual viral growth Virtually unlimited feature set High user retention

Weaknesses
• Low revenue per user • Currently only support English (limited market) • Inexperienced in overseas market & culture • High learning curve for new users

Opportunities
• To grow internationally • To open up different segments • To concentrate on increasing company revenue

Threats
• Emergence of better social networking websites • Lose its appeal to users • Privacy issues • Financial threat due to impending lawsuit (ConnectU)
3

ANALYSIS –ECONOMIC ANALYSIS
Target New Segment in Existing Markets Improve Revenue Source in Existing Markets

ApproacExisting
h
New

Existing

Product s New

International Expansion

New Existing Custom

ers

4

Decision: To Grow Internationally.

HOW TO GROW INTERNATIONALLY

Challenge:
1. 2.

It may find it hard to displace the dominant local competitors. Local resistance to foreign culture.

How to Grow in other markets
1. 2.

3.

Localization through Language Spread Facebook through Evangelist 1. Overseas Student 2. Early Adopters Use Bowling Alley Effect

Characteristic of a Suitable Initial Overseas Market
1. 2.

Competing Product is technically weak or clone User base comfortable with Social Networks

5

REALITY TEST
Risk Market Facebook does not gain a foothold in overseas market Mitigation Strategy To hire local talent to localize the website. Target Initial Segment to Students whom have are returning from overseas studies Team Inexperienced in oversea culture & management Emergence of superior social networking website To hire someone with experience taking a website internationally Contingency Plan Establish a partnership with local social network Severity Probability High Medium

Buyout local networking website

Medium High

Technology

Improve the facebook feature Adopt & learn from Medium Low to ensure it remains appealing other competitors to the users Seek other sources of revenue High Low

Financial

Substantial Marketing Improve advertising model. Investment required expanding into overseas market Decreased in revenue/user in international market

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