Facebook Inc. Business Analysis

This assignment delves into a comprehensive analysis of Facebook Inc.'s business environment and strategic positioning. It utilizes the PESTLE framework to examine external macro-environmental factors influencing the company, Porter's Five Forces model to analyze industry competition, and SWOT analysis to evaluate Facebook's internal strengths, weaknesses, opportunities, and threats. The assignment draws upon various sources, including scholarly articles, online resources, and case studies, to provide a well-rounded understanding of Facebook Inc.'s business strategies and performance within the dynamic social media landscape.

Analysis of
Business
Environment

Table of Contents
INTRODUCTION ..........................................................................................................................1
Main Body ......................................................................................................................................1
Analysis and commentary of the wider environment within which Facebook Inc..........................1
Micro analysis of the company........................................................................................................3
Conduct an analysis of the internal environment of Facebook Inc..................................................6
On the basis of macro, micro environment and internal analysis identify the strength,
weaknesses, opportunities and threats of the company. ................................................................8
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Business environment is the effective environmental tool which helps to create the new
business environment. Business environment includes external or internal environmental forces
which affects company overall structure and services. Business environment is dynamic in nature
which gives positive and negative impact on the business functions. Present report based on the
business environment of Facebook Inc. In which report will discuss about the macro and micro
environment of the company which creates negative impact on the business purposes. Along
with that, it gives some fact full fact which helps to full fill the user needs and wants. Further
apart, in order to accomplish the objectives. It will take different models and theories in order to
incorporate the proper analysis in terms of opportunities and strengths. This gives the positive
impact on the business activities.
Main Body
Analysis and commentary of the wider environment within which Facebook Inc inc.
Macro environment is the external environment which impact on the business activities.
External factors are the highly changeable and dynamic in nature. They keep on changing on the
basis of customer demands preferences. In terms of technologies development and innovation
market is highly approachable and productive. In according to the case of Facebook Inc it is an
American social media and social networking services (Abbott, 2015). They launch its website in
February 4, 2004, and today's almost a billion or a million users connected with the Facebook
Inc sites. Along with that, some major issues and conflicts may arise the challenges for the
company. Facebook Inc is known for its advanced services through which they connect users to
users. In order to operate the business in external environment company needs to adopt PESTLE
analysis in order to determine the force factors.
Political (P): Facebook Inc functions and their services directly connected with the
political environment. Political environment are highly influenced the services of Facebook Inc.
Besides, political factors includes factors such as democratic, population, corruption which
affects company decision making approach (PESTLE analysis of Facebook Inc, 2017). In terms
of Facebook Inc government concern about the data information of the users, issues arising in
relates with the Facebook Inc is privacy concern. In according to the recent news Facebook Inc
facing high conflicts in case of leak the users' information and data. This issues of privacy
enhance the cost of operation for the company (Abrahamsson and et.al., 2017). It makes

customers dissatisfaction. Due to this many of the user get concern about their safety needs of
their personal data (PESTLE analysis of Facebook Inc, 2017). These political factors affect the
services or brand image of the company. As per the government regulations use of social sites
are restricted in order to secure from hacking of personal information and number of increasing
fake accounts. On the other hand political security and stability is the important thing for the
company to maintained the company profit and images in the market. On the other hand in order
to safe the function and company operational activities (Armstrong and et.al., 2015). Facebook
Inc needs to adopt some security precautions techniques to keep the data safe of users. This fair
services and political environment helps to get the opportunity where government support to
allow advertising service to display and get the users' satisfaction.
Economic (E): Economic factor is the another driver forces which affects company
revenue and brand image in the market. Economic conditions and economic factors of the
countries shape the company structure. Facebook Inc needs to determine the economic factors,
the most important factor is gross domestic income of the country. This factor helps to determine
the purchasing and buying power of the customers. Growth of the economy increase the chance
for the company to enhance the communication or infrastructure. Besides, through which
Facebook Inc can also operate its business into more new market in order to make the strong
economic growth. As per the latest technology also launch the job posting or advertisements of
brands on the Facebook Inc page (Atighechian and et.al., 2016). Through they get earn income
from the brands. This is the another source or technology of the Facebook Inc adopts. Economic
factors stable the economic growth and development process through which companies also try
to expand the business operations in order to achieve the customer attraction.
Social (S): its is the most significant factor which directly connected with Facebook Inc,
social factors influence by the users, needs and wants (PESTLE analysis of Facebook Inc, 2017).
This is the another main objective of the company to determine the actual demands of the
customer. Social factors influence the Facebook Inc global reach or profit. This is the important
factor which company necessary to determine in order to adopt the new changes. As per the
growth when Facebook Inc introduce as the first social site through which users can connect with
anyone in the whole world (Cascio, 2018). Nowadays, Facebook Inc has provides various
services or ways to connect such as, video chat, live updates, video calling, video chat, now user
can also share video post. Society, media, people they influence the services of the company. It

gives the great and huge opportunity to company to make changes as per the demand of the
customers. This gives the positive impact on the business and getting higher satisfaction from
customer sides.
Technological (T): Technological factors are the highly growing and give positive
impacts on the business environment (DeFusco and et.al., 2015). Technology direct influence the
business of Facebook Inc. Facebook Inc is based on techniques, ideas, innovation. Without
having or implementing the innovative techniques' customer will not retain with the same brand
(PESTLE analysis of Facebook Inc, 2017). In order to retain customers or users, company needs
to adopt innovative strategies and features. Technologies used by the company to protect the
data or information of customers. With the help of information technology Facebook Inc secure
the data of users and make them satisfied and happy. Facebook Inc needs to adopt the innovative
and creative ideas for the company betterment and opportunity.
Legal (L): Legal factor is highly influenced the operations of Facebook Inc, company
should legally abide for the adopting all legal implication imposed by the law. It makes the
company environment safe and secure. Law impose gives limitation on the Facebook Inc
business, law gives high code of conduct in order to secure the negative happened (PESTLE
analysis of Facebook Inc, 2017). The benefit of this factor is customer scrutiny and their faith on
the company. Innovation and creative patent law provides opportunity to Facebook Inc.
Unsecure data and lack of involvement of legal implications may arise the issues in the company,
which gives negative impact on the company market share. Facebook Inc needs to adopt high
technology and services in order to keep the users' faith (Dinnie, 2015).
Environmental (E): environmental factor is the another foremost environment in the
business activities. Facebook Inc is highly connected with the natural environment. They connect
with the issues which affect the macro environment. It gives opportunity and growth to the
company in order to grow in the environment. With the help of social media and sites will
improve and satisfy the concern of the natural environment (PESTLE analysis of Facebook Inc,
2017).
Micro analysis of the company
Micro environmental factors are the essential factors to improve the internal business
plans and strategic management. Micro environment includes company strength and
weaknesses. Internal factors impact on the business environment directly, internal environment

forces are includes customers, suppliers, government, competitors. These micro environment
affect the company policies and influence market share and revenue. Facebook Inc should
determine the micro environmental factors which affect business environment directly.
Moreover, in order to analyse the internal analysis company adopts porter's five forces model.
Porter's five forces model:
Rivalry among existing firms: It is the first forces of the internal environment which
impact on the functions of company. In terms of Facebook Inc company they work around the
technology environment. In terms of competitors company main competitor is Google. In terms
of competition Google also introduce all kinds of services which is given by the Facebook Inc
company. In terms of the organisation they need to measure the high and powerful competitors
of the company in order to make the effective growth plans. This helps to make the strategic and
effective proposal plan (Ebert and Griffin, 2016). Facebook Inc ads and Facebook Inc absence
are tow most popular competing platform of the online. In terms of another competitors in the
Illustration 1: Facebook Inc Inc. Porter's Five Forces
Source: Facebook Inc Porter's Five Forces analysis, 2017

social media industry is YouTube, Tumblr, Instagram, Twitter, LinkedIn, Yahoo. In terms of
growth Facebook Inc is the largest social networking company in the world. This is the threat for
the company which may impact on the operation department. Competitors are always very
competing and challenging. In order to mitigate the risk or threat Facebook Inc needs to discover
new services or technologies in order to retain the customer attention (Fleisher and Bensoussan,
2015). In terms of other country and their rival competitors which is highly growing network
such as Renren in china, Mixi in Japan, vKontakte in Russia etc. in terms of fast growing
networking market has grown rapidly.
Threat of new entrants: it is the another threat for the existing companies, that new
company or new creative concept will change the attraction of customers or users. This provides
high opportunity growth for the company or threat to adopt the best effective technology for
maintaining the market value or share. Social media is the fast growing current in the market.
Social media provides great opportunity to users. For that, whole population earn income from
the social media platform (Grant, 2016). In order to that it become challenging task for the
company to maintain the same value in the market. In terms of that, it is the big threat for the
new entries in the market. Social media platform based on the innovation and creativity. In terms
of reducing the users ODF Facebook Inc it shows that another company in market has introduced
which provides better services to users. It is the leading and qualitative services these days.
Bargaining power of Facebook Inc customers depends on the nature of customers:
Facebook Inc provides their services in two terms advertise and users. In terms of Facebook Inc
bargaining power of the customers are immense in order to heavy competition in the market.
Bargaining power of Facebook Inc advertisements is limited. This is because in terms of
advertisement there are only two measure competitors Google and Facebook Inc itself. So that,
bargaining power is limited in this term (Ingram and et.al., 2015). Buyers are dominating
environment when company facing high competition in the market. Facebook Inc play a
dominant role in terms of set the pricing of advertisement.
Bargaining power of suppliers: the supplier of the Facebook Inc which provides
technology services to the Facebook Inc which helps company to develop various software and
applications on Facebook Inc. It gives the higher opportunity which gives positive impact on the
business environment. Facebook Inc is the bulk buyer of the latest technologies, besides there are
only few suppliers which provides technologies to the companies such s IBM and Ericson. In

terms of suppliers choices are limited and costly for the company. In terms of bargaining power
of the Facebook Inc with suppliers is limited (Johnson, 2016).
Threat of substitutes: Substitutes are the biggest threat for the company. In terms of
social media platform company facing high risk and challenges. It gives negative impact on the
company revenue in terms of getting things. There are many substitute social media platform on
which customer or user can easily switch. Such as YouTube, Instagram, twitter. Besides, in
terms of advertisement users have another options such as Newspaper, blogs, TV. Therefore,
substitute of Facebook Inc is very high and large (Kearns, Glantz and Schmidt, 2015).
Conduct an analysis of the internal environment of Facebook Inc Inc.
Facebook Inc is the largest organisation and effective work force company in order to get
the best possible outcomes. Facebook Inc is the leading social media site which provides various
advanced services to the Facebook Inc users. In terms of services or quality. Facebook Inc
suffers some issues and conflicts with the users. On the other sides, in order to overcome from
the effects company adopt advanced services and new technologies in order to gain the
satisfaction level of the consumers. There are different terms which helps company to adopt
opportunities and innovation (Pestle, Crowley and Weirauch, 2014). In terms of getting new
services or customer attraction. Company needs to adopt research analysis in order to determine
new technology development. Moreover, with the help of resources and techniques company
makes attractive product and services. Through which company capabilities will be show. On the
basis of which company decides their core product and services through which they get the
earning capacity from the customers. In terms of Facebook Inc skills and core services which is
Facebook Inc social sites. They promote the Facebook Inc brand image and quality management.
Besides, Human resource is the another internal source of the company through which they
getting the income source (Shen and et.al., 2015). Employees or human resource department take
care the system of internal analysis. Employees of the company enhance the customer service
and solve the queries and issues. In order to analysis the company internal activities there are
some elements through which company identifies the actual position of the company.
Core skills: Core skills of the company is creative software and application which
provide ease in communication process. This makes the environment more competitive and
advanced. Core skills of the Facebook Inc through which they get maximum income is social
media marketing and social media site. It gives the higher opportunities and growth to the

people. In order to compete with the other competitors (Smith, Stone and Furey, 2016). Core
skills of the Facebook Inc is good commons on technique skills in employees which helps to
think different new ideas and technologies.
Core Competencies: core competency is those competencies which makes company
different from other companies. Company core competency makes company more advanced and
high performer in the market. Facebook Inc has several core competency which creates customer
satisfaction and attract customer attractive sources. Facebook Inc provide opportunity to for sale
and advertising. They provide online platform for the companies to promote their own product
and services (Smith, 2017). Facebook Inc is the social platform where company provides various
option and feature for the users in order to get the customer attraction. Core competencies is the
deep proficiency that enables a company to deliver unique value to customers. This is big
opportunities for the company to adopt the best possible activities. Another core competency of
the company is having a million or a billion users which assess the services of the company and
generate profit revenue for the company.
Resources: Resources are the tools and techniques which helps to discover the things and
resources according to the company objectives. Resources are the most essential part of the
organization in order to serve the productive outcomes results. Facebook Inc resource are the
latest technologies and internet servers (Smith, 2017). The major technologies issue of the
company is to protect the information of clients. Another main resources of the company is
human resource, financial resource, operational resource. Resources are very essential for the
organisation which contribute maximum efforts of the company. In order to meet the needs of
customers company needs to take some effective action by the utilization of resources. Resources
Capabilities: Capabilities means high the ability to doing something which is very
essential and effective. This is the source of the organisations which protects the company in
effective manner (Wheelen and et.al., 2017). This is the effective results and improvements. As
compare to the competitors company facing high issues and effective management skills and
management skills.
On the basis of above discussion, it can be concluded that, internal analysis of the internal
analysis on the basis of capabilities resource, core competencies. It shows that, FB focus on the
customer satisfaction. On the other hand, Facebook Inc focus on the users' satisfaction and their
needs and wants. Social media platform is the effective platform to grab the business

opportunities. Now Facebook Inc allows users to give advertisement on the Facebook Inc page.
Many small entrepreneurs and people so small trading with the help of Facebook Inc (Zalengera
and et.al., 2014). Facebook Inc is the another source of transforming the information from one
place to another. Facebook Inc connects people to people even in the far places. With the helps
of strong internal environment and effective services they get the productive profit from the
customers. In the year 2014 on 4th February Zuckerberg launched The Facebook Inc with the
great mission and vision to give people power to share and make the world more open and
connected. At that time Facebook Inc received their first firm from peter Theil co-founder of
PayPal. Facebook Inc is the well known social media brand having high public image. Facebook
Inc having more than 1 billion active users each month. Facebook Inc provides their services in
70 languages. Facebook Inc launch new services or ideas which gives new services to the
customers (Fleisher and Bensoussan, 2015). With the helps of Facebook Inc services many
organisations and business get advantage of that, this helps to adopt the different advantages and
services with the help of which they take its business services. This is the higher and great
opportunity for the users. Facebook Inc approach the customers and try to fix the gap between
suers or new technologies. Interns of employee resource Facebook Inc hire well qualified
employees in order to meet the needs of customers in order to make the better services to
customers. Employees of the Facebook Inc adopt advanced techniques and resources in order to
make the best techniques and features for the website. Recent inventions of the company I to
introduce live chat with the people along with sharing video messages and video clips.
Moreover, the main objective of the company is to protect the information or data of users.
Along with that, Facebook Inc management is well productive and effect full. Facebook Inc
adopts customer approach of the basis of competitors analysis. In terms of financial resources
company collect their financial resources by getting online revenue. Facebook Inc popularity
comes through strong brand image (Kearns, Glantz and Schmidt, 2015). Customer satisfaction is
the another core competency of the company. Besides, company invest high amount on Research
and development department in order to make the new technology development.
On the basis of macro, micro environment and internal analysis identify the
strength, weaknesses, opportunities and threats of the company.
On the basis of above, discussion of macro, micro and environmental factors company
analysis the strength and weaknesses. Company also helps to determine the strength and

weaknesses of the organization. Company strength, weaknesses, threat and opportunity can
easily identify by the SWOT analysis (Smith, 2017). This helps to identify the internal strength
and weaknesses.
Facebook Inc Strength: the company strength support the company position, that the main
strength of the company is its brand value and market position (Facebook Inc. SWOT Analysis
& Recommendations, 2017). Facebook Inc is the leader of the social media sites. It has more
than 1 billion users every month. Facebook Inc earn the highest revenue income from the
markets. There are various strength of the company such as strong brand image, the largest
consumer base with externalities, high revenues etc. (Facebook Inc. SWOT Analysis &
Recommendations, 2017). The base of the company is to provide social media platform on which
user can connect with any person. This gives the higher opportunity and growth to the company.
In terms of Facebook Inc it is the large customer attraction brand. With the help of rapid versions
and new technologies they keep its growth higher and effective. It is very difficult for the other
competitors to beat with Facebook Inc. It is the another major global leader in between other
social media company (Fleisher and Bensoussan, 2015). In order to analysing external and
internal environment strength of the firm is effective management skills or growth.
Facebook Inc weaknesses: it is the internal factor which affects company policies and
operations. Facebook Inc suffers from many public issues and conflicts. It main purpose is to
provide user satisfaction approach. On the other hand, user concern with Facebook Inc is security
safety and data transferring. It is the immense threat for the company which arise weaknesses
and threats in the internal environment. In order to analyse the internal environment with SWOT
analysis tool weaknesses of Facebook Inc is giving below:
 Negative impact of online advertising on user experience.
 Low diversification of businesses (Kearns, Glantz and Schmidt, 2015).
 Easily imitable products and services.
In order to lack of unsecure environment people cannot build the trust among users. It
gives negative impact on the business services. Another main concern of the company is it is
very easy for other companies to generate another social site and give competition to Facebook
Inc. This is the another competition level for the company in terms of getting market share. Due
public safety controversies they reduce the under attraction. Moreover, Facebook Inc needs to
adopt high profile technologies in order safe the user data. Besides, Facebook Inc suffering from

low diversification which may arise risk factor. In online businesses it involves high risk in terms
of securing user information from hackers (Kearns, Glantz and Schmidt, 2015). Due to low
techniques of Facebook Inc hackers can easily hack the services. This gives the negative
impression on the users minds which gives adverse effects on business performance (Facebook
Inc. SWOT Analysis & Recommendations, 2017). In order to overcome from the negative
impact company needs to adopt highly secure technologies and software to give good services to
the customers.
Opportunities of Facebook Inc: in order to determining macro, micro and internal environment
analysis company opportunities is latest advanced technologies and customer demand. Company
can easily measure the demand forecast to identify the customer approach. It helps to grab the
user satisfaction and customer attraction (Facebook Inc. SWOT Analysis & Recommendations,
2017). This is the opportunity for the company. In terms of business they involve number of
opportunity for the Facebook Inc (Fleisher and Bensoussan, 2015). they operate its business level
internationally. Business expansion is the another opportunity for the company. It helps
Facebook Inc to reach maximum customer attraction. There are some major opportunities for
Facebook Inc has giving below:
 business expansion
 Product and service diversification.
 Market penetration and development.
Facebook Inc has increasing their opportunity growth with the help of service diversity
and product diversity (Fleisher and Bensoussan, 2015). It explains the more development and
customer reach. In terms of other possibilities another factor adopt high safe technology which
enhance the customer faith and trust level with the company. It is the biggest opportunity for the
company they adopt in the future.
Threat of Facebook Inc: Facebook Inc the biggest threat which company faces is that highly
involve risk factor and negative effects of society controversies facing by the company. They
involve heavy loss such as imitation, cybercrime, market saturation. These are the threats of
company. Imitation is the biggest and common risk factor, in which any company can adopt the
same services for the users with new concept (Ebert and Griffin, 2016). Like it involves heavy
risk for entering new competitors.

In order to analyse company threat and opportunities. Facebook Inc needs to adopt high
secure data software in order to gain customer attraction and loyalty (Smith, 2017).
CONCLUSION
From the basis of above section, it can be concluded that Facebook Inc is the highest
global leader in social media marketing. They adopt the best possible opportunities to retain
potential customers. Present report based on Facebook Inc case study. In which it discussed
company micro and macro environment analysis in order to measure market threat and
opportunities and company weaknesses and strength. Moreover, with the helps of PESTLE,
SWOT and Porter;s five forces. Company can easily draw the effective business model and
planning in order to grab future market opportunities.

REFERENCES
Books and Journals
Abbott, R.J., 2015. Pestle Analysis for Students.
Abrahamsson, P. and et.al., 2017. Agile software development methods: Review and
analysis. arXiv preprint arXiv:1709.08439.
Armstrong, G. and et.al., 2015. Marketing: an introduction. Pearson Education.
Atighechian, G. and et.al., 2016. Are Macro and Micro Environment Affecting Management of
Fresh Water Resources? A Case from Iran with PESTLE Analysis. Materia socio-
medica. 28(4). p.307.
Cascio, W., 2018. Managing human resources. McGraw-Hill Education.
DeFusco, R. A. and et.al., 2015. Quantitative investment analysis. John Wiley & Sons.
Dinnie, K., 2015. Nation branding: Concepts, issues, practice. Routledge.
Ebert, R. J. and Griffin, R. W., 2016. Business Essentials, 11/E. Prentice Hall.
Fleisher, C. S. and Bensoussan, B. E., 2015. Business and competitive analysis: effective
application of new and classic methods. FT Press.
Grant, R. M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
Ingram, T. N. and et.al., 2015. Sales management: Analysis and decision making. Routledge.
Johnson, G., 2016. Exploring strategy: text and cases. Pearson Education.
Kearns, C. E., Glantz, S. A. and Schmidt, L. A., 2015. Sugar industry influence on the scientific
agenda of the National Institute of Dental Research’s 1971 National Caries Program: a
historical analysis of internal documents. PLoS medicine. 12(3). p.e1001798.
Pestle, W. J., Crowley, B. E. and Weirauch, M. T., 2014. Quantifying inter-laboratory variability
in stable isotope analysis of ancient skeletal remains. PLoS one. 9(7). p.e102844.
Shen, W. and et.al., 2015. Reliable quantitative SERS analysis facilitated by core–shell
nanoparticles with embedded internal standards. Angewandte Chemie International
Edition. 54(25). pp.7308-7312.

Smith, N., Stone, C. and Furey, A., 2016. Does open reduction and internal fixation versus
primary arthrodesis improve patient outcomes for Lisfranc trauma? A systematic review
and meta-analysis. Clinical Orthopaedics and Related Research®. 474(6). pp.1445-1452.
Smith, S. S., 2017. Strategic Management Accounting: Delivering Value in a Changing Business
Environment Through Integrated Reporting. Business Expert Press.
Wheelen, T. L. and et.al., 2017. Strategic management and business policy. Pearson.
Zalengera, C. and et.al., 2014. Overview of the Malawi energy situation and A PESTLE analysis
for sustainable development of renewable energy. Renewable and Sustainable Energy
Reviews. 38. pp.335-347.
Online
PESTLE analysis of Facebook Inc, 2017. [Online]. Available through:
<http://marketingdawn.com/pestle-analysis-of-Facebook Inc/>.
Facebook Inc Porter's Five Forces analysis, 2017. [Online]. Available through: <https://research-
methodology.net/Facebook Inc-inc-porters-five-forces-analysis-global-leadership-in-a-
competitive-market/>.
Facebook Inc Inc. SWOT Analysis & Reccommendations, 2017. [Online]. Available through:
<http://panmore.com/Facebook Inc-inc-swot-analysis-recommendations>.