Analysis on Internal Environment of Facebook

Analysis of Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1. Impact of external environment on Facebook ........................................................................1
2. Analysis the impact of micro environment as well as competition of Facebook. ..................3
3. Analysis on internal environment of Facebook Inc. by taking resources, capabilities, core
skills and core competencies. .....................................................................................................6
4. Analysis of micro and macro internal environment of Facebook...........................................8
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Environment analysis is a strategically oriented instrument. Companies use these tools in
order to identify all internal and external factors that have great impact on the performance of
company. Environment is greatly affected by their environment. Facebook Inc. has been chosen
in this report. The founder of Facebook Company is Mark Zuckerberg which was launched on 4
February 2004. IT is the biggest company operating in social media which has operating income
about US$20.203 billion in 2017 (Allison and et.al., 2015).
The entire study is about the challenges faced by company operated or functioning within
macro and micro environment. The assessment will make understand the impact of external
environment using Pestle analysis tool. Further, the report will also identify the key stakeholders
within the global social media industry with the help of Porters' five forces analysis. SWOT
analysis will also be done in this assignment. The aim of this assignment is to conduct an
analysis of Facebook functioning on wide range of social media industry in order to assist in
decision making in respect to current position.
MAIN BODY
1. Impact of external environment on Facebook
PESTLE Analysis
It is an analytical instrument for statical planning of business. It helps in understanding
the impact of external environment on functions and operations of any company. External
environment includes changes in law, introduction of new laws, trade barriers and demographic
changes. Pestle includes six factors that are political, economical, social, technological, legal and
environmental factors (Abrahamsson and et.al, 2017).
Political factors- Political factors have direct and great impact on the operations and
functions of various businesses; there is a great impact even on Facebook. It includes taxes,
legislations and regulations as well as fiscal, trade and tariff policies which are imposed by
government. Facebook is facing dynamic challenges as it provided internet services all over the
world. Political factors of Facebook involves stability in political factors, freedom of press, state
of human rights and many other elements that influence revenues or income of company in direct
or indirect ways. Facebook site is operating on a wide platforms where voice of disagreement
with the policies of government and vitiated practises all over the world. Issues regarding right of
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humans has caused the limitation of social networking site in developing nations (Ingram and
et.al., 2015).
Economic factors- Economic factors also have a great impact on the operations and
functions on many businesses. It includes rate of inflation, employment, saving, interest, foreign
exchange as well as economic cycle that denotes an aggregate investment as well as aggregate
demand in an economy. Norms regarding competitions and their impact is also included in
economic factors that have immense impact on the company that can utilize economic elements
of nations like growth rate, inflation rate. These are all factors that affect Facebook are as
follows- types of economic system in nations and how it can be stable, interventions of
government in free market, rates of exchanges, efficiency in the market of finance and many
others (Scuotto and et.al., 2017).
Social factors- Social factors mainly include the way of people living in country and
have a direct impact on the culture of company. In order to understand customers of Facebook,
belief and attitudes of the populations plays a vital role. Social factors is a leadership of
Facebook company as it includes demographic, skills and perceptions level of the people,
structure of class, hierarchy and structure of power in the community, level of education,
attitudes and leisure interest. However, Facebook is boosting social apps that use Facebook login
which is a need to be listed on the App centre. They also sell free apps about 30%.
Technological factors- Technological factors have great impact on each and every
business as in today's era people are more advanced who always demand better and advance
technology. In social media industry, there is not only technological advancement but it also
includes speed up the advancement of technology (Hamilton and Webster, 2015). Facebook Inc.
is running its business with fast technology satisfying it users. Analysis of technology includes
development of recent technology by the challengers of Facebook, impact of technology on
offering of products, impact of cost and rate of technological diffusion. Company must use the
latest technologies to provide more comforts to users.
Legal factors- Laws and legislations are main factors included in legal factors that has
direct impact on the operations of business. Laws, rules and regulations play a significant role
especially operating in social media industries. In order to smooth functioning of Facebook, it is
very essential to follow norms and regulations imposed by the government. To make secure and
safe handling of information, it is crucial to have legal rights and norms. Patents, copyrights,
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