The Strategic Management Style of Facebook

This document explores the strategic management style of Facebook and the business strategies used by Mark Zuckerberg. It discusses the internal and external environment analysis, strategic tools and models employed by the CEO, and offers recommendations.

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The Strategic Management Style of Facebook
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Table of Contents
Introduction................................................................................................................................3
A. The business and corporate strategies used by Zuckerberg.......................................4
B. Internal and External Environment Analysis...........................................................5
C. The Strategic Tools or Models Used by The CEO of Facebook..........................7
D. How Zuckerberg Created, Developed, and Designed Strategic Planning.....8
E. Different Contemporary Strategic Issues in Strategy................................10
Corporate Examples and Literature............................................................11
Suggestions/ Recommendations................................................................12
List of References...................................................................................14

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The Strategic Management Style of Facebook
Introduction
Facebook is a technology company and social network based in the United States. The
firm was developed in 2004 by Chris Hughes, Dustin Moskovitz, Eduardo Saverin, and Mark
Zuckerberg (Hall, 2021). The initial idea of starting the company came from Mark
Zuckerberg. Facebook's headquarters are situated in California, Menlo Park. Initially, the
platform was launched in college, where users were allowed to post updates and create
profiles to connect with friends ("Facebook," 2022). With time the site become famous for its
capability to share photos and videos, the like button, and the messaging option. Research
indicates that in the past thirteen years, Facebook has developed into a huge advertising
platform ("Facebook," 2022). In addition, the company has taken the initiative to spearhead
the provision of internet access in underdeveloped nations. Besides, the firm is also venturing
into virtual reality and artificial intelligence. With Zuckerberg as the CEO, Facebook has
grown to include over one billion active clients, whereby most of them access the platform
through its mobile app ("Facebook," 2022). As of 2021, it was the most prominent social site
globally, with around 3 billion users, and almost half of them were utilizing the platform
daily (Hall, 2021). Notably, access to the forum is free; thus, the company primarily earns its
cash from advertisements.
Accordingly, the astronomical growth witnessed in the company is not by accident
but a result of strategic solid, and open marketing planning. Over the years, Zuckerberg has
focused the firm’s plan on the intelligent acquisition, aggressive monetization of users and
rapid development to increase its penetration into the market (Shukaev, 2019, p1). In
addition, Zuckerberg has played a pivotal role in ensuring the success and growth of
Facebook. In this regard, Facebook's CEO, Mark Zuckerberg, has employed several strategic
tools to enhance the firm's organizational performance. Thus, there is a need to describe and

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analyze the strategic management style used by Mark Zuckerberg. Notably, several models
can be applied to understand different business strategies. The paper will assess the business
strategies and strategic tools adopted by Facebook's CEO. It will also explore the external and
internal environment of the company. Lastly, it will examine the different contemporary
strategic issues, justify the stands, and offer recommendations.
A. The Business and Corporate Strategies Used by Zuckerberg
Over the years, Zuckerberg has employed several business strategies which have
brought positive contributions to the firm. One of the effective strategies that Zuckerberg has
embraced is the continuous acquisition of similar start-up companies. The first acquisition by
Facebook occurred in 2009, whereby the company bought FriendFeed for $47.5 million
(Shukaev, 2019, p2). Notably, this acquisition enabled Facebook to compete with Twitter
since FriendFeed was a real-time web. Another significant investment by Zuckerberg was
that of Instagram; this move was made to counter the competition from Snapchat. Essentially,
the main reason for using these strategy patterns is to ensure that Facebook remains relevant
in the social network industry (Shukaev, 2019, p2). In 2014, Facebook acquired the
WhatsApp application for nineteen billion dollars (Shukaev, 2019, p2). This move enabled
the firm to compete effectively with rapidly developing companies such as Google Hangouts,
Kik Messenger, and Line. Thus, the acquisition has been one of the fundamental strategies
that have contributed to the tremendous growth of Facebook as a company.
Another important strategy that Zuckerberg has utilized is the aggressive monetization
of users. According to Ray (2012), Facebook attributes a considerable percentage of its
growth to monetization (p4). According to Zuckerberg, individuals using mobile products are
engaged; thus, they hope to increase engagement while introducing new products and
enhancing their platform (Ray, 2012, p4). In addition, the CEO holds that Facebook is
determined to integrate monetization into its product teams to develop a more valuable and

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more potent company (Ray, 2012, p4). The company is also planning the same strategy for
WhatsApp and Messenger. Although the two apps generate little income, they attract millions
of users; hence the need to search for an appropriate monetization plan.
Accordingly, the key results and objectives model can be used to elaborate on the use
of monetization and acquisition by Zuckerberg. Specifically, the theory involves integrating
the broader organizational objective into goals and assessing their significant results (Hart,
2022). The model involves establishing about five attainable objectives and expected
outcomes for each (Hart, 2022). After identifying the results and objectives, one must plan
initiatives to achieve them. In the case of Zuckerberg, the main objectives are developing
Facebook, remaining relevant in the industry, and countering emerging competition. Thus, he
understands the need for the company to expand into different social network areas. As a
result, multi-billion-dollar firms have witnessed dramatic growth in evaluation and user base
(Shukaev, 2019, p3). Therefore, acquiring start-up companies enable Facebook to remain
growing, competitive and relevant in the technology industry.
B. Internal and External Environment Analysis
Internal
Facebook owns a considerable services portfolio, including Instagram, WhatsApp,
Messenger, and Facebook.com. WhatsApp is a secure, reliable, and simple messaging
application utilized by businesses and individuals across the globe to converse privately
(Helmond, Nieborg, and van der Vlist, 2019, p5). It serves more than one billion users who
fall between the age bracket of eighteen and twenty-nine (Helmond, Nieborg, and van der
Vlist, 2019, p5). Facebook enables individuals to communicate, discover, share and connect
on personal computers and mobile devices. The platform serves over 3 billion individuals
worldwide, with one-third of them consisting of the twenty-five to thirty-four age brackets
(Helmond, Nieborg, and van der Vlist, 2019, p5). On the other hand, the messenger is a

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powerful but simple messaging application for individuals to associate with businesses,
groups, family, and friends. Lastly, Instagram brings individuals closer to things and people
they love. Thus, these four applications are the primary products of the Facebook firm.
Additionally, Facebook has remarkable profitability and an exceptional leadership
team. Notably, the company generates significant revenue from its different platforms
through advertisement (Ray, 2012, p10). Irrespective of the income received, the company's
investors do not enjoy divides since Facebook stock prices are lower (Ray, 2012, p10). This
explains the exceptional ability to acquire new firms. On the other hand, its tremendous
growth is attributed to its leadership. As the chair, CEO, and founder of Facebook,
Zuckerberg has a primary responsibility to determine the company's product strategy and
direction.
External
Given the broad scope ofthe social network and technology industry, Facebook has
several competitors, including TikTok, WeChat, Twitter, and YouTube. These platforms
keep Facebook on its toes; since they offer similar services as the company (Shukaev, 2019,
p6). Notably, Porter's Five force model can be applied to understand the external environment
of Facebook. Under this perspective, Facebook experiences moderate rivalry in terms of
competition; since advertisers have several platforms to choose from. On the other hand,
suppliers possess average power, while Facebook shares a moderate substitution threat since
advertisers can utilize different media (Shukaev, 2019, p6). Lastly, the firm experiences
minimal entry threats due to the difficulty of amassing users.
Lastly, one of the complex problems experienced by Facebook has been how to
counter competition rivalry. For instance, after the presidential election in 2016, the company
faced negative coverage that lasted for two years (Helmond, Nieborg, and van der Vlist,
2019, p2). Interestingly, Facebook did not decrease its active users or its huge business

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partners network as expected (Helmond, Nieborg, and van der Vlist, 2019, p2). Strategic
management has been one of the significant business frameworks that Zuckerberg has
utilized to hold some of the complex problems. The Facebook CEO has successfully laid out
strategic missions and objectives, which have helped the firm maintain its competitive
advantage (Helmond, Nieborg, and van der Vlist, 2019, p3). Thus, regardless of the
challenges faced, Facebook remains the most popular social network.
C. The Strategic Tools or Models Used by The CEO of Facebook
Zuckerberg has used two primary techniques, namely intensive growth and generic
strategy, to improve the organizational performance of Facebook. Specifically, these two
strategies have helped the firm maintain its competitive advantage regarding accessibility and
efficiency of services from online social networks (Greenspan, 2018). Michael Porter's theory
can be used to understand the generic strategy of competition. According to the model, every
company has a strategic direction and approach for business growth (Greenspan, 2018). In
this regard, Zuckerberg has adopted a generic strategy that guarantees a competitive
advantage and development through the features of a social network. In addition, the
approach ensures easy access to different platforms to capture a more significant percentage
of the market (Greenspan, 2018). Thus, Facebook has been able to address the competition
from firms like Snapchat, Twitter, and Google with a significant position in the sector of
online advertising (Greenspan, 2018). One of the effective generic strategies employed by
Zuckerberg is cost leadership. This entails minimizing the cost of executing business
(Greenspan, 2018). The strategy has enabled Facebook to offer different online services
worldwide. For example, the company utilizes computing technologies to increase the
efficiency and performance of its websites in social networking (Greenspan, 2018). Lastly,
Facebook can easily reach different internet users throughout the global market.

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Furthermore, the intensive growth strategy has also played a significant role in
improving Facebook's organizational performance. One of Zuckerberg's primary strategies of
growth is market penetration (Helmond, Nieborg, and van der Vlist, 2019, p7). The main
objective here is to increase the market share of the company. For instance, Zuckerberg has
formed alliances with different telecommunication firms to increase the number of users who
benefit from the services offered by Facebook (Helmond, Nieborg, and van der Vlist, 2019,
p7). Thus, to achieve this growth and offer the best service Facebook has been forced to
enhance its organizational performance. Another important strategy employed by Facebook
for growth is market development. The strategy focuses on joining new markets (Helmond,
Nieborg, and van der Vlist, 2019, p8). For instance, Zuckerberg has approached different
governments for coordination to permit their Citizens to use various social network services
offered by Facebook (Helmond, Nieborg, and van der Vlist, 2019, p8). This has enabled the
firm to improve its organizational performance to meet the global market's needs. Zuckerberg
has also used diversification to intensify growth by establishing new businesses. For example,
he bought Oculus VR to provide virtual reality technology that complements services in
social networking (Helmond, Nieborg, and van der Vlist, 2019, p8). Notably, this has
significantly improved the organizational performance of Facebook.
D. How Zuckerberg Created, Developed, and Designed Strategic Planning
Zuckerberg developed Facebook with a straightforward mission, making the world
more connected and open. Thus, to achieve this, he had to design and develop a strategic plan
that would help actualize his mission. The first step of the strategic plan was to increase the
global community enjoying Facebook's social networking services (Lynch and Coleman,
2018, p11). However, to connect the whole world meant that every individual needed to have
access to the internet. Hence, part of Facebook's business strategy involves ensuring every
individual is connected to the internet (Lynch and Coleman, 2018, p11). Specifically,

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Zuckerberg has been part of several campaigns worldwide to ensure that every individual has
an internet connection. Another essential step of Facebook's business strategy is expanding
into different social networking platforms (Lynch and Coleman, 2018, p8). In order to
achieve this, Zuckerberg embraced diversification and acquisition strategies. Specifically,
Zuckerberg came up with a plan to help his company remain relevant in the technology
market. Thus, he has bought several startup firms like WhatsApp and Instagram to expand
Facebook in the social networking sector (Helmond, Nieborg, and van der Vlist, 2019, p10).
In addition, diversification was an important strategy to include in Facebook's strategic plan.
Specifically, Zuckerberg was looking to venture into a field that would complement social
networking, and virtue reality was the best option. Notably, Zuckerberg was focused on
coming up with a strategy that meets the company's objectives.
Additionally, given Facebook's line of work, Zuckerberg understood the firm was
prone to different problems. For instance, one of the significant problems experienced by the
firm was how to include every in its user base. According to Zuckerberg, over seven billion
individuals are across, but almost four billion people do not have access to the internet
(Helmond, Nieborg, and van der Vlist, 2019, p11). Thus, there is a need to close this gap and
create opportunities for this percentage that has been left out. On the other hand, Zuckerberg
took it upon himself to break down the wonky and messy challenges into manageable
problems (Ray, 2012, p10). Notably, he has been able to develop strategic planning that
enables the company to generate data that is accessible and cheap; hence, individuals from
developing countries can afford it. In addition, Facebook has simplified its content to ensure
that everybody understands it regardless of their education status. Zuckerberg has tried to
ensure that Facebook services are accessible to the poorest person in society. Lastly, the
SWOT analysis model can be applied to understand how Zuckerberg developed, created, and
designed the strategic planning for Facebook. The model involves weaknesses, threats,

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opportunities, and strengths (Latief, Asniwati, and Akram, 2021, p4). Thus, to develop
appropriate strategic planning, Zuckerberg needs to consider these factors.
E. Different Contemporary Strategic Issues in Strategy
Strategy plays an essential role in the growth and development of a company. However,
several contemporary issues affect strategy in any business. The first contemporary strategic
issue is innovation. Notably, innovations in the management system and organizational
structure comprises new cooperation and coordination approaches (Stukalina, 2017, p5). In
the case of Facebook, innovation had been a significant issue of concern. Specifically,
innovation has pushed the company to get into collaborations and alliances to meet
customers' emerging needs. For example, the move by Facebook to partner with HTC and
develop a Facebook mobile phone was meant to counter the rising innovation of mobile
gadgets (Stukalina, 2017, p6). In addition, innovation is associated with the changes adopted
by an institution to fit into the existing market. Another contemporary issue is technology,
whereby the rate of technological improvement is exponentially high (Stukalina, 2017, p7).
As a result, technology capital investment has become an essential asset in different
businesses. For example, the move by Facebook to venture into virtue reality is a result of the
need to be part of the next-generation technology. Information overload is also a significant
contemporary issue in strategy. Existing research indicates that nothing is growing faster or
charging more than information (Stukalina, 2017, p 8). Estimates suggest that as of 2010, the
worldwide internet traffic was at around exabyte twenty-one a million terabytes (Stukalina,
2017, p8). Hence, it is inevitable that information overload significantly impacts Facebook's
daily activities.
Accordingly, the Innovation and resource-based perspective can be used to understand the
contemporary issues affecting strategy in Facebook. Innovation has been noted as one of the
significant issues that influence the activities and changes experienced by Facebook

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company. According to the competitive advantage resource-based theory, the long-term
success of an organization's innovation is dependent on its internal resources (Grant, 2019,
p5). The theory argues that internal resources allow a company to be competitive with its
competitors (Grant, 2019, p5). On the other hand, innovation contributes to the company's
financial performance in the market. According to this perspective, innovation is an
evolutionary procedure influenced by the firm's desire to improve financial performance
(Grant, 2019, p6). Thus, innovation has contributed significantly to the success of Facebook
as a company and social networking platform. As noted by the theory, its enormous internal
resources have facilitated Facebook's capability to be innovative. Thus, the growth of
Facebook has been a result of different individuals being creative and developing new ideas.
Lastly, through Innovation, Facebook has discovered new capabilities and interests in the
technology industry.
Corporate Examples and Literature
Monetizing and acquiring new firms has been one of the most successful strategies
adopted by Facebook. Notably, the strategy has helped Facebook avoid decline and leverage
its strengths. In addition, the approach has allowed Facebook to offer valuable services by
joining adjacent areas of social networking. Apart from Facebook, several other firms have
used the strategy successfully. One of the significant acquisitions that has occurred is
Vodafone by Verizon. Specifically, the deal that happened in 2013 saw Verizon acquire the
wireless division of Vodafone (Lewis, 2022). This deal helped the two companies end a
fraught relationship between them for a while as a result of the control of the wireless
division (Lewis, 2022). Another firm that has used the acquisition strategy is salesforce,
which acquired slack, a software company (Lewis, 2022). Thus, the acquisition has helped
several firms broaden their investments and end the business rivalry.

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Diversification has also been an essential strategy in the growth of Facebook since the
firm has been able to venture into different fields. For instance, the firm has ventured into the
mobile industry and virtue reality to expand its service base. In addition, the strategy has
helped the company to grow its expertise in the adjacent social networking market. An
excellent example of a company that has grown significantly due to diversification is
Amazon. The firm is noted as one of the biggest online stores in the world (Izquierdo, 2022,
p4). Amazon has ventured into the retail of almost every product; it sells books, electronics,
groceries, and any other household commodity one would require (Izquierdo, 2022, p4).
Diversification has contributed to the significant growth of the company's net worth since it
has its presence in every market (Izquierdo, 2022, p4). Thus, diversification is an appropriate
strategy for growth since it enables a firm to venture into different services and products,
increasing its market base.
Suggestions/ Recommendations.
Given the success that Facebook has enjoyed over the years, Zuckerberg has a huge
task to maintain the firm's current state into the future. Thus, he has to set goals that ensure
the firm remains relevant and keeps its pace of growth. First and foremost, Facebook should
concentrate on enhancing its public appearance as a socially conscious and secure platform.
Since the platform has experienced several cases of hostile critics, this will help clear the air
and control such criticism. In addition, Facebook needs to continue monetizing other
platforms like WhatsApp and Messenger. Due to their vast user base, the media can turn into
significant sources of revenue for the firm. Facebook should also focus on re-affirming its
commitment to security and privacy to ensure it wins back the trust and support of the public.
The firm should also focus on developing a payment method, like the one for YouTube; this
will attract more users and increase its sources of revenue. Given its popularity, Facebook
should venture into the manufacture of self-phone; since it already has a ready market for its

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products. In addition, since Facebook's platforms operate on computers and mobile phones,
the firm should invest in cybersecurity to ensure security.
Additionally, the firm should focus on software and hardware development since it can
venture into this field. Facebook should focus on developing an app that caters specifically to
the needs and desires of the younger generation. This helps grow an innovative young
generation since they can share ideas and understand one another. Facebook should also
consider including games that attract children to ensure it covers everybody in the population.
Given that the company has ventured into the virtue reality business, it should focus on
integrating the technology into its line of work. Specifically, the company should develop a
method of digital connection using the virtue reality. Lastly, Facebook should not stop its
campaign of ensuring every individual is connected to the internet throughout the world.
Specifically, such a campaign plays a significant role in reducing illiteracy around the globe
and increasing connectivity to better people.

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