Analyzing Competitive Strategies and SWOT Analysis

The assignment requires analyzing a list of references related to PESTLE analysis and strategic management, including SWOT analysis and competitive strategies. The references cover topics such as Facebook's business strategy, anticoagulation management in atrial fibrillation, e-commerce industry in Bangladesh, and more. The goal is to understand how these frameworks are applied in different industries and contexts.

INTRODUCTION TO
BUSINESS
ENVIRONMENT
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Table of Contents
INTRODUCTION..............................................................................................................................3
1. PESTLE Analysis for Facebook................................................................................................3
2 .Porter's Five Forces on Facebook..............................................................................................5
3.Facebook's Resources, Capabilities and Competencies:.............................................................7
4. SWOT analysis of Facebook......................................................................................................8
CONCLUSION:...............................................................................................................................10
REFERENCES:................................................................................................................................11
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INTRODUCTION
Facebook that was founded by Mark Zukerberg can be assessed by large number of devices
and is facing many challenges including micro and macro environment. People on facebook share
their views, ideas, pics and provide ads to expose their companies and products. Nowdays,
Facebook Messenger, Whatsapp and Instagram have become popular means to connect with each
other. Daily activities of many companies are updated on websites and advertised on Facebook. It
has become a major source of conversation in between individuals (Bischoff, 2016). Online media
plays a major role in marketing and grabbing new customers with showcasing innovative products
and services of organizations. It is a kind of station where companies and general people all around
the world meet and share their ideas, emotions and feelings. But it is facing various external and
internal challenges currently. In EU, it is facing the problem of General Data Protection and
regulation due to some policies. There is also saturation in ads of news feed in recent years. Thus,
it cannot depend on increasing the demand for longer period. There are other competitors like
Whatsapp and Instagram due to which it is facing problems in generating revenue through ads.
This report shows the way stakeholders, policies and other factors affect Facebook internally and
externally.
1. PESTLE Analysis for Facebook
Facebook conducted PESTLE analysis to identify macro factors affecting its performance.
It is one of the finest players in international social media market and has ability to maintain its
reputation through brand development, popularity, research and development as well as investment
(Chataway and Lichten, 2016). Through this, it has been ensured that its strategies are needed to be
improved and adjusted in an effective manner. It is facing prime competition to other competitive
firms like Snap chat, Twitter, etc. Therefore Porter's Five Forces Model is analysed to strengthen
its competitive benefits and support growth and development.
Political Factors Influencing Facebook's Business
Political landscape is attached to Facebook's business. Business shape due to political
movements and PESTLE analysis influence company's operations. Some political factors are
considered as opportunities while some are threats. In developed countries, it is stable and due to
globalization, government support is required which are benefits for Facebook. In Chinese market,
political barriers exist and sometimes, political actions are taken through online data. These
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opportunities help Facebook Inc. to diversify and expand its business. Its potential growth is not so
high and is restricted due to Chinese censorship. It shows advertising services through
governmental support. Data privacy and security have been increased by displaying advertising
market in different countries.
Economic Factors Important to Facebook Inc.
Some economic factors include rising stability in developed countries and rapid economic
growth of well-flourished nations which are some opportunities for Facebook and lead to
improvement in infrastructure and telecommunication (Culp III and et.al., 2016). In developing
countries, increase in disposable incomes improves capacity of users to purchase and access its
services. Thus, through market penetration, multinational operations are conducted which generate
opportunities for Facebook Inc.
Social or Socio-cultural Factors affecting Facebook's Environment
Global reach and Facebook's popularity are also influenced by social conditions.
Company's trends and other changes impact its environment which are determined by PESTLE
analysis. High quality services are highly preferred and online purchasing is also considered by
users. They get different varieties of products and services. Many users share their ideas, views
and make payments online which is a secured way of buying products. Support for corporate social
responsibility is increasing and public is focussing on good quality of services (Dey, 2016). Thus,
clients are satisfied and it retains them by displaying advertising services. Various other
opportunities are available to bring companies sales at optimum level. It offers a better
marketplace for generating social networking sites and other relevant apps.
Technological Factors for Facebook's Business
It is clear that Facebook Inc. was founded on online technological terms. It indicates
company's macro environment and affects in various ways. There is much increase in mobile
devices by individuals at home, companies, corporate places, etc. This is an opportunity for the
firm. While, online retail firms are diversified and there is significant increase in number of online
social media firms (Lichten and et.al., 2015. These factors have adverse effect on Facebook Inc.
Through mobile apps, user experience can be improved. Moreover, PESTLE forces faces
challenge on the basis of increasing competition as more users are attracted from company's social
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media services. This leads to market saturation. But Facebook is focussing on retaining its
customers by displaying its advertising services.
Environmental Factors affecting Facebook
Natural environment partly affects Facebook's social media business. Opportunities in
section includes increasing focus on business sustainability and increment in the standards of
disposal waste. On the other hand, climate change comes in both threat and opportunity. Natural
environment concerns can be satisfied by enhancing sustainability in its business (Nahid and
Ahmed, 2018). It also forces implementation for waste disposal policies and other corporate
operations. However, prompt climate change could result in transfer of servers to other locations.
Legal Factors Affecting Facebook Inc.
Regulatory support for free Wi-Fi and improving patent laws globally are some
opportunities. On the other hand, rules and regulations have increased on online data and in China.
Facebook has opportunity to introduce new and fresh products which are based on patent laws. It
is facing severe bans in China.
2 .Porter's Five Forces on Facebook
Porter's Five Forces influence Facebook Inc. and evaluate its external factors and
company's environment. Being one of the biggest international online firms, it enjoys popularity
and high amount of revenues among advertisers and users. Like this, its mission and vision
statements are fulfilled and it ensures position in the competitive market. Porter's five forces
focuses on customers and substitutes as the powerful forces which rely on external forces in social
media business (Naji, 2016). Company should satisfy its customers to reduce its negative effect
and retain its position in the market. Many factors described below influence its business:
Competitive Rivalry with Facebook
Being a leading online social media firm, Facebook experiences hard competition. There
external forces which results in moderate competitive rivalry opposite to the company. For
example: YouTube LLC provides online advertising service and is a subsidiary of Google LLC.
There are small amounts of firms which comes under weak force and offer display advertising
services similar to Facebook Inc. Thus, it is a weak force against Facebook. Variety of advertisers
are attracted by these firms and implement moderate force in company's environment.
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Facebook's Customers Bargaining Power
Customers impart force on Facebook depending on their demands. Porter's five forces
examine customers or buyers effect on online display of advertising industry. Availability of high
substitutes, low switching cost of products and high demanding power of buyers are some factors
which affect Facebook Inc. its services are provided to users or members which primary becomes
the sources of revenue generation. Advertisers use substitutes that are huge in amount. For
example: targeting audience customers can advertise on television, radio and print media instead
on Facebook (Putz and Petrisor, 2018). Low switching cost puts negative effect on business and
pulls away customers from social networking websites, mobile apps and services. Bargaining
power of customers are weakened by high demand for the online advertising. All these factors
ensure Facebook's competitive advantage and offers priority to customers.
Facebook's bargaining power of Suppliers
Facebook's suppliers are the main factors that display advertising services and social
network. This component shows industry's environment and describes supplier’s effect firms.
There are some factors which lead to weaken the bargaining power of suppliers which include
huge amount of overall supply of resources, large amount of suppliers which is a weak force and
moderate size of suppliers. Network technology and servers include Facebook's supplies which are
available from many manufacturers. It is however an external force which is weak in nature.
Suppliers arranged in large amount are also considered as weak forces for Facebook. But analysing
five forces, suppliers are negligible issue in the field of online advertising and social media
environment (Rothaermel, 2016). However, its relationship between suppliers can be improved
through suitable strategies for further supply chain management. Facebook's corporate social
responsibility is contributed by these strategies which fulfil other stakeholders and suppliers.
Threat of Substitution
Facebook's business is probably reduced by substitutes and it generates challenges in the
online social media environment. Various factors lead to powerful threats against Facebook Inc.
that includes availability of high substitutes which is a strong force, low switching costs and,
moderate costs of substitutes. Advertisers can easily for substitutes like for print advertising,
television, radio instead of Facebook's media adverting. Substitutes available in huge amount
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adversely affects industry. Some substitutes like television advertising are pricy than Facebook
advertising services.
Threats of New Entrants against Facebook Inc.
New entrants put negative impact on new entrant in the industry. Factors such as brand
development done at high cost, high price of customer loyalty and low switching costs are strong
and weak forces that work against Facebook (Sarwar, Ramachandran and Hosseinian-Far, 2017).
New competitors affect Facebook Inc. in a negative way and low switching costs of advertisers
pulls them from one service provider to another. It is tough to create a reliable and popular social
media similar to Facebook. However, based on five forces of porter’s analysis, new threats are
minimal content for strategic formulation of Facebook.
3.Facebook's Resources, Capabilities and Competencies:
Facebook which is popular and largest social networking online website globally not only
focusses on data processing and social media area. It is having access of over 1 billion active users
that built up business model to collect information and thus generate money from it. Most
important resources of Facebook are its users. Entire Facebook is running on its active users which
all the time browse websites for their personal use. Its main goal is to bring people together and
build healthy community (Schuetz and Schrefl, 2017). People from various countries are
connected through Messenger, discover what's new happening in this world, update themselves
and share photos, pics and relevant ideas. Companies find Facebook as a platform for advertising
service. Its internal resources are workers, users, management and business culture. These features
impact business environment and design management system. Modifications in management and
culture, employee's spirit and financial concerns establish tactical preparations and goals. These
factors define Facebook's competency and strength. Core competitors of Facebook are Snap chat,
Instagram, LinkedIn, Google and Twitter.
Facebook faces Instagram as a largest competitor which is followed by teenagers and
youngsters. This online website is private and more simple. Thus, it is competing for revenue
generation. But teenagers are more connected on Facebook and can express themselves. Snap chat
selects only few people and is quite popular. It allows people of all ages and maintains a level of
privacy and pics can come up after. While, Twitter and Google are strong competitors of Facebook
and have captured its users and are direct competitors. They rely on revenues generated through
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advertisements. Engagement rates of brands can no longer be manipulated in which comment,
share and like on a post is there. Number of second a user depends on every post which is
measured by Facebook (Stegemann, Kruse and Ober, 2017). Its capabilities are providing
notifications, updating websites, events, commenting, sharing and posting videos. It measures the
content which has completely loaded and indicates the time spent so that lengthy articles are not
ranked at high positions. Audience read relevant, timely and valuable content. Facebook differ
metrics and behaviour of video. It calculates actions as metrics of success in which the person's
time is measured in watching the video no matter the sound is on or off. It is high definition if the
video is full screen. People like reading effective articles of publishers and Facebook experiences
this by measuring how many times people watch posts from the same source.
Friends request is one of the most common feature of it. Through this people from different
area, region or country get connected and share their pics and messages. Additionally, if a person
doesn't like another then he/she can decline friend's request (Szydlowska, 2017). 'Likes' and
'reactions' are other capabilities of Facebook in if a person likes pics of another then he/she can
press on like button. It moves with videos, advertisements, status updates and photos. For research
activities it is a better deal for providing information. Business plans, marketing,
recommendations, opinions, can be discussed freely on Facebook. It is protected from
inappropriate marketers and criminals. People get online solutions and company's built customers
and prove their online presence through social media sites by conversing with their customers,
updating knowledge of their products and gets feedback through surveys. Videos and photos are
uploaded and Facebook generates revenue in huge amount. Facebook faces challenge from other
search engines but has a dedicates team which design and continues with backlinks, sharing and
quality content. It has developed messenger to make conversation in simpler way.
4. SWOT analysis of Facebook
Facebook is one of the largest social networking sites that has lots of users in all over the
world. Main aim of this social site is to connect all the world. But there are many macro, micro and
internal factors that are affecting strengths, weakness, opportunities and threats related to
Facebook has its dynamic external and internal strategies which helps it to run its departments
properly (Widya and et.al., 2018). In global market it is leading player and SWOT analysis
identifies and supports company's leadership skills and threats in online media business. Its major
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threats are Google Llc, Twitter, Snap chat which are slowly gathering customers from every corner
of the world.
Strengths:
Many features have been added to it to attract more and more users. Applications have
been launched so that this site can be operated easily by users. With the ease use of applications
about m ore than one million active users are participating every month across the world( Brooks,
Heffner,and Henderson,2014.). People can connect to each other by using computer, mobile
phones. Application that is launched by Facebook has facility of different languages' translator so
that users can communicate easily. More than 70 Languages have been scripted in it. Facebook
takes care the requirement of users by evaluating their ideas, choices and behaviours. Innovative
employees, strong brand image, huge amount of user base are some strengths of Facebook. Its
popularity lies in its branding. Its large amount of user base is its core strength. Thus, its maintains
its attractiveness and competitive advantage.
Weakness:
Facebook has lower advertisement profits than an average website. But now it is increasing
the rate of advertisement on the wall posts that is approx 6% without interfering the users. These
media are also lacking with some of its features but in current scenario it has been updated like
video chats, group chats and many more. The ratings and revenues are dependent upon the users.
More than 80% of the revenues are earned by the advertisement that are viewed by the
users(Rutsaert Pieniak,Verbeke,and et.al.,, 2014.). Users are not allowed to customize the sites
according to their needs and require. Google + has more features to customize the personalization
themes than Facebook. This is one of reason that users are moving towards Google+. Privacy
protection is one the weak pillar of Facebook. The informations are stolen by other sites.
Opportunities:
There are about more than 600 million users who are using Facebook through mobile
devices. Due to this mobile advertisements are displayed with Facebook features, this may lead in
increase of firm's income. The expansion of Facebook in china market would be a great market
place for it. Facebook has a great opportunity to open its own marketplace globally with so many
users in all over the world(De SalveDondio,Ricci, and et.al., 2016). This would be helpful in
boosting its revenues and cost. Innovation in products, market penetration and development and
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business diversification are some opportunities for it. These external factors are being exploited by
it. For example Facebook acquired Oculus which is one of the finest social website.
Threats:
With a huge number of users it is maintaining a big market of advertisements so it is
necessary to maintain it in future because if it will decrease the revenues of Facebook will fall
down. Ad block extensions are used by educated users that block the displaying of advertisements
on wall post. Gradually if this would be increased by users, it may create a problem for it. Privacy
protection of users are the common issues that has been complained. Personal information are theft
by other and it is misused. Many unwanted activities are performed that cause social
embarrassment too. New growing social network sites with different and unique features are
creating competitions for it(Einwiller and Steilen2015. ). Due to ad block extensions, the online
advertisement rate has been slowed down by different businesses. Its major threats are market
saturation, cybercrime and imitation. Many firms have developed sites relevant to Facebook and it
has probably reduced its market share. It is now attracting cybercrime targets. Patents and
copyrights can easily be stolen with increasing membership. It is important to enter into new
business with related technologies and innovative products.
Thus, through SWOT analysis market position of Facebook can easily be analysed.
Number of issues are addressed and verified to maintain its development and grwoth.
CONCLUSION:
Finally, it is concluded that, Facebook goes with SWOT, PESTLE and Porter's five forces
which describes its opportunities, threats, weaknesses and core strength. Its strength lies in
gathering more and more users. It environment and culture is healthy and inspiring. Its vision and
mission lies in collecting people of the world on a single platform. Though it faces various
challenges and competitors. Yet it is prime choice of every user in the world. Its various features
attract varieties of customers in the world. It is the base of communication for various companies
and share its information by launching various features. Company's status is maintained from its
branding and revenue generation. Its investment is based on research and development and it also
negotiates with government to survive in market. It believes in diversification of market and hab
developed a platform for advertising services. Though it has to face cyber crime but then too it has
proved its presence in the market.
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REFERENCES:
Books and Journal:
Bischoff, A.L., 2016. Porters Five Forces. Innovation through Business, Engineering and Design:
How does rivalry in a market as well as customer expectations influence the process of a
design concept from a business perspective?. GRIN Verlag.
Chataway, J. and Lichten, C., 2016. The future of anticoagulation. Future cardiology. 12(1). pp.5-
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Culp III and et.al., 2016. Using a SWOT Analysis: Taking a Look at Your Organization [2016].
Dey, K., 2016. The fast food industry in the UK. Analysis of McDonalds with PESTEL, VRIN
and Porter's Five Forces.
Kaur, P., 2016. Winning strategies and swot analysis of facebook. Asian Journal of
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Lichten and et.al., 2015. The future of anticoagulation management in atrial fibrillation in Europe:
An assessment of today's challenges with recommendations for the future. Rand health
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Nahid, M.H. and Ahmed, R., 2018. Facebook Pages vs Websites: A Dilemma for E-Commerce
Industry of Bangladesh. Journal of Applied Management and Investments, 7(1), pp.61-69.
Naji, J., 2016. Old Town Temecula Market Analysis and Recommendations.
Putz, M.V. and Petrisor, I., 2018. DYNAMIC STRATEGIES FOR ECONOMIC AND
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Rothaermel, F.T., 2016. Competitive advantage in technology intensive industries. In
Technological innovation: Generating economic results.
Sarwar, D., Ramachandran, M. and Hosseinian-Far, A., 2017, January. Disaster Management
System as an Element of Risk Management for Natural Disaster Systems Using the PESTLE
Framework. In International Conference on Global Security, Safety, and Sustainability.
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Schuetz, C.G. and Schrefl, M., 2017, November. Towards Formal Strategy Analysis with Goal
Models and Semantic Web Technologies. In International Conference on Conceptual
Modeling.
Stegemann, T., Kruse, L.H. and Ober, D., 2017. Radioactive Tracer Feeding Experiments and
Product Analysis to Determine the Biosynthetic Capability of Comfrey (Symphytum
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Szydlowska, K., 2017. International Business of the Airline Industry. Strategic Alliance and the
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Widya and et.al., 2018. A PESTLE Policy Mapping and Stakeholder Analysis of Indonesia’s
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De Salve and et.al., 2016. The impact of user’s availability on on-line ego networks: a facebook
analysis. Computer Communications. 73. pp.211-218.
Einwiller, S. A. and Steilen, S., 2015. Handling complaints on social network sites–An analysis of
complaints and complaint responses on Facebook and Twitter pages of large US
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Rutsaert and et.al.,, 2014. Social media as a useful tool in food risk and benefit communication? A
strategic orientation approach. Food Policy. 46. pp.84-93.
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