Managing Digital Enterprise: Strategies and Business Models of Facebook, Twitter, WhatsApp, and Snapchat

This report discusses the business models and strategies of Facebook, Twitter, WhatsApp, and Snapchat. It also highlights their competitive advantages and weaknesses. The report provides insights into how these platforms provide customer value and generate revenue.

Running head: MANAGING DIGITAL ENTERPRISE
MANAGING DIGITAL ENTERPRISE
Name of Student
Name of University
Author’s Note

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Table of Contents
Introduction..........................................................................................................................2
Discussion............................................................................................................................2
Facebook..........................................................................................................................2
Twitter..............................................................................................................................3
WhatsApp........................................................................................................................5
Snapchat...........................................................................................................................7
Conclusion.........................................................................................................................10

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Introduction
Numerous social networking sites are present that help people across the globe in various
ways. Various social networking sites include Facebook, WhatsApp, Twitter, Snapchat, We Chat
and many more. All these sites have their own business models and business strategies that are
followed by them in order to meet their business goals. The assignment refers to four sites,
namely Facebook, Twitter, Snapchat and WhatsApp. The assignment describes regarding various
strategies that are utilized by the sites in order to provide their services effectively and in an
efficient manner. It further discusses regarding the type of competitive advantage pursued by
these sites.
Discussion
Facebook
Since the time Facebook has started, it had upgraded its business model according to
customers as well as business needs. Presently the business model of Facebook constitutes of
various organizations such as Atlas, Facebook Payments Inc, Instagram, Parse, Onavo, Moves,
Oculus, LiveRail, WhatsApp and Masquerade (Bourgi, 2019). The model constitutes of several
services like messenger, Facebook.com, Workplace, marketplace, moments, Instagram and some
more. The main strategy of the organization includes earning revenue through their users, one
more strategy include usage of data for generating revenue from their targeted advertisements.
Most of the services provided by Facebook have been strategized in order to generate revenue
but some of them are utilized for generating data. The business strategy followed by Facebook, is

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combined along with a strong user base, provide the company with new avenues for the purpose
of monetization. This provides an intriguing as well was exciting time for their investors.
The business strategies utilized by the organization consists of various principles, these
principles include extensive as well as continuous focus on the experience of users, growth
through acquisitions, development of new products and continuously exploring various ways of
monetization (Dudovskiy, 2019). The competitive advantage that is perused by the organization
is lower cost, this is because the users do not require investing much in order to enjoy the
services provided by Facebook, and they just need access to internet and a smart phone. Inspite
of this, Google stayed the largest advertising company when compared to Facebook. Facebook
has been implementing new strategies for the purpose of threatening Google. The mobile
advertising of Facebook had been accounted for around 73%. The ad network of Google is
usually fragmented across numerous platforms, whereas the ad network of Facebook is mostly
found on the website as well as mobile app. In this case, Facebook is ahead of Google because it
faced issues in tracking their users across numerous platforms because of its dependence on the
PC tracking cookies that generally does not support on most mobile gadgets (Pahwa, 2019). The
strategies used by the organization has increased its revenue up to around $20 billion, this has
helps the organization for paying dividends, the absence of any bottleneck in their strategies has
helped them in paying them easily. The strategies used by Facebook are very sustainable and
help the organization in gaining a huge amount of revenue.
Twitter
The business model of Twitter is somewhat similar to business models of many other
social network sites. It requires the user to make a specific profile and hence the users would be
allowed to post short updates called “tweets” that must be under 280 characters (Riahsathe,

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2019). The registered users would be allowed to post various tweets but the unregistered users
are not allowed to post but just allowed to read them. Users can follow many more user accounts
present in the platform and they would be allowed to see the tweets posted by those accounts that
they choose to follow. Twitter has shifted its focus to their video content as well as content
creators because video requires higher level of engagement as compared to banner
advertisements or text (Sanso, 2016). In order to incentivize various video makers, Twitter had
shared revenue with them, here the creators are offered 70% of cut and the remaining is kept by
the organization. some major issues face by Twitter include smaller user base of competitors,
lower engagement of users, negative profits, performance of crippling stock market and an
overvalued stock.
Figure 1: Twitter Business model
(Source: Shaughnessy, 2016)
The business strategy that is used by Twitter includes selling its public data which is
called Firehose which amounts nearly 500 million tweets per day to numerous organizations.

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Companies are allowed to use this information for analyzing customer trends as well as
generating insights regarding brands as well as companies (Bartov, Faurel & Mohanram, 2017).
The major strategy followed by company includes allowing the companies to know regarding
their users in detailed manner. The main competitive advantage of Twitter lies in their
distribution of real-time data. This has helped it to gain more popularity compared to other new
agencies in the form of online news platform.
Twitter helps in creating customer value by allowing the organizations to carry out
sophisticated analysis, and allowing them to learn specific as well as detailed data regarding their
users. Data licensing is another way that helps the organization to increase customer satisfaction.
The business strategies have helped the platform in paying dividends by attracting more
investors who are willing to generate incomes (Laudon & Traver, 2016). The strategies help
them to pay fewer amounts of dividends along with maintaining their security. The business
strategies used by Twitter is not sustainable because it has faced negative profits almost every
year, its stock had fallen up to 60% in the year 2016, the share price of Twitter is considered as
overvalued.
WhatsApp
WhatsApp is a cross platform messaging application that previously had a subscription
model for their users, this was because of the renewal fee for annual revenue, and this fee was
rarely paid by the users. The fee was auto renewed when the subscription ended. This was known
as average revenue per user (Bhasin, 2017). Presently WhatsApp does not follow any business
model of its own, it is now a part of Facebook that carried out the entire process of money
making and WhatsApp has just been a specific business unit that does not generate even
minimum amount of money.

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WhatsApp follows a basic business strategy which includes connecting people with each
other using a messaging application, WhatsApp allows the users to share any form of data among
themselves including messages audio, video, images, and documents along with various
contacts. This platform follows various connection nodes between the users; these nods include
chat, multimedia, calls, group chats and many more (How does WhatsApp Make Money, 2016).
The platform follows a rule called “if you’re not paying for the product or the service, you’re the
product”, using this rule, the platform makes money from customers, their data, their interests,
their content cravings, their constant touch with their display devices and many more. The
competitive advantage provided by WhatsApp includes its usage by the customers, around 60
billion messages are delivered on daily basis, and this proves that it is used globally. For various
businesses such as banks that require sending time-critical alerts, the immediacy of the
application makes it an excellent option for the organization (Study of WhatsApp Business
Model and Durability, 2017). Users can customize various features of WhatsApp which cannot
be done in most of the other platforms.
WhatsApp provides superior customer value because customers are allowed to use it
without paying monetary value for it, it provides cheaper as well as better alternative for the
customers for sending messages to each other without paying for MMS or SMS (Clauss, 2017).
This software is an IP based, hence in order to use it; the users only need a WiFi connection or a
specific plan for data access. The strategies that has been followed by WhatsApp has helps the
platform to pay its dividends in the form of stocks. These dividends are paid in the quarterly
basis and the platform considers that the stakeholders are provided with equal dividends.
Weaknesses of business strategies used by WhatsApp include the concern regarding data
privacy of the users; the data privacy is a continuous problem for the users. The platform has not

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been able to provide a loophole free solution for the users. One more weakness of this platform
include the failure of the platform without access to internet, internet is the major necessity for
the application to function, a huge number of population that do not have the access to internet
are unable to use it (Svee & Zdravkovic, 2016). Group calls cannot be performed in this
application. From various strategies used by WhatsApp, it can be said that they are sustainable in
nature.
Snapchat
The main feature of business model followed by Snapchat includes its revenue source
which advertising. Unlike the business model of Twitter, the company does not prefer selling any
information belonging to its users. The team that deals with designing the consumer products
also creates advertising products (Snapchat’s Competitive Advantage may not be what it thinks it
is, 2017). This results in advertisement that is user friendly as well as camouflaged. This feature
of the business model is copied by Facebook as well.
The business strategies that are utilized by Snapchat include Snapchat exclusive
promotions, using this strategy the users are allowed to post users are allowed to include
occasional discounts or various coupon codes (How does Snapchat make money? Snapchat
Business Model, 2018). One more strategy followed by the site includes day-to-day snap. This
strategy increases their business as well as knowledge regarding their services. Snapchat has
based its strategy on the high speed routine innovation for staying ahead of their competitors;
however Facebook creates an unparallel network effect for seeding growth. The copycat
approach of Facebook has paid well; on this matter a design engineer had mentioned that
“Stories are a format rather than an app”, this implies that Facebook has added those features as a
way for enhancing the UX in their application.

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Ways by which Snapchat provides customer values by allowing the customers to create a
sponsored lens. Snapchat provides numerous filters to the customers that help them in creating
interesting images instead of posting a basic picture (Linder & Williander, 2017). The users can
make the users black and white, apply any filter for changing their eyes into abnormally large or
disappear their nose and many more. Snapchat does not pay any dividends through its strategies
because their strategies include loopholes that have resulted in a huge loss for the site. They have
lost around 500 million dollars in the year 2016. Due to this there sole aim would be turn a profit
along with monetizing their products. They cannot distribute their dividends.

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Image 2: filters in Snapchat
(Source: Sanso, 2016)
Weaknesses of this site include the complex features that are a part of the application,
they use complicated mechanisms as well, and it is not user friendly. The user are not allowed to

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see people’s story if they have not added them, this results in a weakness for the site. This is one
of the reason which leads to downfall of the site (Bartov, Faurel & Mohanram, 2017). Snapchat
can never be used for the purpose of carrying out a business, whereas other sites like Facebook
and Instagram can be utilized for business purposes. These factors prove that the business
strategies used by Snapchat is not sustainable.
Conclusion
From the above report it can be concluded that there are numerous social media platforms
like Facebook, WhatsApp, Snapchat, twitter, line, hike and many more. These social media
platforms make use of strategies that are sometimes unique in nature and sometimes are similar
to the strategies followed by other platforms. Four social media platforms have been chosen for
this particular report, the platforms are Facebook, Twitter, Snapchat and WhatsApp. This
assignment discusses regarding various business models that are used by these platforms for their
individual businesses; they also follow different strategies in order to satisfy their customers.
This assignment further discusses regarding the ways by which these strategies are used for
customer satisfaction. It also points out the weaknesses of these business strategies.

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References
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