PESTLE and SWOT Analysis of Crypto Currency
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Running head: STRATEGIC ANALYSIS
STRATEGIC ANALYSIS
Name of Student
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STRATEGIC ANALYSIS
Name of Student
Name of the University
Author Note
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1STRATEGIC ANALYSIS
Table of Contents
Introduction..........................................................................................................................2
Discussion............................................................................................................................2
Facebook external environment.......................................................................................2
Crypto currency strategic intent.......................................................................................5
Crypto currency barriers to entry.....................................................................................6
References............................................................................................................................7
Table of Contents
Introduction..........................................................................................................................2
Discussion............................................................................................................................2
Facebook external environment.......................................................................................2
Crypto currency strategic intent.......................................................................................5
Crypto currency barriers to entry.....................................................................................6
References............................................................................................................................7
2STRATEGIC ANALYSIS
Introduction
Strategic analysis refers to analyzing the external environment of an organization for the
purpose of determining the strategic planning of the organization which will further lead to
smooth functioning of the organization. There are different tools for carrying out the strategic
analysis of an organization such as the SWOT analysis, PESTLE analysis, Porters five forces and
many more. Moreover strategic analysis is also important because it can help in carrying out
strategic decision making of the company through identification the opportunities and threats of
the company (Crossan, Fry and Killing 2004). The company selected for the purpose of this
study is Facebook. The main aim of the paper is to carry out strategic analysis of Facebook. The
paper will therefore discuss about the environmental analysis of Facebook, its crypto currency
strategic intent and its crypto currency barriers to entry.
Discussion
Facebook external environment
In order to analyse the strategic positioning of Facebook, different strategic tools or
methods will be used such as the SWOT analysis and Porters five force analysis. SWOT analysis
is used for assessing the current position of a company by identification of its strengths,
weaknesses, opportunities and threats of a company (Pickton and Wright 1998).
Strengths
Facebook is one of largest and widely
used social media platforms
Good customers experience
Understands the behaviour and needs of
Weakness
Lack of proper attitude towards the
privacy of the users
The users information is not protected
properly
Introduction
Strategic analysis refers to analyzing the external environment of an organization for the
purpose of determining the strategic planning of the organization which will further lead to
smooth functioning of the organization. There are different tools for carrying out the strategic
analysis of an organization such as the SWOT analysis, PESTLE analysis, Porters five forces and
many more. Moreover strategic analysis is also important because it can help in carrying out
strategic decision making of the company through identification the opportunities and threats of
the company (Crossan, Fry and Killing 2004). The company selected for the purpose of this
study is Facebook. The main aim of the paper is to carry out strategic analysis of Facebook. The
paper will therefore discuss about the environmental analysis of Facebook, its crypto currency
strategic intent and its crypto currency barriers to entry.
Discussion
Facebook external environment
In order to analyse the strategic positioning of Facebook, different strategic tools or
methods will be used such as the SWOT analysis and Porters five force analysis. SWOT analysis
is used for assessing the current position of a company by identification of its strengths,
weaknesses, opportunities and threats of a company (Pickton and Wright 1998).
Strengths
Facebook is one of largest and widely
used social media platforms
Good customers experience
Understands the behaviour and needs of
Weakness
Lack of proper attitude towards the
privacy of the users
The users information is not protected
properly
3STRATEGIC ANALYSIS
the users and accordingly adds
accordingly such as it integrates with
other websites and social media
platform.
There is lack of website customization.
Opportunity
To improve protection of information
and users privacy
Expansion and investment
opportunities
Threat
Fierce competition from other social
media platforms
Identity theft
Therefore from the above SWOT table the strengths, weaknesses, opportunities and
threats have been understood. The company has the opportunity of improving user’s privacy and
also expansion opportunities such as in China. More the company has the threat of increased
competition from other social media platforms such as Whatsapp and Instagram and twitter.
Moreover users of Facebook may have to face identity theft as people can randomly create a
profile of another person and it mainly happens with celebrities.
On the other hand, Porters five force analysis is done to understand the competitive
environment of the organization. Through the porters five force analysis, the number and power
of the different competitors of the company can be known. The five forces include- competition
between firms within the same industry, threat of new entrants, threat of easy substitutes in the
market, the buyer power and the supplier power.
the users and accordingly adds
accordingly such as it integrates with
other websites and social media
platform.
There is lack of website customization.
Opportunity
To improve protection of information
and users privacy
Expansion and investment
opportunities
Threat
Fierce competition from other social
media platforms
Identity theft
Therefore from the above SWOT table the strengths, weaknesses, opportunities and
threats have been understood. The company has the opportunity of improving user’s privacy and
also expansion opportunities such as in China. More the company has the threat of increased
competition from other social media platforms such as Whatsapp and Instagram and twitter.
Moreover users of Facebook may have to face identity theft as people can randomly create a
profile of another person and it mainly happens with celebrities.
On the other hand, Porters five force analysis is done to understand the competitive
environment of the organization. Through the porters five force analysis, the number and power
of the different competitors of the company can be known. The five forces include- competition
between firms within the same industry, threat of new entrants, threat of easy substitutes in the
market, the buyer power and the supplier power.
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4STRATEGIC ANALYSIS
Figure 1: Porters five force analysis
Source: (Grundy 2006)
The porters five force analysis of Facebook includes the following- the competitive
rivalry of Facebook or the competition among the firms of the same industry is moderate. The
buyer power is strong, the supplier power is weak, the substitution force is strong and the threats
of new entrants are weak. The competitive rivalry is moderate because there is small number of
firms, the cost of switching is lower and there are moderate firm varieties in the industry. The
buyer power is higher because there are many substitutes of Facebook in the market (Mukherjee
2018). The supplier power however is weaker because large number of suppliers is there in the
marketplace. There is strong threat of substitution of Facebook because of other social media
platforms.
Figure 1: Porters five force analysis
Source: (Grundy 2006)
The porters five force analysis of Facebook includes the following- the competitive
rivalry of Facebook or the competition among the firms of the same industry is moderate. The
buyer power is strong, the supplier power is weak, the substitution force is strong and the threats
of new entrants are weak. The competitive rivalry is moderate because there is small number of
firms, the cost of switching is lower and there are moderate firm varieties in the industry. The
buyer power is higher because there are many substitutes of Facebook in the market (Mukherjee
2018). The supplier power however is weaker because large number of suppliers is there in the
marketplace. There is strong threat of substitution of Facebook because of other social media
platforms.
5STRATEGIC ANALYSIS
Crypto currency strategic intent
Strategic intent refers to the means by which organizations achieve its objectives or
vision. The vision of Facebook is to let people stay connected with their families and friends, to
know what is going on in the world and also to know to be able to freely express what matters to
people. The mission of Facebook is to empower people to build their community and also to stay
closer. In order to achieve its vision and mission, Facebook has decided to enter a new venture of
using crypto currency. Crypto currency is a type of digital currency that is usually used as a
medium of exchange between people and is used for providing security to the financial
transactions (Oxford Analytica). Facebook has proposed the use of Libra as the new crypto
currency and the same is intended to solve various problems of the customers. This is so because
there are still many people who do not have access to any financial institution. Libra will be a
stable currency that will have the same value throughout the world. This is so because people can
convert their digital money into their own currencies.
Therefore this currency will help in the frictionless movement of money from one part of
the world to another without the interference of the intermediaries. With the help of digital
currencies, users can directly deal with one another and by overcoming the traditional
intermediaries such as the regulators and banks. Moreover the company is also helping the non-
profit lira foundation by partnering with them for this new venture and therefore the product is
not America based. The main aim behind this new venture of Facebook is to be able to launch a
virtual token which will help people especially the unbanked ones to make seamless payment
with the help of their smart phones both inside and outside of Facebook application. Since
customers may fail to trust Facebook with their personal information because of the privacy
issues that it faces, the company had made a decision to make use of block chains where all the
Crypto currency strategic intent
Strategic intent refers to the means by which organizations achieve its objectives or
vision. The vision of Facebook is to let people stay connected with their families and friends, to
know what is going on in the world and also to know to be able to freely express what matters to
people. The mission of Facebook is to empower people to build their community and also to stay
closer. In order to achieve its vision and mission, Facebook has decided to enter a new venture of
using crypto currency. Crypto currency is a type of digital currency that is usually used as a
medium of exchange between people and is used for providing security to the financial
transactions (Oxford Analytica). Facebook has proposed the use of Libra as the new crypto
currency and the same is intended to solve various problems of the customers. This is so because
there are still many people who do not have access to any financial institution. Libra will be a
stable currency that will have the same value throughout the world. This is so because people can
convert their digital money into their own currencies.
Therefore this currency will help in the frictionless movement of money from one part of
the world to another without the interference of the intermediaries. With the help of digital
currencies, users can directly deal with one another and by overcoming the traditional
intermediaries such as the regulators and banks. Moreover the company is also helping the non-
profit lira foundation by partnering with them for this new venture and therefore the product is
not America based. The main aim behind this new venture of Facebook is to be able to launch a
virtual token which will help people especially the unbanked ones to make seamless payment
with the help of their smart phones both inside and outside of Facebook application. Since
customers may fail to trust Facebook with their personal information because of the privacy
issues that it faces, the company had made a decision to make use of block chains where all the
6STRATEGIC ANALYSIS
information will be encrypted. Therefore Facebook will not be able to access any private
information of the customers (McCallig 2014).
Crypto currency barriers to entry
The new venture of Crypto currency of Facebook may have to face with a number of
barriers of entry especially into the developing countries. This is so because the government of
the developing countries may not support the entry of crypto currencies into their economy. This
is so because there are a number of risks associated with the entry of crypto currency to a
country’s economy (Hawkins 2019). If the citizens completely depend upon the global currency,
then inflation will occur in the country, and as a result the local currency will become useless and
therefore government will be unable to regulate the economy properly such as it will not be able
to pay for different public services such as education, roads, police and bridge. Moreover this
situation cannot be handles even by the central bank of the country (Gürel and Tat 2017).
Therefore the crypto currency may first have to face problems from the government. Moreover
keeping the past record of Facebook in mind, users may be unable to trust Facebook with their
personal details. The company has engaged in many privacy issues and it is also known for
exploiting others.
Conclusion
Therefore from the above discussion, it has been understood that strategic analysis is
important for all organization as it can help an organization in identification of its strengths,
weaknesses, opportunities and threats. Therefore from the paper, the environmental analysis of
Facebook can be understood. Further from the paper, the current joint venture of Facebook or the
crypto currency strategic intent has been understood and the barriers to entry for organizations in
information will be encrypted. Therefore Facebook will not be able to access any private
information of the customers (McCallig 2014).
Crypto currency barriers to entry
The new venture of Crypto currency of Facebook may have to face with a number of
barriers of entry especially into the developing countries. This is so because the government of
the developing countries may not support the entry of crypto currencies into their economy. This
is so because there are a number of risks associated with the entry of crypto currency to a
country’s economy (Hawkins 2019). If the citizens completely depend upon the global currency,
then inflation will occur in the country, and as a result the local currency will become useless and
therefore government will be unable to regulate the economy properly such as it will not be able
to pay for different public services such as education, roads, police and bridge. Moreover this
situation cannot be handles even by the central bank of the country (Gürel and Tat 2017).
Therefore the crypto currency may first have to face problems from the government. Moreover
keeping the past record of Facebook in mind, users may be unable to trust Facebook with their
personal details. The company has engaged in many privacy issues and it is also known for
exploiting others.
Conclusion
Therefore from the above discussion, it has been understood that strategic analysis is
important for all organization as it can help an organization in identification of its strengths,
weaknesses, opportunities and threats. Therefore from the paper, the environmental analysis of
Facebook can be understood. Further from the paper, the current joint venture of Facebook or the
crypto currency strategic intent has been understood and the barriers to entry for organizations in
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7STRATEGIC ANALYSIS
this venture have also been understood. Moreover from the paper, the strategic principles and
methods such as SWOT analysis, Porters five forces and others have been understood.
this venture have also been understood. Moreover from the paper, the strategic principles and
methods such as SWOT analysis, Porters five forces and others have been understood.
8STRATEGIC ANALYSIS
References
Crossan, M.M., Fry, J.N. and Killing, J.P., 2004. Strategic analysis and action. Pearson Prentice
Hall.
Grundy, T., 2006. Rethinking and reinventing Michael Porter's five forces model. Strategic
Change, 15(5), pp.213-229.
Gürel, E. and Tat, M., 2017. SWOT analysis: a theoretical review. Journal of International
Social Research, 10(51).
Hawkins, J., 2019. Will Governments Lose Monetary Control to Facebook's Libra
Cryptocurrency?.
McCallig, D., 2014. Facebook after death: an evolving policy in a social network. International
Journal of Law and Information Technology, 22(2), pp.107-140.
Mukherjee, I., 2018. Applying Porter’s Five Force Framework in Emerging Markets—Issues and
Recommendations. In Strategic Marketing Issues in Emerging Markets (pp. 307-316).
Springer, Singapore.
Oxford Analytica, Facebook’s cryptocurrency has a long road ahead. Emerald Expert Briefings,
(oxan-es).
Pickton, D.W. and Wright, S., 1998. What's swot in strategic analysis?. Strategic change, 7(2),
pp.101-109.
References
Crossan, M.M., Fry, J.N. and Killing, J.P., 2004. Strategic analysis and action. Pearson Prentice
Hall.
Grundy, T., 2006. Rethinking and reinventing Michael Porter's five forces model. Strategic
Change, 15(5), pp.213-229.
Gürel, E. and Tat, M., 2017. SWOT analysis: a theoretical review. Journal of International
Social Research, 10(51).
Hawkins, J., 2019. Will Governments Lose Monetary Control to Facebook's Libra
Cryptocurrency?.
McCallig, D., 2014. Facebook after death: an evolving policy in a social network. International
Journal of Law and Information Technology, 22(2), pp.107-140.
Mukherjee, I., 2018. Applying Porter’s Five Force Framework in Emerging Markets—Issues and
Recommendations. In Strategic Marketing Issues in Emerging Markets (pp. 307-316).
Springer, Singapore.
Oxford Analytica, Facebook’s cryptocurrency has a long road ahead. Emerald Expert Briefings,
(oxan-es).
Pickton, D.W. and Wright, S., 1998. What's swot in strategic analysis?. Strategic change, 7(2),
pp.101-109.
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