Strategic Management in Twitter

This document discusses the strategic management approach of Twitter, including its strategy formulation approach, competitive environment analysis, and strategic capabilities evaluation using the VRIO framework. It also highlights the importance of strategic management for major players in the social networking industry. Find more study material and solved assignments on Desklib.

STRATEGIC
MANAGEMENT

Table of Contents
INTRODUCTION.......................................................................................................................................3
MAIN BODY..............................................................................................................................................3
1. a) Justification and analyzes of what makes the Twitter Strategy formulation approach both emergent
and deliberate and limitations of approaches to strategy formulation......................................................3
1. b) Development of Strategic management is significant for the major players in social networking
industry....................................................................................................................................................5
2. a) Critical Analysis of competitive environment which is faced by Twitter.......................................6
2. b) Evaluation of Strategic capabilities of Twitter by using VRIO framework.....................................9
3. a) Analysis of current Strategies of Twitter and range of alternative future strategies that is adopted
by the company.....................................................................................................................................11
3 (b) with use of SAF model justify and choose that is most suitable for the Twitter and the outcomes
of analyses in question must match with your selection........................................................................14
CONCLUSION.........................................................................................................................................17
REFERENCES..........................................................................................................................................18

INTRODUCTION
Strategic management refers as setting the business objectives, analyzing the competitive
environment and evaluating strategies by analyzing the internal environment. To ensure the role
of management is also comes under strategic management. The report is based on Twitter. It is
an American social networking and micro blogging service by which users interact through post
and messages that are known as tweets. It is founded on March 21 in the year 2006. The founders
of the company are Jack Dorsey, Biz Stone, Noah Glass and Evan Williams. The headquarters of
the company are situated in California in United States.
The study will justify Twitter Strategy formulation approach. It will evaluate the
approaches limitations. It will explain the development of strategic management is necessary for
social and micro blogging industry. The report will do critical analysis of competitive
environment faced by twitter in social networking. Furthermore, it will define the strategic
capabilities of Twitter. Moreover, report will analysis current strategies of Twitter and propose
the alternative future strategies. Lastly, the study will formulate SAF strategic model.
MAIN BODY
1. a) Justification and analyzes of what makes the Twitter Strategy formulation approach both
emergent and deliberate and limitations of approaches to strategy formulation
Strategy refers as making decisions about how a firm will operate in the marketplace
(Schilling and Shankar, 2019). This process is designed for providing an organization with long
time benefits.
Deliberate strategy - It means top down approach for doing strategic planning which put
emphasis on achieving the business objectives. It is the strategy which is all about tradeoffs and
making choices. Deliberate strategy means to choose something different from the competitors.
It provides clarity about purpose of objectives.
Emergent Strategy- It refers as a view that emerged with the time. It is the set of behavior,
actions and consistency over the time. It implies the strategy of organization learning and defines

what is in the practice. This is the time period when contingency get arise in behavior and actions
in the organization. The contingencies are explicitly intended.
Difference between Deliberate and Emergent approach
Deliberate Strategy Emergent Strategy
It is followed by in depth planning and
designing (Kopmann, Kock and Gemünden,
2017).
In this strategy initial hypothesis is created
about the marketplace. As it is tried and tested,
hence feedback is quickly assessed.
The strategy is executed and communicated
between management and employees.
The changes are made as per the strategy or in
the way in which it is executed in the
organization.
Execution period is carried out for one or more
than two until and unless the strategies are out
of date.
After the feedback is received the budgets and
plans are revised. The refinements for the
strategy are communicated and its execution
gets monitored.
Lastly the strategy is reviewed and analysis. The organization learns about the execution
and strategy.
It is the classic approach. Once the lesson gets learned both strategy and
organization evolved.
Limitations of Emergent and Deliberate
 The organization tends to anticipate future environment for developing plan and as it well
known that predicting future is not easy. If the future doesn't unfold as anticipation which
is done on earlier basis than all the strategies may get failed.
 Emergent strategy one of the drawback is that it is potentially ineffective for resource
allocation. It arises when easy allocation doesn't exist for longer period. The previously

allocated methods have stop working during this time as there is significant change in the
business.
 Organization alignment is another limitation of Emergent strategy. There is time when
there is rapid change. Thus, the old goal is clash with emerging goal.
 Emergent innovation strategy is used to determine the potential innovation stickiness
whereas Deliberate innovation strategy force to consider innovation is sticky or not.
Initiatives adopted by Twitter
Twitter has successfully found a balance between emergent and deliberate strategy. The
organization ensures that the correct measures need to be taken for allowing emergent strategy in
order to manifest. Twitter has to study lower level management. Twitter is in that industry in
which changes are frequent (Ansoff, Kipley and Ansoff, 2018). Thus, it is tend to grant more
autonomy for lower level management. Hence, it is helpful for them to react on such quick and
significant changes. Twitter is adopting centralized structure but they also give decision making
power to its employees. Allowing employees in decision making process is helpful the decision
making process is done on quicker basis. When decisions constantly reach top level management
then it takes time. Thus, it is better to engage employees in decision making process and get to
know about their point of view. This also put responsibility on the lower level management.
Hence, it is necessary to have a balance of both the parties in decision making top as well as
lower level.
1. b) Development of Strategic management is significant for the major players in social
networking industry
Importance of Strategic Management for major players in micro blogging and social
networking industry -
 It helps in guiding such companies like Twitter to move in a specific direction. It defines
the goals and objectives of the organization and fixes realistic targets, which are in the
goal of the company’s vision. The strategic management will also help these industries to
specifically operate their micro blogging sites.

 It will also assist the Twitter in becoming proactive, rather than reactive, to make it able
to analyze the actions of the competitors and take necessary steps to compete in the
competitive market, instead of becoming spectators. The strategic management will help
Twitter in easy micro blogging and such information about it.
 It also acts as a foundation for all key decisions of the firm. It tries to prepare the
organization for future challenges and play the role of pioneer in exploring opportunities
and also helps in identifying ways to reach those opportunities.
 It ensures the long-term survival of the firm while coping with competition and surviving
in the dynamic environment. It assists in the development of core competencies and
competitive advantage that helps in growth and survival of the organization.
2. a) Critical Analysis of competitive environment which is faced by Twitter
SWOT Analysis of Twitter:
Strength -
 Strong distribution network - In the past years Twitter has built a valuable distribution
network that is able to reach majority of its potential market.
 They have a successful track record of developing new products i.e., product innovation.
 Reliable suppliers - It has a strong base of trustable supplier of raw material thus the
company is able to overcome any problem related to supply chain in the company.
 Strong Brand Portfolio - In the past years Twitter has invested a lot of money in building
a strong brand portfolio. This brand portfolio can be extremely useful if the organization
wants to expand its business in new product category.
Weakness -
 Limited success outside core business – Even though Twitter is one of the leading
organizations in its industry it has faced several challenges in moving to other product
segments with its present culture.
 Organization structure is only compatible with present business model thus limiting
expansion in adjacent product segments (Gürel and Tat, 2017).
 They are not very good at product demand forecasting leading to higher rate of missed
opportunities compare to its competitors. One of the reason why these days inventory is

high in comparison to its competitors is that Twitter is not very good at demand
forecasting thus end up keeping higher inventory both in-house and in channel.
Opportunity -
 Economic uptick and increase in customer spending, after years of recession and slow
growth rate in the industry, is an opportunity for Twitter to capture new customers and
increase can increase its market share.
 The new taxation policy can significantly impact the way of doing business and can open
new opportunity for established for big players such as Twitter to increase its
profitability.
 The market development will lead to dilution of competitor’s advantage and enable the
Twitter to increase its competitiveness compare to the other competitors.
Threat -
 New environment regulations under Paris agreement could be a threat to certain existing
product categories.
 Increasing trend toward isolationism in the economy can lead to similar reaction from
other government thus negatively impacting the international sales.
 Shortage of skilled workforce in certain global market represents a threat to steady
growth of profits for Twitter in those markets.
 Intense competition - Stable profitability has increased the number of players in the
industry over last two years which has putted a downward pressure on not only
profitability but also on overall sales.
PESTLE Analysis of Twitter:
Political Factors -
 The integrity of the politicians and their behavior to take part in acts of corruption, as a
result repercussions may lead to possible losses or resignations of high level government
employees in Twitter (Perera, 2017).

 The laws that the country enforces, especially with regards to business, such as contract
law will restrict twitter, as they are about what is and what is not allowed to do. Some
countries prohibit alcohol or have certain conditions that must be fulfilled.
 The trade barriers that the host country will protect, however, trade barriers that countries
with potential trade partners would harm Twitter by preventing potential exports.
 A high level of taxation would de-motivate Twitter from maximizing their profits. The
risk of military invasion by hostile countries may cause disinvestment from ventures. A
low minimum wage would mean higher profits and, thus, higher chances of survival for
Twitter.
Economic factors -
 The rate of GDP growth in the country will affect how fast is the Twitter is expected to
grow in the near future.
 The interest rates in the country would affect how much individuals are willing to borrow
and invest. Higher rates would result in greater investments that would mean more
growth for Twitter.
 The exchange rate of the country that is in operation would impact the profitability of the
firms particularly engaged in international trade. The stability of the currency is also
important because an unstable currency discourages international investors.
Social factors -
 The demographics of the population, that is their respective ages and genders, vastly
impact upon if a certain product may or may not be marketed to them. The class
distribution among the population is also important of development of Twitter.
 To some extent, the differences in educational background between the superiors and the
subordinates may make it difficult to relate and analyze the consumers in the market
effectively (Policy, 2018).
Technological factors -

 The recent technological developments and innovation made by competitors are
important. If the Twitter will face competition on new technology that is gaining
popularity in the industry in day by day.
 The impact of the technology on the cost that most companies in the industry are facing
to have the potential to increase or reduce the profits margin of Twitter. If these profits
are great in number, they may be reinvested into the research and development
department, where future technological innovations would further raise the level of
profits, and thus, ensuring sustainable profits over a long period of time.
Legal factors -
 Intellectual property laws and other data protection laws are, as mentioned to protect the
ideas and patents of companies who are only earning profit because of that information
such as Twitter.
 Discrimination laws are placed by the government to protect the employees and ensure
that everyone in is treated fairly and given the same opportunities, regardless of gender,
age, disability, ethnicity, religion or sexual orientation. In Twitter these laws can affect
both favorably and unfavorably.
Environmental factors -
 The current weather conditions may significantly impact the ability of Twitter to manage
the internet speed. This, at last would affect the rating of Twitter in the case of
unexpected weather condition.
 Those companies like Twitter that operates all over the world will have almost no impact
of environment change.
2. b) Evaluation of Strategic capabilities of Twitter by using VRIO framework
VRIO model
It is a business framework that is part of firm larger scheme strategic. It is the process in which
the company goes through vision statement and also continues to achieve the objectives. It is
continuing by the objectives, external and internal analysis, and implementation strategic and
strategic choices (The VRIO Framework, 2020).

VRIO stands as follows -
 Value - In this the value of potential resources get analyzed. If company has something
distinct from the others in the market then it can be termed as valuable for the
organization. If there is nothing present in the organization, resources then it doesn't help
the company to take a competitive lead and although it is considered to be a Weaknesses
for the firm. Also, it will potentially damage the company's operation.
 Rarity - It is harder to be achieved by any business. It is considered as value for the
organization once the rarity take place in the firm. Rarity is associated with uniqueness in
product, processes, methods etc. It is a type of advantage which a firm possessed over its
competitors. For achieving the rarity two obligations has to be met. First it should be hard
to find and need to last for the longer time.
 Imitable - It is present everywhere in the company. The company seeks to copy its
competitors as the competing company has launched a product in the marketplace. Thus,
the firm has quickly started working for intimating the product as close as possible for
entering into the marketplace as direct with their competitors. Usually the firm tries to
compete with its competitors by lowering the price of the products. To protect the
products from its competitors the company can do legal protections and patents so that
competitors cannot be able to intimate the products of the company. When the intimating
process seems to be easier for the competitors than the company has to continuously
innovate their products so that their competitors are not able to chase and copy the idea of
the firm. Twitter has to take its offerings to the next level so that it cannot be easily
copied by its competitors and are not easily imitable.
 Organization - It is the last point of organization. The company has to structure in such a
way by which they are able to exploit all the advantages which are listed in above three
points Indartono and Wibowo, 2017). The advantage can only be useful if the company
gets success in leveraging the additional sales.
VRIO Analysis of Twitter
Valuable Rare Imitable Organization
applicable

Yes Yes Maybe Yes
The Employees of
Twitter are considered
as Valuable for the
company. The
company has potential
workforce. The firm
doesn't have their own
patents basket. There
is much more needed
to build its own patent
and database of good
structure.
The whole industry of
Internet is on its rapid
growth. The resources
are not rare but some
of the major resources
of Twitter are
considered as rare.
These are the Twitter
logos, templates and
social icons that help
the users to use
content of Twitter
brand.
According to Twitter
VRIO structure, the
firm structure is
significant it is able to
intimate easily. This
can be a short period
of competitive
advantage. The
company is also
enjoying sustainable
competitive benefit
through market
oriented strategy,
firm's versatility,
cutting edge and long
term relationships
abilities for the
organization. On the
other hand
competitors find hard
to copy the Twitter
content as it is already
protected by patent
and copyright acts.
Twitter is dynamic
enough and versatile
so it can easily be able
to adopt the market
scenarios. It is the
market oriented
company (Indartono
and Wibowo, 2017).
The business is
arranged in such a
way that it less
reliance on trading
business and
importers that
contributes to take
competitive
advantage.
3. a) Analysis of current Strategies of Twitter and range of alternative future strategies that is
adopted by the company
Porters generic Strategy

As per Porters generic Strategy there are 4 different way through which an organization can take
a competitive advantages. All the 4 strategies are as follows:
Cost Leadership Strategy: It is the type of the strategy in which organization look to
reduce the cost of the company as this will eventually help them in charging the average price as
per the industry demand. These eventually used to help the company in maximizing the profit
and ma help the company in getting competitive advantage as well (Omsa, Abdullah,and Jamali,
2017).
Differentiation Strategy: It is the type of the strategy in which the organization look at
making the product of the company different from the competitor in the market, these will
eventually help the company in attracting the better number of the consumer toward the product
of the company. This can be done with the help of good research and innovation.
Cost Focus strategy: It is the strategy which used to specify that organization has to add
an extra benefit with keeping the price of company at low as it will help the consumer in getting
the better idea about the new strategy which is used by the company in the market.
Differentiate Focus strategy: It is the strategy in which the company has to understand
the need and the preference of a particular market and on the basis of the same has to make sure
that they are producing the product that is able to satisfy the need of that number of the consumer
in the market (Manyeki and et.al. 2018).
After going through all the 4 type of Strategy it has been recommended to the Twitter that they
have to make sure that they used to follow the Differentiation strategy in the market as it will
help the company in getting the competitive advantage in the long run. Also, it will help the
company in seeing better number of the consumer in the market as well.
Tows Matrix
S
T
R
E
OPPORTUNITIES THREAT
There is an opportunity that customer will
be spending the more money in the market,
as organization used to invest good amount
There is strong threat of competition in the
market, these threat can be overcomes in the
market with the help of strong brand portfolio

N
G
T
H
of money in their infrastructure. It can help
the company in changing the customer need
as per their need.
as it will help company in maintaining the
good image in front of the consumer.
W
E
A
K
N
E
S
S
E
S
There is an opportunity that market
differentiate will help the company in
getting competitive advantage. This sort of
opportunity may help the company in
overcoming the issue of limited success out
of the core business of the company
(Gottfried and et.al. 2018).
There is a threat for the company that there is
good amount of the shortage in the market in
the context of the number of the skilled
worker in the market, this will impact the
company as company is having the weakness
of non proper organizational structure.
BCG Matrix
The matrix is being designed to help the company for achieving its long term planning of
strategies in order to help the business to consider their growth opportunities (BCG Matrix
model, 2019). By reviewing the portfolio of services and products the company is able to decide
how to invest or to discontinue in certain products which are not working out properly.
BCG Matrix of Twitter
Low High
High Question Mark's
The Asset Management is
extended beyond its
capabilities which are core in
nature.
Investment Stars
Twitter has alpha generating
strategies for investment
which result into distinct
products.

Innovation accelerates as the
pace of market becomes
important (Mohajan, 2017)
It is allotted as the resources
and greatest investment.
Twitter requires focus on its
innovation.
Low Dogs
The strategies which decline
the net inflows for the firm
and also gets fail to
differentiate its asset manager.
It is needed to repackaged and
reinvented.
Cash cows
To establish strategies
Has performed well enough
but not growing as required
This is needed to operate
effectively by retaining the
AUN on right track.
3 (b) with use of SAF model justify and choose that is most suitable for the Twitter and the
outcomes of analyses in question must match with your selection
SAF strategic model
Suitability - One of the initial motives of strategic analysis is to achieve a clear understanding of
the organization and the environment in which the firm is operating (Hitt and Duane Ireland,
2017). A simple brief of this situation may consist of a list of upcoming big opportunities and
threats which the organization has to face, its specific strengths and weaknesses, and any
expectations which are an important for making a strategy. Suitability is a tool for assessing the
extent to which a proposed strategy is identified in the strategic analysis, and how it would
improve or sustain the competitive position of the organization. Suitability is also one of the
critical and crucial stages of evaluation and analysis as it is the basis for the other two
complicated stages. The suitability is also considered as most vital one because of its
implications that are directly related to the behavior of external users of the organization.
Feasibility - An assessment of the feasibility of any strategy is concerned with whether it can be
implemented successfully. The scale of changes must be achievable in the terms of both financial

resources. The evaluation will already have been started during the identification of options and
will continue through this process of planning the details of implementation. However, at the
stage there are a number of fundamental queries which are needed to be asked when assessing
feasibility. For example queries related to funding and recruitment of human resource. Feasibility
is often known as evaluation and analytical stage as it directly affects the internal users of
business.
Acceptability - On the other hand along with suitability and feasibility, acceptability is the third
criterion. This is considered as a difficult area, since acceptability is strongly related to people’s
expectations, and therefore the issue of ‘acceptable to whom?’ requires the analysis with high
degree of carefulness (Anwar and Hasnu, 2016). The analysis of stakeholders is done particularly
in stakeholder mapping. The way in which stakeholders ‘line up’ is dependent on the specific
situation or the strategy which is under consideration. Stakeholder mapping is an important
strategy for testing the acceptability of strategies. Clearly a new strategy is unlikely to be the
ideal until it has been practically implemented as per the choice of all stakeholders. The
evaluation of stakeholder expectations is therefore crucial and important for the organization.
The company can implement these strategies -
 Twitter can do expansion in industry of news media - By analyzing the competitive
advantages of Twitter it has be analyzed that the company has a great opportunity in
news media. It can assess breaking news through social network. The firm has unique
value proposition because of real time tweets. The firm can categorize their users in order
to share and read news by separating market segment.
 Journalist’s subscription base model - The social network graph of Twitter is based on
internet. Thus, the content they share is followed by many of the leaders. The company
can target journalists through this subscription based model. It is beneficial for journalists
as well as Twitter that the can gain credibility and also easily be reached to the large
number of audience.
 The Company should launch a scheme in which it will provide additional benefits to
those companies who are doing social media marketing through Twitter - As per the
research about 65% of business prefer to do social media marketing through Twitter.
Thus, Twitter is able to generate its revenue moreover through advertisements. Hence,

advertisers can be termed as very crucial market segment for the firm. Twitter has
already started a subscription based service in the year 2017 but the firm is unable to
continue this service through including add on service. The company can provide
optimize service in which it is totally based on bio description of the firms. The
companies who rely more in Twitter can prefer to investment more on Twitter profile.
 Overseas Expansion - The Company is needed to become more attractive than
Facebook. The overseas expansion of Twitter is very limited the firm has to do more
overseas expansion (Lasserre, 2017). The firm has to focus on market of Japan more
because they have already get success in that market.
 The company can use monetization strategies - The Company operates social interest
graphs similar to Weibo which is one of the competitors of the firm. Weibo get succeed
in improving its capabilities of monetization. Thus, twitter also need to invest on graph of
social interest in order to achieve monetization capabilities. As the Twitter has already
expanded its capabilities on video streaming enhancing so, the company has more scope
for improving its video streaming by providing virtual gifts. The company can also add
feature of gamification.

CONCLUSION
It has been concluded that the strategic management process includes setting the goals,
strategy formulation, implementation and lastly monitoring these strategies whether they are
working successfully in the organization or not. It has been evaluated that financial planning is
not done properly and efficiently in Twitter. The current asset ratio and liquid asset ratios suggest
that the company can use the cash more efficiently than what it is doing at present. It has been
summarized that how efficiently the financial markets operate also impact upon the Twitter. The
company can raise capital at a fair price, keeping in mind the demand and supply. It has been
determined that health and safety laws were created after witnessing the horrible conditions that
employees were forced to work in during and directly after the industrial revolution. It has been
determined that the company can categorize its users to share and read news through separating
market segment and by shifting its strategy for increasing their user engagement.

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