Strategic Management of Facebook

Running head: STRATEGIC MANAGEMENT
STRATEGIC MANAGEMENT
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STRATEGIC MANAGEMENT
Table of Contents
Introduction of organization and current challenges.......................................................................2
Macro trend analysis-......................................................................................................................3
PESTEL analysis.........................................................................................................................3
Environmental analysis................................................................................................................5
Porters five force analysis............................................................................................................5
Capability analysis...........................................................................................................................7
Strategic capabilities....................................................................................................................7
VRIO criteria...............................................................................................................................8
Competitive implications.............................................................................................................9
Proposed strategy and conclusion..................................................................................................10
Conclusion.....................................................................................................................................11
References......................................................................................................................................13
Appendixes....................................................................................................................................16

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Introduction of organization and current challenges
Facebook is an American company that offers to its users online social networking
services. The company was founded in the year 2004. The founder of the company is Mark
Zuckerberg, Eduardo Saverin, Dustin Moskovitz and Chris Hughes. All the founders of the
company were students of Harvard University(Galpin, Whitttington and Bell 2015). The
company has become one of the largest social networking platforms in the world. It has more
than one billion users since the year 2012. Half of the users are using Facebook every day. The
headers of Facebook are located in California, Menlo Park. The company is highly aspiring and
is made up of talented and entrepreneurial professional, along with the clefs and the distributing
partners of the company every day. The company is highly inspired with the positive and open
culture and it empowers the employees of the organization to make a different in each
department of the organization. The company aims to continue their business in a sustainable
manner. The company offers free access to Facebook without any charges and it earns most of
the money from Facebook advertising on the website (Genoveva and Siam 2017). The social
networking sites has many components including a space for the users to post pictures, video’s
on their timelines, users profile pages, the users are provided with an opportunity to share the
contents on their timelines with their friends and family, they can post images and messages,
further, it has facility that enables the users to get an alert on their phones about the current
status, situation of the friends of the users. Moreover, Facebook allows its customers to chat with
one another on the platforms and send private messages. The users can show their approval of
the content in their timeline by hitting the like button and comments on the comment section of
the content on Facebook. The social networking site Facebook also provides various security
options for the safety and privacy of every user(Bello-Orgaz Jung and Camacho 2016).

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STRATEGIC MANAGEMENT
Facebook is facing various challenges being the most used social media networking sites.
The company is increasingly facing challenges of general data protection of the users and the
advertisers on the platform. The company has been facing too many advertisement load
saturation in the news feed of the users since a long time. It leads to slow down, however
Facebook has managed to lower ads in the platforms with high average ad prices. The price of
the posting advertising on Facebookis increasing demand for the company’s ads inventory. The
company has to find and implement other ways and techniques to improve and grow its revenue
at a higher rate(De Wolf, Willaert and Pierson 2014).This remains to be a challenge for
Facebook. There is extremely high mouthing active user on the platform of Facebook, it keeps
growing the user base, and it has become a challenge for the company and keeps the users
engaged. Huge user base of the company has become different for the company to manage its
business ethically and efficiently. The company also faces monetizing pressures, engagement is
declining, and therefore, the company is increasing facing the challenge to monetize more of its
products. The company is also facing governance problems and troubles, as there are more
negative reports every week, the employee morale of the company is hitting new lows. There
company is facing decline of trust in tech as well (Vorvoreanu 2014).
Macro trend analysis-
PESTEL analysis
The PESTEL analysis of Facebook determines the growth, opportunity that is faced by
the company in the international market; it also determines the threats in the macro environment
and its impact on growth achieved by focusing on innovation and other approaches by Facebook.