Strategic Management of Facebook | Report

Table of Contents
Table of Contents....................................................................................................... 0
Abstract........................................................................................................................ 1
Introduction................................................................................................................ 1
Pestle analysis............................................................................................................ 2
Porter’s 5 forces......................................................................................................... 3
Strategic capability analysis....................................................................................... 4
SWOT analysis............................................................................................................ 5
Generic strategy (porter’s model).............................................................................. 7
Facebook safe analysis............................................................................................... 8
Bibliography............................................................................................................... 9

FACEBOOK STRATEGIC MANAGEMENT
Abstract
Facebook, a social site, is used to connect people all over the world. It was founded in 2004 and
by 2016; it has been able to reach more than 1.5 billion people worldwide. Zuckerberg alongside
other people was able to bring the new invention into the market, familiarized the functionalities
of the product to the people and finally succeeded in the social market. This report focuses on the
strategy of Facebook Inc. which is divided into introduction, PESTLE analysis, Porter’s 5
Forces, strategic capability analysis, SWOT analysis, porter’s 4 international strategies and
selection of optimum strategy.
Introduction
Facebook was founded on February 4, 2004. It is a social networking site which was founded by
Mark Zuckerberg alongside his college roommates from Harvard University. They include
Andrew McCollum, Dustin Moskovitz, Eduardo Saverin and Chris Hughes. Its mission is to
make the world more open and connected. This is achieved through giving people the power to
share whatever they want to whomever they want no matter where they are. Over the years,
Facebook has gained popularity all over the world, and millions of people use it every day to
connect with friends, upload photos, share links and videos among other social things.
According to Zuckerberg, he said his three pillars towards achieving this mission is to build the
best and most appearing mobile product, to build a platform where every new application that is
created can be social and enable people to share, and to build strong monetization and economic
engine that will eventually build Facebook into one of the world’s most valuable companies.
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FACEBOOK STRATEGIC MANAGEMENT
Pestle analysis
An external analysis of the most important factors in a company’s remote environment is done
through this model. Facebook being a top player in the social media market, its market capability
can be maintained through popularity, brand development, and R&D investment. However, this
model shows that Facebook Inc. needs to adjust its strategies to ensure that its products remain
competitive enough so as to maintain their lead in the market. This work will now put its focus
on the factors that affect Facebook
i) Political factors. Under this we have; political stability in developed countries, that is
an opportunity and it enables facebook to continue diversifying its business in these
markets, governmental support for globalization and this gives facebook an
opportunity to expand its social media and display its advertising services worldwide
(opportunity), political barriers for example in Chinese market (threat) and this may
delay its global growth (Young, 2016). These, however, are just a few of other
political factors.
ii) Economic factors. They include; it has the opportunity that can increase its market
penetration efforts in the developing and stabilizing countries. Another opportunity is
that the rapid development of these developing countries also increases the
telecommunication factor which is an added advantage for Facebook Inc. when a
country develops, the disposable incomes of that country increases. This means that
more people are able to buy gadgets with better features for internet connection and
this is an opportunity for Facebook (Young, 2016).
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FACEBOOK STRATEGIC MANAGEMENT
iii) Social/social-cultural factors. Among them include; the preference for high-quality
services. This happens when there is increased financial capacity and improved living
conditions. Increased online buying creates an opportunity for Facebook to retail
some of its products online since purchasing is easy.
iv) Technological factors. Among them is the increasing worldwide use of mobile
devices, this is a great opportunity for Facebook. The advancement in technology has
also led to the increase in social media companies which are a big threat to Facebook.
Another big threat for Facebook business is the fact that some online retailers have
diversified their business and are now offering advertising services.
Some other factors include; environmental factors and legal factors. This analysis
recommends that Facebook should address some major opportunities as well as
threats so as to reach more people and the result is increased revenue (Young, 2016).
Porter’s 5 forces
This analysis deals with five forces that shape industry competition. They include
competitive rivalry, bargaining power of suppliers, bargaining power of customers,
the threat of new entrants, and the threat of substitute products. We will now look at
how each of this affects Facebook.
i) Understanding current competitors. Currently, Facebook is facing competition
from social networks such as Google plus, Tumblr, twitter, LinkedIn among
others. Facebook Inc. faces direct competitions from these sites which pose a
moderately high risk.
ii) Customer bargaining power. If all Facebook customers ceased to use the
social site today, nobody would pay for his or her advertisements to be done
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