Strategic Management in the Micro Blogging and Social Networking Industry

This report discusses the importance of strategic management for major players in the micro blogging and social networking industry, using Twitter as a case study. It explores the deliberate and emergent strategy formulation approaches, analyzes the competitive environment facing Twitter, and evaluates the balance of opportunities and threats. The report also proposes practical alternative future strategies for Twitter.

Strategic Management

Contents
INTRODUCTION...........................................................................................................................3
Part 1................................................................................................................................................3
a) Analyse and justify what makes the Twitter strategy formulation approach both deliberate
and emergent. Evaluate the limitations of both approaches to strategy formulation.............3
b) Explain why the development of strategic management is important for the major players
in the micro blogging and social networking industry?.........................................................5
PART 2............................................................................................................................................6
Critically analyse the competitive environment facing Twitter in the social networking
industry. Evaluate the balance of opportunities and threats...................................................6
Evaluate the strategic capability of Twitter using the Value, Rare, Imitability and
Organisational Support (VRIO) framework...........................................................................8
PART 3..........................................................................................................................................10
Critically analyse Twitter’s current strategies and propose a range of practical alternative
future strategies for possible adoption by the organisation..................................................10
b) Using the SAF strategic model, select and justify the strategy that you believe Twitter
should pursue in the future...................................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................13

INTRODUCTION
Strategic management can be defined as the management of various resources of the
organisation so that the goals and objectives can be achieved efficiently. It includes setting up of
various goals and objectives for the organisation, analysing the business environment which
includes both internal and external environment, evaluation of the existing strategies of the
organisation etc. The strategy is being formulated by the company on different level. There are
three level of strategy such as on corporate level, business level, operational level and at
functional level (Ansoff, 2018). From the business perspective the corporate strategy are
considered to be the long term direction to the organisation for which the whole organisation has
to be focussed and accordingly they have to plan their actions. In this the strategic leadership
plays crucial role as they encourages the executives to perform consistently towards the overall
target. This report is based upon the case study of Twitter in which various issues faced by the
company in context of their business strategy are discussed along with the challenges that
affected the performance of the company. Twitter is a San Francisco, California, US based social
media and new website that has been operating in various countries throughout the globe. In this
report various approaches that are adopted by the management of Twitter are discussed along
with analysis of the competitive environment. In addition to this strategic capabilities are
discussed with the help of various models along with discussion of future strategies that can be
adopted by them which are supported by various strategic models and concepts.
Part 1
a) Analyse and justify what makes the Twitter strategy formulation approach both deliberate and
emergent. Evaluate the limitations of both approaches to strategy formulation.
Strategy formulation is the approach with the help of which the organisations provide
better direction to the people. With the help of this long term goals of the organisation can be
achieved by exploiting the strength of the organisation as per the prevailing opportunities in the
market. The formulation of this strategy is dependent upon the objectives and strategies of the
organisation and the modes such as entrepreneurial mode, adaptive mode, and planning mode.
The management of Twitter has formulated strategy for the organisation with the help of
entrepreneurial mode in which the opportunities are focused rather than the problems as per the

vision of the founder. The formulation of the strategy is dependent upon four aspects such as
culture, politics, leadership and managerial bias (Wheelen, 2017).
The strategies are formulated by the organisation the different approaches in which
deliberate strategies are those which provide the organisation a purposeful direction while the
emergent strategies is that organisation loans from the prevailing situations and their actions. A
strategy can be described as deliberate strategy when it aims to achieve the collective vision, goal
and intention of the organisation as identified by the leaders in detail and communicated to the
different people responsible for implementing such strategy so that desired outcome can be
achieved. While the emergent strategy can be described on the basis of consistencies within the
behaviour and actions of the organisation for managing the changes taking place in the business
environment which may not be explicitly intended by the organisation (Schilling and Shankar,
2019).
Various strategies were taken by the management of Twitter deliberately whereas some of
the strategies were emergent strategies. It can be justified from the following:
 The strategy which was formulated for managing the losses by way of public share
offering, strategies for increasing the engagement between the Twitter and advertisers,
business strategy of Twitter for the development and growth acquiring other businesses
etc. are deliberate strategy that was planned by the management and the leaders of the
organisation as per their requirement of growth and development of the business. In
addition to this, when the Twitter was expected to acquire well known organisation in the
year 2016 they announced change in the senior executive roles so that company can
perform better. This is also a deliberate strategy as they all are planned and are imposed
with clarity of purpose rather than for managing the impact of various external factors.
 The strategies so formulated by Twitter for managing the changes taking place in the
environment such as research and development for increasing the revenue of the
organisation is emergent strategy which they had to take for managing the impact of other
developing organisation such as Google, facebook etc. The Twitter was not able to
manage their revenue due to their lack of growth in spite of investment in research and
development as well as marketing because of lack of effective leadership within in the
organisation.
Limitation of deliberate and emergent strategy:

Both the approaches have various limitations due to which the influence of the strategy is not
always favourable to the organisation (Lasserre, 2017). The limitation of both the strategies is
given below for the organisation:
Limitation of deliberate strategy: The deliberate strategy affects the company in a situation
when the changes are required as they are planned for the specific outcome due to which it
makes the organisation rigid and reduces the speed of their responsiveness to the changes as in
the case of Twitter. The chances in these strategies for embedding the change are less due to
which the overall growth of the organisation get influenced.
Limitation of emergent strategy: In this strategy the risk of undertaking the actions are high
and the development of the strategy becomes slow as they have to formulated spontaneously for
managing the impact of adverse factors. As they are developed for managing situation due to
which conflicts can arise among different department of the organisation and mostly in the case
when it leads to change in the roles and responsibilities of the employees. In addition to this, it
has to be analysed efficiently so that the objectives do not have lack of clarity and strategy does
not results to underperformance.
b) Explain why the development of strategic management is important for the major players in
the micro blogging and social networking industry?
Strategic management is beneficial for all the types of organisation as with the help of this
they can ensure the action and the direction that they have to adopt for accomplishing their
overall organisational objectives. Micro blogging and the social networking industry facilitate
people in easily interacting and communicating with each other and sharing their ideas due to
which it becomes crucial for such organisation to ensure the safety and security of identify and
the personal information (Rothaermel, 2016). Further it the strategic management enables the
companies such as Twitter in determining the requirement of the people with the changing
environment and the technology so that they can improve their ways of offering the better
communication platform with different approaches such as business strategies are formulated for
acquiring other related or unrelated business with the help of which the interlinking of the
platforms can be done and this facilitated them in improving the experience of the customers. For
instances the Twitter enter into strategic partnership due to which the video can be linked with
others sited such as YouTube, Flickr etc. and this facilitated them to increase the interest of
tweeters to share their ideas through videos as well.

PART 2
Critically analyse the competitive environment facing Twitter in the social networking industry.
Evaluate the balance of opportunities and threats
For each and every organisation irrespective of the industry they have been operating it is
crucial that they analyse the competitive business environment and the macro environment which
includes various external factors that has to be taken into consideration as they have impact on
the business operations. The analysis of the external is done for Twitter with the help of PESTLE
model which is a tool for conducting an audit on the external environment.
 Political Factors: The political condition of USA is quite stable as well as the infrastructure
and technology prevailing in the country has been positioned significantly well due to which
the organisations can easily attract as FDI and this lead to many interested investors from
various developing countries such as China, India, and South Africa etc. This is an
opportunity for Twitter attracts the investors from different countries through public
offerings and other sources. But the political dynamics in USA affects other countries
around the world and due to this they faces international criticism for some of their policies.
It can be a threat for Twitter as due to this they may face difficulty in their operations in
other countries which can lead to loss of revenues (Pestle, 2020).
 Economic Factors: USA is considered to be the largest economy on the basis of its nominal
GDP with various large companies. This leads to a reduction in unemployment level but the
availability of cheap labour in other countries motivates their organisation to outsource their
processes. This is an opportunity for Twitter to expand their operations and reduced their
cost by outsourcing their processes to other countries India, China, Mexico etc. But the US-
China trade war, US-Iran standoff can lead to a recession as the stock market has sharply
dropped it is a threat for Twitter because it will impact their share prices as well and will
restrict their growth.
 Social Factors: The USA is considered to be the third most populous country with an
effective education system and health care system within the country. Due to a better
education system and better quality of life the people in the country are tech-savvy which
leads to increased use of networking platforms as Twitter, Facebook etc. for sharing their
opinions and ideas. This is an opportunity for Twitter to expand their market share as
twitters from USA are there main source of commercial activity. But with the changing

perception and behaviour of the people they expect frequent changes in the process of the
organisation which is a threat to Twitter (Ariyani and Daryanto, 2018).
 Technological Factors: USA is considered to be the global leader in Technology and
Science with multinational companies that are efficient in offering advance services around
the world. This is an opportunity for Twitter as they are in environment where organisation
and people are at forefront for adapting and applying technology in various fields. Twitter
can rapidly expand their market share by increasing the rate of innovation and change within
the organisation. But with the emerging market such as China, India, South Korea etc. they
have threat of losing their market share as they are consistently innovating their services.
 Legal Factors: Different state in USA has their government structure and legal schemes but
the business is have to operate as per the regulatory environment of the state due to which
promotion and support of each and every business is possible which is an opportunity for
Twitter for managing their business along with strong legal system to protect the intellectual
property rights. Strict norms have been set up by the judicial system for the misconduct
which can lead to legal proceedings against the company and this can be a threat for Twitter.
 Environmental factors: The weather conditions in USA affects economy of the country to
a greater extent as they have to face financial damages, technological disruption etc. due to
which the companies such as Twitter faces various issues as this reduces the number of
customers. But due to diversity in the nation they attract a large number of tourists from
different countries which facilitates economy to revive easily offering opportunities to the
companies for easy revival (Trigeorgis and Reuer, 2017).
Apart from the Macro environment it is important for the organisation to analyse the
competitive environment and the structure of the industry because it has direct influence on the
operations and decisions taken by the organisation. It can be done with the help of porter's five
force approach as the forces which are taken into consideration in the model defines the extent of
impact of this forces on the organisation. The analysis of competitive environment of Twitter is
given below:
 Threat of competitive rivalry: With the increasing number of organisations offering
platform for communication and sharing such as Myspace, Instagram etc. their opinions due
to which the impact of this force on organisation is very high. To meet up with the level of

competition the organisations has to add new features consistently so that they can keep the
fan base of the platform (Stanley, Ogbonna and Abu, 2017).
 Threat of new entrants: Social media industry is dependent upon significant level of
innovation and updated technology, web development and application development due to
which cost of entering into industry is high. Also it is difficult for new entrants to establish
vast channel as of twitter with businesses, news channels, individuals etc. Due to this the
impact of this force on Twitter is low as investment becomes barrier for them along with
level of innovation.
 Bargaining Power of supplier: The suppliers of Twitter include the people who supply
technical equipments as well as the people post news, feeds tweet that generate revenue for
the company. For both of the suppliers Twitter does not hold any bargaining power as the
manufacture of technical equipments limited and they cannot manage impressions of
twitters. Due to this the impact of this force on Twitter is very high.
 Bargaining power of buyers: Use of Twitter includes the businesses and marketers who
post their ads. With increasing social media platform their bargaining power increase is
because of low switching cost and due to this the impact of this force on Twitter as high.
 Threat of substitute: The availability of substitute antonyms of different platforms on
social media due to which they have been facing significant threat from them as it limit the
number of hours people spend on Twitter due to its limited features.
All these impact, opportunities and threats has to be taken into consideration by the Twitter
while formulating various strategies in future.
Evaluate the strategic capability of Twitter using the Value, Rare, Imitability and Organisational
Support (VRIO) framework
With the help of ratio analysis of Twitter internal resources and capabilities of the
organisation can be identified that can provide them sustainable competitive advantage over
others. In addition to this, the model facilitates the organisation in determining the improvement
to be made in their resources so that they can ensure advantage out of unused or inefficient
resources (Baumgartner and Rauter, 2017).
Internal analysis by way of SWOT for twitter is given below:
Strengths Weaknesses

The company has better brand image among
the user along with better credibility. Also it is
preferred source of communication among the
celebrities, politicians, businesses etc. It
provides real time informations as all the news
are shared on the platform.
The weakness is that the retention rate is low
because of lesser innovative features as per
trends along with unequal distribution of
tweets and various safety issues.
Opportunities Threats
The customer services by the organisation can
be improved along with integration with
various other related platform. Also they can
emphasis on support activities.
The no profit model of the organisation is a
threat as it affect the interest of the investors
also the fake accounts and hacking incidents
are threat for the organisation.
Analysis of resources and capabilities for Twitter includes:
 Valuable: The efficiency of human resource of the organisation is highly valuable for
Twitter as they organise management lead sessions with the help of which day can strong
managers that can satisfy each and every need of the organisation. Also their future oriented
employees enable them to manage their ongoing and improving feedback process so that
they can improve their operations. The better distribution system and relationship with the
supplier are valuable to the company as they facilities and to satisfy their customers
efficiently. The channel with businesses, individuals politicians etc. is highly valuable.
 Rarity: The company has been using data-based employee management system which make
them rare also the concept on which Twitter works that is a platform for sharing news,
thoughts and opinion by tweeting with limited characters is rare.
 Imitability: Data-based management system for employee is quite costly and difficult for
other organisations to imitate. Also they have been focusing upon consistent software
development and training of the people with which they can enhance their level of
competence. Also the concept with which Twitter works is difficult to imitate for others on
different level such as corporate level, personal level and social level (De Clercq, Brieger
and Welzel, 2019).

 Organisation: The people oriented approach of Twitter facilities them to collect and
maintain the data as well as to accept the innovation to take place within the organisation.
The human resource of Twitter and the concept on which they work gives them sustainable
competitive advantage while the distribution system and the relations with suppliers give them
temporary competitive advantage. But lacking in innovation and technology is competitive
disadvantage for them which they have to focus upon. The people oriented approach of Twitter is
a lesson for other organisation for managing task and competition efficiently with lack of other
resources in maintaining the market share and their revenue.
In addition to this the Twitter has proportion of cash with their higher current and quick ratio.
This reflects that company has significant resources for their capital expenditures. But due to
inefficient performance and lack of emergent strategy lead to decreased stock prices just half
then the IPO price even than company has significant resources for near future. The potential
resources of the company includes the weakening relationship with investors due to reducing
stock prices IPO as investors expected net income the company reported losses in the year 2014
and 2015. Twitter has a big pressure of the investors on their management due to which they
have to formulate better strategies for ensuring better income (Twitter stock falls below IPO
price, 2015).
PART 3
Critically analyse Twitter’s current strategies and propose a range of practical alternative future
strategies for possible adoption by the organisation
It is important for an organisation such as Twitter to analyser current strategies so that they
can determine future Strategies for the organisation that can facilitate them in accomplishing
their goals and objective. For analysing the current strategies and proposing future strategies
strategic models are used which is given below:
Porter's generic strategy: This is the model with the help of which strategic framework that can
provide competitive advantage can be identified. The three strategies discussed under the model
includes-
 Cost leadership strategy- In this strategy the company focuses to utilise their economies
of scale so that they can reduce the cost and make their product affordable and accessible

which is done by Twitter. This strategy enables the company to expand their market share
by attracting a large number of users (Banahene, Ahudey and Mensah, 2016).
 Differentiation strategy: This is the strategy with the help of which the organisation
aims to offer unique features so that better when you can be offered to the uses. The focus
of twitter has been on creating differentiation for their users. With the help of this
strategy the company can ensure better value and services to the customers.
This implies that the focus of on the hybrid strategy with the help of which they can ensure
differentiated services to their customers in affordable prices. This current strategy of Twitter
must be continued in future along with incorporation of innovative efforts such as customisation
of the profile, creating list of leadership experts top marketing experts etc. at HubSpot, hosting
Twitter chat and many more along with the feature free to use. These strategies will enable them
to easily expand their market as well as revenue.
Another model that can be used analysing the current strategy of the Twitter is Bowman’s
Strategic Clock (Figure 1). This model facilitate to develop an understanding of strategic
positioning of the company such as how the product can be positioned for ensuring sustainable
competitive advantage form other (Engert, Rauter and Baumgartner, 2016). The analysis of the
model for Twitter can be understood from the given clock diagram:

Figure 1: Bowman's Strategic Clock
The strategic clock model proposed by Bowman reflects the perceived value to the
customer against the prices of the product or services offered by the company. This model
provides 8 phases for positioning the product and service by the company. The current strategy
of Twitter reflects that the company has been focusing upon position 2 which is lower prices.
With the help of this strategy company can easily become cost leader in the market but due to
this the value to the customer cannot be increased. Because of focus on the strategy the profit
margin of twitter is low from each user against the high volume of twitters.
On the basis of analysis of porter's generic strategies and Bowman strategic clock it can be
analysed that the management of Twitter need to focus upon hybrid strategy which is considered
to be at position 3 in Bowman strategic clock. This is because it involves some element of lower
prices in comparison to the competitors along with some features that can create product
differentiation. Such strategy will facilitate Twitter in persuading customers with a combination
of enhanced value and at lower prices. This strategy will be an effective positioning strategy for
them as with this they can increase their number of users through innovative features and their

revenue from the business houses for their advertisements which better strategies (Mir and Mir,
2019).
b) Using the SAF strategic model, select and justify the strategy that you believe Twitter should
pursue in the future
Several factors has to be taken into consideration before formulating the strategy so that impact
of various factors can be managed efficiently. To support this, the strategies that are must be
assessed in terms of their usefulness and effectiveness it can be done with the help of SAF
strategy model which stands for suitability, acceptability and feasibility (Hitt, Ireland and
Hoskisson, 2016). The analysis of the model for Twitter is given below:
 Suitability: It facilitates to understand the extent to which the strategic opportunity it is
suitable ford organisation. For this external as well as internal analysis is done and on the
basis of such analysis of Twitter it is identified that they have significant level of
opportunities in macro environment along with better availability of resources,
capabilities and competence which can facilitate them in tapping the market through
innovative and creative features.
 Feasibility: The feasibility is analysed in context of the identified opportunity so that it
can be ensured that the result identified from external analysis are beneficial and can be
preceded with. In case of Twitter, they have better availability of funds, efficient and
competent workforce, corporate vision and ethical practice. All these will enable them to
adopt the new deliberate strategies and even emergent strategies for accomplishing their
objectives (Gans and Ryall, 2017).
 Acceptability: This factor facilitates to understand the risk associated with the strategies
and the impact of various internal and external factors such as stakeholders, competitors,
government policies etc. on such strategies. The relationship of Twitter with their
investors is not good but the proposal strategies will not be affected by them. Similarly
the external environment will not have any impact on the strategies. The profitability of
the company can be ensured with this as in social networking industry adoption of
technology which innovative features can easily ensure success of the organisation.
On the basis of analysis of various strategic models and concept, hybrid strategy can easily
be adopted by Twitter it is considered to be most suitable strategy. Along with this various
recommendations are made to the company which includes:

 Effective leadership is crucial for the organisation for accomplishing their objectives with
the help of strategy as leaders within the organisation keep their employees motivated and
committed towards the overall organisational goals and to act as per the strategies.
 For taking competitive advantage the focus of the Twitter must be on expansion in the media
industry as it is considered to be the reliable platform for all the breaking news. To support
these categories of the users must be made so that market segmentation can be separated and
accordingly they will be catered.
CONCLUSION
It is concluded from the above report that the organisation has to manage their strategies in
such a manner that they are able to reduce the impact of adverse factors and can grab the
opportunities with the help of their resources and competence. Specific strategies for managing
the level of innovation and emerging technologies in the social networking industry for
managing the impact of competition and for satisfying the needs of the customers. For this they
have to undertake various analysis with the help of various strategic models and concepts such as
PESTLE, five force model, VRIO framework etc. so that better and effective strategies can be
formulated. Apart from this the SAF strategic model must be taken into consideration as it will
enables them to identify various strategies for different situation and accomplishing overall
organisational goals.

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