University Case Study: Facebook's Growth Strategies and Challenges

This case study report examines Facebook's growth strategies, starting from its inception in 2004 under Mark Zuckerberg's leadership. It analyzes the company's rapid expansion, driven by its innovative approach and ability to connect people globally. The report delves into Facebook's evolution, including its adaptation to mobile platforms and diversification beyond online advertising. It identifies key opportunities for growth, such as expanding into developing markets, while also acknowledging significant challenges, including privacy concerns, competition from rival social media platforms like Twitter, and the need to maintain user engagement. The report discusses various alternatives and tactics Facebook has employed, like the News Feed and Beacon, and analyzes the impact of these strategies on user privacy and market performance. It also highlights the importance of addressing privacy issues and maintaining credibility to ensure continued growth and success. The study concludes by proposing recommendations for Facebook to sustain its positive long-term market performance, considering both internal and external factors.

Running head: STRATEGIES FOR GROWTH
STRATEGIES FOR GROWTH
Name of the Student:
Name of the University:
Author note:

1STRATEGIES FOR GROWTH
Table of Contents
Introduction................................................................................................................................2
Background................................................................................................................................3
Alternatives................................................................................................................................5
Proposed Tactics........................................................................................................................7
Recommendations......................................................................................................................9
References:...............................................................................................................................15

2STRATEGIES FOR GROWTH
Introduction
Facebook is considered to be one of the fastest growing e-commerce company that
have a very strong innovative value on its start-up, created by Mark Zuckerberg, the founder
of the company, in the year 2004. As a young entrepreneur, he managed the organisation
effectively and ensure a continuous growth and sustainability (Turban et al. 2015). It is under
the leadership of Zuckerberg that Facebook today, has become the fastest growing social
networking website in the world. It strived for connecting people all around the globe having
a clear mission for giving people the strength and power of making the world more connected
and more open. It aims towards helping the individuals to share, discover and to express
themselves to their family and friends. A great opportunity for Facebook to grow is gained by
the emergence of mobile phones. It is to note that Facebook was often accessed through its
full website on computers (Lubian and Esteves 2017). But, with the emergence of increasing
trend was to make it usable on the go, through mobile phones and smart phones. However,
this trend further resulted in a significant challenge to the ability of Facebook for collecting
revenue as of the fact that advertisements were very tough for placing on the mobile
applications of Facebook without compromising the experience of the users. Still, there are a
wide number of opportunities present for the company to develop and growth in international
borders. It has the opportunity of diversifying beyond its key online advertising and social
media business. Notwithstanding this fact, there are also several issues at Facebook like that
of privacy that is of high importance and that is a major factor stop Facebook from further
growth and development.
Despite of the world-wide great achievement, Facebook is facing some strong
challenges like competition from the parts of micro blogging services such as “Twitter”,
managing the expectations and needs of the young generation, the tech savvy adopters who
demands for more open social interactions, maintenance of the old users who need some

3STRATEGIES FOR GROWTH
selective and limited social realms and radical changes on the home pages of the readers
(Ruehl and Ingenhoff 2015). With the same, it is also to mention that the quest of Facebook
for becoming a leading social interaction website, along with an important tool for business
and personal networking for the ones who are connected is continuously hampered by a huge
challenge like that of competition from the rivalries, the lawsuits, privacy problems and the
need for providing some better interaction services and maintaining its credibility. One of the
other risks that was pertained for the ability of Facebook to stay a private company was that
of Forced IPO (Initial Public Offering). The rule of “United states Securities and Exchange
Commission (SEC) required the private firms with more than 500 owners to abide by the
practices of accounting a disclosure that are required of the public firms by Sarbanes-Oxley
Act of 2002 (Li 2014). This rule is the reason behind why Google took the decision of going
public in the year 2004. This is why, Facebook is also at the risk of having an IPO in the
coming future. This paper shall elaborate on providing a brief background of the case and
suggest some alternatives and tactics to help Facebook maintain its positive long-term market
performance.
Background
Facebook is considered to be the largest social media firms present in contemporary
world. The original Facebook website went live in the year 2004. It spread rapidly and just by
the end of the same month, (February), there were about ten thousands of users who
successfully registered on the Facebook website (Harper, Kennett and Reisel 2015). It is also
to note that Facebook was set apart from the other available social networking sites like
Orkut, MySpace and Friendster and in this way it developed from one college to another with
the use of dot-edu email address as a verification of a collegiate affiliation and an identity of
the new users. However, by the end of May, 2004, the company achieved several milestones
including redesigning and re-launching the Facebook site, upgrading and added to the back-

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end infrastructure of Facebook, appointing Sean Parker as the president and receiving about
500,000 dollars in seed capital from Peter Thiel (one of the prominent venture capitalist)
(Barrigas et al. 2015).
The company hit 1 million of users by December 2004 and by May 2005, it had managed
to hit 2.8million of users at 800 colleges. Such a significant growth and development of
Facebook notably sparked a bidding war among about 12 venture capital companies who
were eager to take part in the success of Facebook (Montgomery 2015). Winner among these
dozen of firms was the Accel Partners that invested about 1.7million of dollars in a deal that
valued Facebook at 100million dollars. By the end of 2006 again, the company was
considered to be the 2nd largest social networking site after the MySpace. At about 12million
active users, it was about a quarter of the estimated 43million of users of MySpace. At an
average, the users of Facebook started spending about an hours on the website every day and
this figure started growing every month (Mukherjee 2015). Its 4th quarter and full-year 2015
performance has proved that the firm has a well-focused approach and at the same time, has a
lot to offer to the company shareholders. Today, the company has a huge reach with about 1.2
billion regular active users. Also, its wide reach and shortage of competition is very important
for the success of the company. With high penetration of internet along with the acquisitions
of Instagram and WhatsApp, Facebook has very effectively positioned itself as a market
leader.
The financial conditions of Facebook is also very strong as of the improving margins and
the present cash flows. With the same, the 44% of the revenue growth of the company in the
fiscal 2015 has increased to more than 50% in fiscal 2016 (Davilla et al. 2015). However, the
concerns of privacy had created a serious tension in between the interest of Facebook in
fostering free flow of the information and a justifiable interest on the parts of schools, law
enforcement, administrators and school officials for protecting the students from the risks of

5STRATEGIES FOR GROWTH
disclosure of the private information in the semi-public realm (Lubian and Esteves 2017).
Hence, the quest of Facebook for becoming a leading social interaction website, along with
an important tool for business and personal networking for the ones who are connected is
continuously hampered by a huge challenge like that of competition from the rivalries, the
lawsuits, privacy problems and the need for providing some better interaction services and
maintaining its credibility.
However, from the case study it is also clear that people often criticise and have criticised
Facebook for its seeming willingness for sharing all the information that users allow. Several
users have come to doubt the commitment of Facebook in terms of privacy. There are several
issues over privacy and security of the personal details and information on the online sites as
there are several people who have profiles both in private and public firms that display their
creators’ identities. The reputation of Facebook is hampered by a huge challenge like that of
competition from the rivalries, the lawsuits, privacy problems and the need for providing
some better interaction services and maintaining its credibility (Lubian and Esteves 2017). It
is of no doubt that Facebook has successfully built a successful business by means of helping
the people to publish some detailed information regarding their lives. The Facebook Users
expect some of these details to become public and at the same time, the others to be held
more closely (Miguel and Casado 2015). It is to mention that the adult users of Facebook
should be free from publishing the information regarding their lives if they want to do so.
However, lately, several users have come to doubt the commitment of Facebook in terms of
privacy. There are several issues over privacy and security of the personal details and
information on the online sites as there are several people who have profiles both in private
and public firms that display their creators’ identities.
Alternatives

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In the year 2006, Facebook started challenging the user expectations of privacy by
launching “Mini Feed” and “News Feed”. Prior to this launch, the users had to visit the
individual profile pages of their friends to see a log of their activities on the Facebook
website. The “News Feed” was set as the homepage of all users after they login to Facebook.
The response of the users to this was negative (Lo 2018). Majority of the users link this with
the privacy issue claiming that very few people wants everyone to automatically know what
they update and people always want a little space and privacy, even it is on the Facebook.
The use of News Feed as the homepage is just “too creepy and too stalker-esque” and people
wanted this feature to go (Lubian and Esteves 2017). Furthermore, in the year 2008,
Facebook launched Beacon, the engine that drove the growth and development of the social
graph of Facebook. It is to note that Beacon enables the Facebook users to connect their
profiles to a total of 44 external partnering websites. It used to collect the data on the user
activities on those sites and at the same time, it also published the user activities on the
external sites to the News Feeds, all in absence of notifying the users and obtaining their
permissions (Kizza 2015). This was a great factor to cause high revolt among the Facebook
Users against the company and Mark Zuckerberg apologised for the same. Users rejected this
and Facebook shut down the Beacon in the year 2009 as one of the parts of the settlement for
successful class action lawsuit.
Again by the end of 2009, Facebook announced a new privacy standard as an
alternative and this defaulted the users to share their profile information publicly. However,
this again made the users angry as majority of them criticised it has new privacy changes that
intended towards pushing them towards sharing their information publicly than even before
(Waldman 2015). The “transition tool” that guided the users through the configuration would
suggest the setting for sharing the content that they post in the Facebook like their status

7STRATEGIES FOR GROWTH
updates, messages and the wall posts to all the Facebook users or the internet users, despite of
having setting the default privacy level limited to the “Your Networks and Friends”.
Furthermore, as Facebook is widely been used in several developed and developing
nations, it is therefore focusing on the developing and the emerging ones that still have low
rates of internet penetration. For instance, in the case of India, the rate of internet penetration
is 35 percent as compared to that of United States that is 89 percent. It is to mention that
Facebook seeks for offering free internet in majority of these developing and developed
countries by means of the subsidised plans such as Free Basics that works with the local
internet carriers for providing the free services that are basic (such as using Facebook) to all
the mobile users. However, such services require very high amount of initial investments and
Facebook likely hopes for recouping these costs if these new internet users sign up for the
social network of its. This is indeed a very clever plan but it needs to be noted that it has
raised several red flags among most of the neutrality advocates who opined that “Facebook
exerts unfair control over free internet platforms like Free Basics.” These things resulted in
the concept or idea of free basics being rejected. However, Facebook still is planning to
introduce this service in the other markets in Asia, Middle East and Africa, excluding India as
it has been rejected in India already (Duffett 2015). With the same, one of the other negative
aspect of this strategy or idea is that it has the possibility of making it difficult for the rival
social networks to gather any ground in the market.
Proposed Tactics
It is to mention that Facebook has a big responsibility to keep all its users’ data
private and safe. The reputation of Facebook is hampered by a huge challenge like that of
competition from the rivalries, the lawsuits, privacy problems and the need for providing
some better interaction services and maintaining its credibility. Below are mentioned some
alternatives to overcome these issues:

8STRATEGIES FOR GROWTH
a) There have been several efforts for putting in the “seal programs”, where the logo works
towards certifying that a social network has published a policy for privacy and then
follows the same (Subtirelu et al. 2019). Notwithstanding this fact, the social networking
sites are still very complicated and it could be proved to be tricky in practices for making
them following the different policies that were aimed at the banking and the e-commerce
sites. Apart from this, another attempt for putting in some or the other kind of the privacy
for social networks was the Platform for the P2P (Privacy Preferences Project) set up by
the W3 (World Wide Web Consortium). It is actually a framework for the different
automated privacy discussions where all the websites such as the social networking
discloses all their privacy practices in the Standard machine-readable format such as
XML. After then, the website browsers can automatically retrieve the P3P privacy
policies and then could compare them with the own privacy preferences of the users.
b) Facebook can introduce a Dating application in order to retain its potential customers
from using the other dating applications. It is widely seen that there are increasing
number of customers who are using dating apps to interact with different people over
internet. This dating app by Facebook would make it easier for the people to find their
love and starting some meaningful relationships. In this fields, there are many potential
competitors of Facebook like Tinder. In this process, Facebook can also give its users the
potential of integrating their posts on their instagram profiles directly into their dating
profile and at the same time, the facility or say, the ability of adding their instagram
followers to the lists of their Secret Crush along with their total Facebook friends. Today,
the more and more number of younger generation are opening their profiles on Tinder
like dating apps. This is further distracting the Facebook users from using the Facebook
profile and they are tending towards spending more time on surfing these dating apps.
This indirectly is costing Facebook a good number of reduction in its user base and

9STRATEGIES FOR GROWTH
ultimately, is leading in fall of its revenue. Opening its own dating app that would be
linked with the Facebook profile and their Instagram profile would be a good choice for
Facebook to retain its customers and to attract more customers towards it.
c) Facebook should stop the feature of sharing data regarding the religious and political
preferences with the third parties and advertisers. This is likely to make it tough for the
advertisers to target the people susceptible to the propaganda and fake news. This would
also create a hindrance for the “Balkanisation of Society”, which has been decried by the
ones like Barack Obama. While the most recently announced verification requirements of
the Facebook for the political advertisers are positive and productive development, they
might not deter the well-funded state actors who are likely to circumvent the rules and
regulations by making use of the local proxies. With the same, it should also limits down
the share of details and information with the 3rd party applications on its platform.
d) Furthermore, Facebook should focus more on spending time listening to the users.
Although, it is of no doubt that the company do accepts and realise the fact that it cannot
always give in to the growing and changing demands of the users but it should be noted
that it also needs to realise that the Facebook users are required to be happy enough with
different things that are going on. It is only possible if they start listening to what the
users want. It should ensure that users do not need to deal with the complicated privacy
settings and at the same time, they can be rest assured about the security provided by
Facebook to them while talking with their friends on Facebook and getting socialised.
e) One of the several parts of the reasons for which Facebook is facings issues today is that
of its desire for increasing its bottom line by means of advertising (Thorson 2014). It is to
mention that Facebook understands that the more open the profile information of the
users is, the more likely it is for the users to attract the advertisers from different fields
that want to target some specific portions of the user base. Advertising revenue is indeed

10STRATEGIES FOR GROWTH
a significant component in the revenue of Facebook but it to understand that it cannot
dedicate all its operation to this field.
Recommendations
It is to conclude from the above analysis is Facebook is indeed a powerhouse as of the
fact that it has been conceptualised on its development and growth in the social networks and
has evolved its news feed into one of the full-fledged platforms, which the former generation
rivals of Facebook such as Twitter and Myspace have failed to attain. Despite of the world-
wide great achievement, Facebook is facing some strong challenges like competition from the
parts of micro blogging services such as “Twitter”, managing the expectations and needs of
the young generation, the tech savvy adopters who demands for more open social
interactions, maintenance of the old users who need some selective and limited social realms
and radical changes on the home pages of the readers. However, if Facebook strives for
widening its moat with some smart investments like making alternative apps like Tinder or
dating apps, it could become harder for its potential competitors to beat it in the current
market and to keep up with Facebook. It is recommended that Facebook should focus more
on controlling the issue of intense competition from its potential market rivalries. Among the
hundreds of modern online media websites present on the internet today, the sites like
Instagram, LinkedIn and Snapchat are considered to be the direct competitors of Facebook.
Twitter is also a key competitor but both serve a different purpose and this is why, risk from
Twitter is comparatively less as compared to the above mentioned ones as these social media
companies or sites are continuously growing their number of audience and at the same time,
expanding their audience reach.
Below is presented an implementation plan for this tactics. Firstly, market assessment
needs to be done by means of undertaking surveys and feedbacks and developing some
extensive portfolio. Secondly, the company managers and the other experts and responsible

11STRATEGIES FOR GROWTH
persons need to consult about the same with the stakeholders identifying the issues and key
takeaways. Furthermore budgeting and assessment of the different capabilities of the
organisation is required to be done by the accounts team in the organisation. In this process
they should assess the top priorities of the organization while communicating with the
accounts department in the organization, developing budgets on the capital expenditure and
the ROI and undertaking a cost- benefit analysis for the new project. Thereafter, the HR
professionals of the company should invest in recruitment and selection of the technical
specialists and training the other existing employees in the organisation. Thereafter, they
should develop some blueprints and create the dating application with the help of app and IT
developers. Collaboration between the existing and new recruits for empathizing and
prototyping the new design of the application is very important in this stage. Finally the
dating app should be promoted through different social media platforms such as Instagram,
Twitter and YouTube. It would also need to undertake Search Engine Optimization activities
for making the application largely available to the communities. Lastly, they shall be
monitoring and controlling all the activities while assessing the feedbacks from the different
users in forms of reviews while improvising the application as per the concerns and fixing
bugs and glitches. The entire process shall be of 27 months.
Goals Activities Responsible
person
Timeframe Rationale
Market
assessment
Undertaking surveys
in the markets with
the objective of
identifying the recent
trends.
Assessment of the
internal and external
environmental
factors.
Developing extensive
customer portfolio
reports based on the
needs of the end
Market
analyst
2- 4 months The market
assessment
would enable
the organization
in identifying
the feasibility
of the
application in
the markets as
per the
changing tastes
and preferences
of the

12STRATEGIES FOR GROWTH
users customers
Consultation
with the
stakeholders
Undertaking
meetings, seminars,
open discussions and
forums with the
different stakeholders
with the objective of
seeking their
viewpoints on the
diversification
process
Issuing newsletters to
the stakeholders
Grading and
prioritizing
stakeholder concerns
based on the trend
analysis
Managers.
Project teams,
investors,
creditors,
shareholders,
hierarchy of
management
3 months The
consultation
with the
stakeholders
would enable
the organization
in encouraging
the active
engagement of
the stakeholders
in the different
developmental
processes that
are planned by
the organization
Budgeting and
assessment of
capabilities of
the
organization
Assessing the top
priorities of the
organization
Communication with
the accounts
department in the
organization
Developing budgets
on the capital
expenditure and the
ROI
Undertaking a cost-
benefit analysis for
the new project
Accounts
team in the
organization,
the hierarchy
of
management
1 month The budgetary
activities would
enable the
organization in
identifying the
financial
feasibility and
benefits that
would be
earned by the
same through
the safe
implementation
of the project as
per the needs of
the venture. On
the other hand,
the budgeting
would allow the
organization in
estimating the
costs that might
be incurred by
the venture
while
introducing the
application.
Recruitment of
technical
specialists and
training of
existing
Assessment of the
talent based needs of
the organization
Advertising on
different media
Hierarchy of
management,
HR personnel
of the
organization,
4- 5 months The recruitment
of specialist
talents would
enable the
organization in

13STRATEGIES FOR GROWTH
employees channels for
attracting the
attention of technical
skills
Screening and
recruiting IT and app
developers from the
different sources
Raining and
developing the skills
of the existing staffs
to contribute to the
new application
development process
the
supervisors
from the
operational
departments
improving the
performance of
new application
development.
The
organization
aimed at
recruiting IT
and app
designer based
talents, which
will contribute
to the
continuous
operations of
the venture.
Again, training
of the existing
employees
would allow the
organization in
reducing the
costs of
operations
while
contributing to
the
effectiveness of
the operations
of the venture.
Developing
blueprints and
creation of the
dating
application by
Facebook
Collaboration
between the existing
and new recruits for
empathizing and
prototyping the new
design of the
application
Developing user
interface for the
application
Finalizing the design
of the application
Creation of the dating
application
IT and App
developers
4- 6 months The
development of
blueprints and
creation of the
application
would allow the
organization in
proposing the
same to the
customers
Promotion of
the dating
application
Promotions through
different social media
platforms like
Twitter, Instagram
and YouTube
Devising promotional
Marketing and
social
advertising
agents, SEO
practitioner
6 months The social
media
promotional
activities would
enable the
organization in

14STRATEGIES FOR GROWTH
flash ads through
different available
applications
Undertaking Search
Engine Optimization
activities for making
the application
largely available to
the communities
maximizing the
involvement of
the community.
The utilization
of wide range
of media
vehicles would
enable the
organization in
widening the
scope of
reaching out to
the target
audience
Monitoring and
controlling the
activities
Assessing the
feedbacks from the
different users in
forms of reviews
Improvising the
application as per the
concerns and fixing
bugs and glitches
IT and App
developers
3 months The monitoring
and controlling
activities would
enable the
organization in
inducing
continuous
innovation in
the application,
correlating to
the changing
needs of the
customers

15STRATEGIES FOR GROWTH
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