Facebook Inc. Business Environment: A Detailed Analysis

This report provides a detailed analysis of the business environment in which Facebook Inc. operates. It begins with an introduction to the social media market and its significance in modern business promotion. The external environment is examined through a PESTLE analysis, covering political, economic, social, technological, legal, and environmental factors impacting Facebook's operations, including the effects of Brexit and technological advancements. The microenvironment is analyzed using Porter's Five Forces, assessing the competitive intensity and attractiveness of the industry. An internal environment analysis identifies Facebook's resources, capabilities, and core competencies. Finally, a SWOT analysis summarizes the strengths, weaknesses, opportunities, and threats faced by Facebook Inc. in the global market, offering insights into strategic challenges and potential growth areas. Desklib provides access to this and other solved assignments for students.

INTODUCTION TO BUSINESS ENVIRONMENT

Table of Contents
Introduction......................................................................................................................................3
1. External Environment analysis within which Facebook Inc. operates........................................4
Political Factors...........................................................................................................................4
Economic Factors........................................................................................................................5
2. Microenvironment (Industry environment) analysis within which Facebook Inc. operates.......8
Conduct an analysis of the internal environment of Facebook Inc...............................................10
4. Identifying the strengths, weaknesses, opportunities and threats faced by Facebook Inc.........16
Conclusion.....................................................................................................................................18
Reflective Log...............................................................................................................................20
Reference List................................................................................................................................29

Introduction
In this age of globalization and modernization, social media market plays a predominant role in
the promotion of a particular product and service. A social media market incorporates elements
like e-marketing and digital marketing. The different social media platforms implements built in
data analytic tools that ensure the tracking of the success and progress of the ad campaigns. With
the advent if social media market a strong network has been established between the companies
and their potential customers.
In this report a detailed analysis of the various factors that impact the business of Facebook Inc
has been conducted. The factors both external and internal affects the growth and progress of the
company and also portrays the key drivers that changes the ways people share their views,
photos, ideas and the regular activities that they do with their friends and the general public. The
report will also illustrate the challenged faced by Facebook Inc in the competitive global market.

1. External Environment analysis within which Facebook Inc. operates
Facebook Inc, a social media organisation deals with those products that help people to connect
and share through their computers, mobile devices and different surfaces that enables the public
to share their videos, photos and other activities with different forms of audiences that can be
their friends or general public(Hayden, 2016 ).The products the business incorporate are
Facebook, WhatsApp, Messenger, Oculus and Instagram.
The social media market operates globally and the operation and functioning of the business
depends largely if not wholly on the external factors that tend to affect the functioning of the
company. In this context a thorough analysis of the macro environment gains a priority.
The Pestle Analysis model portrays external analysis of the essential and important factors in
the remote and the macro environment of the company. The analysis will help the company to
understand and adjust the different business strategies to maintain their market position and
popularity. The factors can be the key drivers of change for the business. To understand the
macro environment impacts on the company’s operation, The Pestle Analysis has been discussed
here.
Political Factors
The business of the company is related to the political scenario of the country. The different
government policies and the governing bodies of the country play a pivotal role in the business
progression. The major factors in the country’s politics can be the political stability of a
developed country like United Kingdom. The support given by this country’s government for an
advanced globalization and social media marketing in this place plays a crucial role for Facebook
(Tuten, 2017). The diversifying business of the company can also gain opportunities to expand
their business with the varied bilateral ties. The bilateral ties play a crucial role of a key driver in
the business. In United Kingdom due to lesser risk of the invasion of the military the political
scenario can avoid unrest and conflicts. These factors help the business of Facebook Inc to
expand and grow.

However, it is immensely remarkable to mention the Brexit impact and the risks involved in the
expansion of the business in this part of the world (Del Vicario et al., 2017). The decision of UK
to leave the EU has brought a radical change in the world of global business. United Kingdom
has been giving 1.3 % of revenue for Facebook and with the Brexit a swing in the exchange rates
and the rise of inflation has proved to be a threat to the business of Facebook not only in Europe
but also in the major geographic territories.
Economic Factors
UK has been considered as the leading power in the trade industry and the different financial
centers. In the year 2018, the economy of the country has been in a better health. The economic
growth has started to rebound in the year 2018 after slowing down in 2017.This has enhanced the
business of Facebook in the growing economy of the country (Albarran, 2016).The overall
strength of the global economy and the advantages of the British exports from weak pound will
help in increasing the GDP Growth and this in turn will enhance the business of the social media
marketers like Facebook Inc. The inflation is also being expected to fall in this year which paves
the path for the rebound in the spending of the customers. This also acts as a key driver of
change in the business model of the company. This can be helpful for a social media market as
low inflation can empower the customers with more buying power of tablets, computers, Mac
books and this in turn can help the business get a rapid speed.
In spite of the different opportunities created by the healthy economic growth still there can be
some risk factors involved in the country’s economy. The concerning factors like the fiscal
crises and the asset bubbles can foster a hindrance for the business progression of Facebook.
The inability of filling the gap between the tax revenues and the expenditures can create a risk
factor for the company.
Social Factors
To maintain a balance in the social media markets it is significant to understand the social factors
and the social framework of the country that can affect the business of an organisation that
incorporates the social being called Man. In this context it is noteworthy that the income and the
wealth of the people of UK have progressed a lot from the previous years. The employment rate

has also taken a rapid speed which in turn has enhanced the earnings of the people. The general
public forms the market of the social media sites (Kabadayi and Price, 2014 ). Hence their
income and earning power will always act as a boon in the development of the business of
Facebook because the customer’s capability to make a valid use of Watsapp Facebook,
Messenger and other applications becomes much more relevant. The education rate of the people
have also shown a rise in the graph and the rising education rate will enhance their usage of the
different social media applications with more knowledge and skills in the digital world.
However the health status of the country has decreased in percentage and the overall ageing rate
of the citizen is also growing and this will create a threat to the business of Facebook because
with ailing and ageing citizens the business cannot prosper much as the applications developed
by Facebook is meant largely for the youngsters.
Technological Factors
This factor plays an accelerating role in the overall business progress of the business. The
technological progression of UK with various tech investment projects taking a crucial part in the
improving markets of the country (Chang et al., 2015). The tech lead operation In UK has
created a platform for the social media market to gain a booming success. Information and
Communication Technology has become a part and parcel of the social fabric of UK.UK offers a
perfect technological infrastructure for the growth of the social media market. The tech business
of UK values a minimum of 1 billion dollar and the technological advancement has also been
experienced in the digital world. Facebook thereby can gain immense opportunities to work in
complete alignment with the advanced technological framework.
Although the technological progression has been creating a ground for Facebook but the security
issues also gets challenged because of this. Majority of the world population have an account on
Facebook, Watsapp that can be a threat to their personal details. The information of the general
public can get hacked and even be shared to construct terrorist attacks. It has been found in the
past that the Facebook details that have forming a biased voting activity.
Legal Factors

The legal policies and acts also define the macro environment for a business to grow. The
improvement in the patent laws can definitely help the business grow without any fear of getting
replicated by another organisation. Moreover the regulatory support provided by different
regulatory acts for free Wi-Fi has brought the business of Facebook to its zenith. Free Wi-Fi can
ensure that the use of different applications like Watsapp, Facebook, Instagram becomes more
regular and prevalent among the citizens. This can also expand their social media reach in all the
parts of the world.
The legal policies and acts in UK can also project some risk for the business. The social media
mass surveillance and the online interception policy of UK can hinder the growth of the social
media markets because the public in general will not like the fact that their communications are
put under surveillance.
Environmental Factors
The emphasis on the sustainability of the business is very significant and Facebook can create an
opportunity in UK, to accelerate the business sustainability conditions by enhancing the
awareness related to the natural environment. In the recent times Greenpeace have been doing a
praiseworthy job of informing the general public about the different environmental impact. This
project can also have an opportunity to get publicized in UK and bring a change in the overall
environmental condition there.
However in UK more use of the social media sites has been creating health and environmental
hazards. The use of mobile phones, tablets, and computers leads to the emission of dangerous
radiations that can bring health hazards ( Yadav,et al., 2015). The human brain can also get
affected with the radiation ad this can be a hindrance for a county like UK where people are
immensely conscious about their health and well being.

2. Microenvironment (Industry environment) analysis within which Facebook Inc. operates
Apart from the macro environment that has been affecting the business of Facebook there are
some internal or more precisely micro environmental factors that can influence the business of
Facebook. To analyze the micro environmental factors affecting the business a thorough analysis
of the Porters Five Forces can be discussed in details.
The Porters Five forces are the five key drivers that can have both a positive and negative
impact on the business. The Porters Five Forces is considered as a tool that helps in analyzing
the competition of any business (Dobbs, 2014). The Five forces involved determine the
competitive intensity of the organisation and also identifies the attractiveness of the business
related to the profitability of the organisation. The Five forces are:
Current Competitors: The Porters five forces concentrate on the latest competition in the social
media market. Facebook has to compete with a number of social networking sites like the
Google Plus or the Tumblr and also has to compete to such niche sites like LinkedIn and Twitter
(Turban et al., 2017) With varied platforms Facebook can compete in a more direct manner with
their competitors but it has been observed that the business does not appeal equally to all the
demographics. For an instance the younger generation prefers to use Facebook and Watsapp
whereas the professionals make use of the LinkedIn ,Twitter and one can analyze that in the
competitive market Facebook has been facing a moderately a higher risk. Facebook has to
undertake various policies and develop business strategies to enhance on their professional
features.
Supplier power of bargaining
The suppliers of Facebook also have bargaining power. Suppliers are the external stakeholders of
the business who are responsible for building and maintaining the servers that are associated with
the varied medial platforms of Facebook (Schleper et al., 2017). Facebook being a business giant
that can overpower the supplier bargaining to a greater extent .However, in this genre supplier
can also be those complements that help Facebook to operate the way it is such as Internet. For
an instance if the internet usage becomes capped people will also limit their usage of the social
media even if Facebook operates in its best form. The cost as well as the speed of internet can
increase the time allotted by the users on the site. The suppliers being a key stake holder can

thereby regulate the use of Facebook by the varied range of the customers all over the world. The
different sites and the services are also the key stakeholders that offer the Facebook Login for the
purpose of identification. This allows Facebook to acquire new information whenever an user
logs in or out the site. These key stakeholders have immense power in controlling the
progression of the business.
Customer’s Bargaining Power
The bargaining power of the customers plays a major role in the determination of the business of
the organisation. Many people use and have accounts on different social media platforms. It is
important to mention that people getting engaged outside the Facebook family will endanger the
chances of spending their time on Facebook (Hajli, 2014). This factor can bring the bargaining
power of the customers who are also the key stakeholders in the global social media markets.
Facebook is a free application and it takes nothing for the customers to change their networking
sites. Facebook makes the users check their account any time but the company has to make the
customers spend more time on their sites if they want to make money on the market researches
and the ad spaces that will come from all the data collected by Facebook. Facebook has to make
the customers remain more engrossed in the services provided by them.
New Entry Threats
The use of varied forms of smart phiones and online platforms has become inexpensive and this
can be a threat to the organisation. The company has to bring their customers into confidence by
providing absolute security to their personal information and thereby creating the economies of
scope and scale to get a competitive advantage (Singla, 2015). Facebook till now has been the
heart and soul of the media platforms but one new entry can beat all the odds and the game gets
over. The main users here id the teenagers and every time the Facebook share price dips when a
new report comes that the teenagers are not at all active on social sites. New app imposing a
magnetic pull on the customers can have an adverse effect on the business of Facebook. The risk
is although moderately low here.
Substitutes Threat

Facebook has gained immense popularity but the social media site as a whole is vulnerable with
changing technologies and digitalization (Basak and Calisir, 2015 ). It takes no time for the
people to switch to a substitute.
For an example new parents would love to share their photos on a parenting site rather on
Facebook. Organisation like Apple led to the development of closed knit groups that may not
feel to use Facebook as their medium of communication.
Conduct an analysis of the internal environment of Facebook Inc.
Internal environment consists of the factors, which exit inside an organization. Organization has
more control on internal environment in comparison to the external environment. The business
planners should focus on these factors in order to identify the strengths and weaknesses.
The resources, capabilities, core skills and core competencies in Facebook Inc have a strong
effect on performance of the organization. These are indentified by analyzing the internal forces
in order to match with the opportunities, which will b identified by considering the external
forces.
Resources: Resources are considered as the properties of an organization. These include the
individuals, skills, equipments, managerial resources and capital. Resources are two types. One
is tangible and another is intangible (Kuratko, 2014).
Resources Meaning Types And Examples
Tangible These are physical resources.
The market value of tangible
assets is easily determined.
The types are as follows.
 Physical: Plant and
Equipment
 Financial : Funds and
borrowing capacity
 Technological:
Trademark and copy

rights
Intangible These are Non-physical
resources.  Human: Organizational
plans, knowledge and
skills
 Reputational: Brand
value, customer
services and quality of
product and services.
 Innovational:
innovative skills and
ideas
The physical resources of Facebook like network equipment, computer software and leased
equipments have increased 40% in 2017 as compared to the previous years. The brand value and
customer service of facebook is highly visible to all, as it has used many innovative skills from
time to time. The employees of Facebook Inc are trying their best to make the facebook page
better and customer friendly. Each year more than 20,000 people are hired by company in order
to drag the new generation skills in the business process.
Capabilities: This is the collaboration of all tangible and intangible assets to achieve a visible
business goal (Appiah-Adu et al., 2018). The key components of capabilities are:

 Advocacy: This is all about improving the contents and allowing the customers to know
about the new stuffs. Facebook has adopted many strategies to align with global brand
value. The continuous improvements in the online pages have allowed the customers to
use different tools of facebook.
 Cost Control: According to Murnane and Thornley (2017), the management of facebook
Inc. has a system to review the accurate costs billed for the pay application from
contractors. The average project costs are maintained and reported on a daily basis.
Facebook has its own advanced, energy and water efficient data centers all over the
world. The data centers are powered by renewable energy, which has enabled the
organization to save the cost.
 Communication: The facebook Inc has made its page customer friendly. The company
communicates with customers to know their future requirements and issues by
conducting online surveys.
 Compliance: facebook Inc is subjected to comply with certain rules and regulations as
per the company act. The organization is also liable to adhere with Government policies.
It has rules to keep the customer data private.
 Efficiency: According to Appiah-Adu et al., (2018), the efficiency of an organization
depends on its work force, technology and infrastructures used by it. Facebook Inc. has
allowed the customers to use the application on less data and power. This efficiency has
achieved by the company with effective utilization of all the resources.
Core skills: The core skills of Facebook Inc. are highly organized and valuable for the
employees and customers. The leadership skills of employees to perform a task are highly
remarkable. They work with proper plans and motivate their subordinates to work as per the
plan. The employees give priorities on the tasks, which are more viable and productive. Another
core skills adopted by the organization is time management. In order to complete a task proper
time management is highly necessary. The employees use a planner to complete each project in a
particular period. The employees are very detail oriented. They believe that, minor errors can
cause a huge loss. They go through a task in detail in order to avoid each risk associated with it
(Wood et al., 2016). The important traits of Facebook employees are describes below.

Decision-making: The employees are motivated to take decision of their own without analyzing
the outcomes. This will lead the employees to become confident in their work.
Curiosity: The employees are given opportunity to work on new stuffs and use new techniques
Transparency: The organization culture is based on getting continuous feedback from employees
and customers, which is open to all.
Social value: The organization tries to use the young talent in the work place. This strategy
motivates individuals to express their thoughts and ideas on Facebook page.
Core competencies: Core competencies are the sources of organization’s competitive
advantages. This is the combination of resources and capabilities. This gives an opportunity to an
organization to identify the improved areas and weak areas, where it should perform well to
improve (The Macat Team, 2017).There are several criteria for developing a competitive
advantage.
 Valuable: This helps an organization to eliminate the risks and identify opportunities.
 Rare: The organization must be based on such products, that the competitors are very
less.
 Cost: This criterion has enabled the organization to develop its business in such a way
that, others will find the business costly to compete.
 Nonsubstituable: There must be no such alternative organization with same skills and
culture. This must be unique as compare to others.
The core competencies create value for an organization by focusing on the opportunities.
There major core competencies of Facebook Inc.
 Capacity to build a large client base over internet.
 Free communication platform.
 It allows people to promote their product and services.
 Efficient place for news feed.

According to Gereffi and Fernandez-Stark (2016), value chain analysis is an important effect on
the creating competitive advantages for the organization. This analysis has differentiated the
business operation of firm based on value creation. The activities undertaken by the firm must be
superior as compare to competitors. Value chain analysis involves certain activities, which are
primary and support activities.
Primary Activity: This activity involves production, sales and distribution of goods and services
and after sale services.
Support Activity: This activity gives support to the primary activity. This can be procurement,
technological development and human resource activity.
Value Chain Analysis in Facebook Inc.
Facebook Inc. uses value chain analysis in order to identify the sources of competitive
advantages among all the social media companies.
Fig 1. Facebook Value chain analysis
(Source: Tuten and Solomon, 2017)

Inbound logistics of Facebook uses different hard wares and technologies. It offers customers
with various intangible products like news feeds and contents. Facebook is available in various
languages and its customer base is very high. Facebook operations include maintaining of home
pages, profiles, applications, game pages and messenger platform. The outbound logistics of
Facebook is providing different contents through different websites. The company offers a range
of services like messages, video call, games, news and others. A huge number of employees are
involved in the marketing activity to improve the page consistently.

4. Identifying the strengths, weaknesses, opportunities and threats faced by Facebook Inc
To understand the internal and the external factors that can affect the performance level of
Facebook Inc. To understand these factors a detailed SWOT analysis has been discussed here.
SWOT refers to the Strength, Weakness, Opportunities and the Threats that help the company to
grow their business.
SWOT Analysis:
Strength
Facebook Inc’s strength has been supporting the market position as the top most social media
service provider. The strength of the organization lies in its
 Brand Image
 High Revenues
 Innovative Workforce plans
 Large base of the consumers
The brand image of Facebook is very strong and the customer base is also very high. The
workforce of the organisation is very innovative and designed in a manner that can help both the
employer and the employees (cheshnotes.com, 2016). All these factors together increase the
revenue of the organisation and hence get progression.
Weakness
Facebook also suffers from some weaknesses as per the nature of the business. Weaknesses are
those internal factors that can hinder the growth of the company (panmore.com, 2018). The
weaknesses are:
 Negative effect of the online advertising on the experience of the user
 Products and services that can be imitated
 Low level of diversification in the business.
The varied mobile apps and the social networking sites and the services can be easily imitated
and hence make the company vulnerable in the competitive market. The online advertising

system can also be a weakness as people could take advertisement as nuisance in their overall
experience of the social media. Low diversification can increase the exposure of the market risk.
Opportunities
The organisation can make use of the various opportunities available its business globally and
for this the external factors needs to be considered. The most relevant opportunities can be:
 Innovation of Products
 Diversification of business
 Market development and penetration
Facebook can make use of the opportunities of diversifying the online advertising and the social
media business (Hajli, M.N., 2014). Company has been taken steps to exploit the external
factors. For an instance the organisation has acquired the virtual reality business like the Oculus
VR. Morover the diversification can also reduce the chance of the market risks exposure. The
analysis helps the company to make reform of their strategies and the management directions.
Threat
Facebook must keep in mind the following threats in the online social media market.
 Cyber crime
 Imitation and Copying
 Saturation of the market
One of the greatest threats to the business is the imitation of the various mobile apps and the
development of social networking website. Imitation act as a threat, as it can reduce the market
share of Facebook. With the growing level of the membership the company can be the target for
cyber crimes (marketing91.com, 2018). Moreover with the growing saturation in the market the
business can get stagnated and lead the business hit the plateau.
The analysis has pointed out different issues that must be taken into account by the company to
maintain their growth and progression. It can be recommended that Facebook must involve
strategic management plans to reduce the amount of the cyber crime and also take initiatives to
diversify the business and thereby reduce the rate of market risk exposure. Company should also

continue with their Research and Development Investments in order to combat with the issues
related to cyber crimes. The business must also take steps to negotiate with the government to
reach out those places where it has nominal or no presence at all.
Conclusion
The impact of the various external and the internal forces has been through discussed to give the
readers an idea of the current scenario of the social media global market. The social media
market is immensely vulnerable and hence the sustainability of the social media business also
becomes very risky. Since the social media market is volatile in nature Facebook has to remain
in complete alignment with the external and the internal factors affecting the business. The
macro and the Micro industry analysis have been done to get a clear picture of the company’s
position in the global market. It is also essential to keep a track on the various internal elements
like capabilities, core competencies and the availability of resources that can take the business to
its zenith.

Reflective Log
1. Explain the differences between various types of businesses and their purposes
The type of business can be chosen based on three factors, which are ownership, taxation and
capital. As per my understanding, there are seven types of businesses entities.
A Sole proprietorship business is very simple and risk free. The ownership and control is
available with one individual. There are no specific differences between the business and its
owner. The owner is solely liable to all profits and losses associated with business. I believe, this
type of business require a certain license to operate. In this business, it is difficult to get funds
from banks and other financial institutions. So the owners have to depend on the own financial
sources (DCA1A, 2016).
Partnership business involves the agreement between two or more people. The profit portion of
the business is distributed among all the individuals. In my view, this type of business requires a
strong bonding between the partners, as they are equally liable to the losses and risks involved in
the business.
Limited Partnership is a kind of general partnership. I have observed that, its sole purpose is to
raise capital from different investors without focusing on the day-to-day activities. If I am
entering into limited partnership business, I have to register my business with state.
A Corporation is a kind of independent business, where shareholders have certain portion of
shares in it. Before establishing this business, I have to produce certain licenses and documents
in front of the Government. Liability protection is an important factor in this business.
Limited Liability Company is the combination of two other types of businesses, which are
proprietorship and Corporation. The members of the business are liable to the business operation
and the profits associated with it. Apart from this, I have found that this business involves less
paperwork. This kind of business faces a various tax treatment, while operating in different
states.

Non Profit Organization is not associated with profit making activities. The sole aim is to work
for the society. The revenue generated from the business operation is used in the welfare of
public. This type of business needs more paper works. The members of a nonprofit organization
work for the society and its development (DCA1A, 2016).
Co-operative organizations are very focused on generating profits. The profits, earned by the
organization are distributed among the shareholders. The business has board of directors, who
helps in decision-making process.

2. Describe the extent to which an organization meets the objectives of different
stakeholders.
The individuals having interest in the activity of an organization are called as stakeholders. Their
objectives vary depending upon their needs. Stakeholders try to protect their ownership by
evaluating their objective.
The investors have a certain percentage of shares in an organization. The management protects
the ownership of shareholders by working as a custodian. In my view, they invest in a company
with an aim of getting return from that investment. This is associated with some risks factors.
Each in formations related to the organization are purely disclosed with the shareholders. The
organization is subjected to pay back the shareholders in the form of dividends (Benn et al.,
2016).
The employees are another important part of the organization. They may be part of management
or normal staffs. The employees directly influence the revenue generated from the firm. I, as an
employee of an organization prefer to collect the information related to the business. My
organization gives different bonuses, pension plan and other employee benefits in order to
protect our interest. As employees are directly involved in the business operation, so each
organization must try to satisfy their employees by giving job satisfaction and security.
Organization also takes loan from bank and other financial institutions. Therefore, these
institutions have interests in the organization’s growth. They are highly focused on the growth
and stability of the borrower company. According to their financial position, lenders decide
whether they will get their money back or not. My organization is highly active in repaying the
loans in time.
Suppliers also want to know the financial condition of the organization. They need a guarantee
from the organization that, they will able to get the credit amount in proper time. The budgeting
needs of a firm are highly dependent on the suppliers. As per my understandings, an agreement
must be prescribed between the firm and suppliers ensuring that, suppliers will surely get their
payment without any delay.

The Government and its department also show some interests in the business operation. The
business activities and resources are important to determine and develop Government policies,
taxation rules and other company acts.
In my view, customers also play a significant role in business activities of the firm. Customers
are the end users of the products and services produced by the organization. They buy the goods
and services by paying the appropriate price. Therefore, customers do not want to compromise
with products. Their interest can be protected by providing quality products and after sell
services at a reasonable universal price (Benn et al., 2016).
3. Apply methods to examine the impact of the business environment on the activities of an
organisation
The methods like SWOT analysis, PESTLE, and Porters Five Forces I have been able to
understand different environmental policies are used in understanding the management of the
organization. Facebook is a big name in the digital technology, whose activities are being
analyzed globally. Through Pestel analysis I notice how the governmental policies are taken in
understanding diversifying qualities of an organization (Kursun et al., 2017). Brexit plays an
important role in bringing exchange rates in the business structure of European market.
Similarly, geographical influence is also influencing in using the social media platform. Growth
in GDP enhances businesses of an organization. Facebook has showed how fiscal policies can
cause hindrance in the organization growth. Risk factor comes to an organization when the gap
between expenditure and generated revenues decreases (Liu and Li, 2018). Similarly, Pestel
analyzes that the younger generations have a wide influence in expansion of Facebook.
Employment is comparatively high in the first world countries, which shows that the individuals
play an important role in shaping the infrastructure of an organization. It is also noticed that the
average-ageing rate of UK is comparatively high, which affects the business strategy of
Facebook a lot. Mostly elderly people never use such medium, for socializing so it is evident that
the younger generation use.
My thoughts in understanding the Pestle analysis that Facebook’s business has been shaped by
the social, political, technological activities taken by the consumers. If the social constraints
show that the corporation has not been accepted well by the consumers, then the enterprise has to

rethink the strategies that can help in generating more revenues. In the similar ways Facebook
plays an important role in political scenario, in the recent data analytics of Cambridge it is
showed how the social media has been used as form of political propaganda in the US
presidential election. In the political history how the social media has been used as a major
platform in manipulating an individual’s opinions. I think by Pestle analysis it can be seen that
how environmental issues are affecting in the growth of an organization. The success of an
organization depends not only in the economical policies taken by the central board. It is
dependent also how the consumers think about the usefulness of the services (Nugent, 2017).
Similarly through Porters Five Forces, I want to analyse how a different method has been used in
understanding the business growth of Facebook. In microenvironment, analysis of Porters Five
Forces shows how the organization analyses both the negative and positive impact on
organization (Moutinho and Philips, 2018). This tool is used by Facebook in understanding the
exiting competition in the market, and what measures have to be taken in increase such
competitive intensity. This analysis looks after the social media marketing.
Across different geographical context, it is noticed that different social media platforms use
different competitive strategies. It is evident how Facebook has been used in third world country
is comparatively different from the first world countries. The various policies have to be taken to
understand the business strategies of an organization. Suppliers are the highest stakeholders who
want to build up a strategic market for the consumers. So the suppliers bargain in finding the
right way to empower the organization. The success of the digital world comes into play when
there is no limit of internet connection. Through unlimited network connection, it is easy for the
corporation like Facebook to be accessed. Similarly, customer’s bargaining power also acts as a
determining tool in the success of an organization (Sanchez, 2017). Facebook has taken
economic strategies for the consumers also, like how to earn money through market researches.
The facebook advertisements also promote the sites as well as giving opportunities to the
consumers to earn. In the digital world, there are thousands of other social media platform, which
gives a constant threat to such a giant corporation to get replaced with any other bigger
organization. It is their innovative strategies or providing such environment to the consumers,
which can beat any other social media platforms. This platform has been one of the most usable
media platforms among the consumers because it provides a free usability of the platform to put
forward an individual opinion (Sedlmeir et al., 2017). According to my analysis, it is possible to

understand the social scenario of the organization by closely studying various factors, which are
affecting Facebook.
I think the popularity of Facebook is due to the immense use of free platform to put forward
easily the idea about one’s opinions. Facebook can be used by the consumers in a negative way
also as it is a global platform to express opinions, so it can be manipulated both in negative as
well as positives manners. Through the Porters Five Forces, it is easily analysed that micro-
environmental issues play an immense role in understanding the business structure of Facebook.
Through SWOT analysis, the organization’s internal environment can be understood in a detailed
manner. Facebook has been one of the largest social media providers across the world. The
strength of the organization lies how the organization thinks minutely about the factors required
for generating revenues. The corporation has to maintain a brand image, generating high
revenues for the organization. Such factors always influence in progression of an organization
(Sigala, 2017). The weakness of an organization depends on how any kind of online promotion
or online advertisement is used for defaming the enterprise. If any kind of less diversities are
present in the market it shows that the services of the organization are compromised, and the
organization is not providing the satisfaction to the consumers. Similarly through the parameters
of opportunities and threats it shows that if any kind of imitation brings any kind of cyber crime
to any user. Facebook should think of such a strict platform, which will follow a proper filtration
in monitoring the ethical users. Any kind of unethical act brings defame to the enterprise. My
understanding from the SWOT analysis is that the organization should be under constant
improvement process to understand the threats, opportunities, strengths, as well as weakness of
the organization. With the close analysis of such factors I can understand the global market of
Facebook has been affected by all these environmental factors.

4. Assess the impact of fiscal and monetary policy on the activities of business organisations
UK government takes such economical policies, which can affect the internal activities of an
organization. Through such policies, it is easy to regulate a central way of supplying money to
the organizations following interest rates. The main difference between fiscal and monetary
policies is the former are the decisions taken by any national government whereas the later
always deals with the policies taken by the central bank. The main objective of both these
policies is to influence economy of an organization. I have analyzed the financial status of
Facebook inc and it is noticed that the objective of the organization is to enhance profitability by
providing satisfaction to the users (Reis, 2017). The digital technology has entirely changed the
global market of technology. Each organization goes through turmoil of recession and growth. In
the expansion of the organization, the customers play an important role in growth of the
organization.
Fiscal policies deal with the spending and taxation policies (Buiter, 2017). If the government put
lower tax, so it will be easy for both the consumers and the organization to develop. For the
consumers like me, it can be used as the platform for earning. Facebook takes such infrastructure
programs, which create job prospective for the consumers as well as the organization. The
corporation has allowed consumer like me to consume the product in such a way that it bring a
proper understanding of the growth. Through mortgage rates, it brings such strategies that
influence in building up constructive strategies.
Through each video posting, or using social media Facebook gets the revenues for the
consuming their products, with each passing day the consumers have played an important role in
generating revenues for the organization. The economic strategies have to be been taken
according to economic condition of the population. With the 2008 economic recession, the
global market gets affected economically. The recession had taken away job opportunities of
thousands of individuals. It is noticed US federation has taken new measures for mortgage bonds
and treasury bills, which results in quantitative tightening (Mumtaz and Theophilopoulou, 2017).
In the recent US election campaigning it is noticed that the government as propagation accesses

our identities. Therefore, this shows how the government takes the help of the social media in
election procedure.
Since 2010, the turnover of Facebook has showed a comparatively better use of technology for
sharing data among the consumers. The cash flows in such a way that it completely decides how
stakeholder are using the data analytics for understanding revenues used by the assets through
the activity of Facebook.
From this study, I have come to know how the external factors are influencing core functions of
an organisation. Previously I did not have much idea regarding the economic and financial
policies. Now I have gathered sufficient idea regarding them. While conducting the project, I
have also come to know about how the economical policies influence consumer confidence and
per capital income. In this way, it indirectly influences productivity and profit of the company.
5. Analyse how global and regional factors shape business activities
Both the international and regional factors are multidimensional and they have direct impacts on
the business growth as well as on formatting all the important business activities. Specifications
of those factors and their respective impacts on the selected organization, Facebook are described
below.
Impacts of international factors
Being one of the leading online business organizations, Facebook has to review and monitor all
its international business activities along with their respective effects on the business operations
as well as customers. Mainly the international factors are divided as political, social, economic,
technological, legal, and environmental. Facebook should maintain political and legal factors
when it trying to promote their new features in their social media platforms (Wamba et al.,
2017). Several rules of governments on promoting products or services vary across the countries.
In China, the rigid political issues play an important role in social scenario. Due to such rigidity,
Facebook is banned among the residents of China. In the first world countries, usually such rigid
social structures are not in play, that is the reason it has given the consumers to use it in a
strategic way. Economic market has an immense impact in global market, this is the reason
Facebook has taken such strategies which can bring innovations in the business strategy. The

environmentalists take issues in a positive manner, in a similar way Facebook has taken such
strategies to think about such environmental issues in a different manner. Like, the digital
platform the corporation has used to make the users notify about the specific days, or to celebrate
specific days. I think this issue of taking stand for conveying messages to the consumers
Facebook has also put forward this choice to the users whether to celebrate such special days or
not.
Impacts of regional factors
Regional factors such as cultural factors, social factors, responsibilities of regional government
matters for a business to be effectively develop in the regional ground. Gap between cultural
communication as well as different social values has an impact directly on the organizational
activities. The users have accepted Facebook in different way, and governmental policies play an
important role in using Facebook in different regions. The role of government policies for a
particular region should have flexible outlook, which celebrates equality at all levels.
Linguistically also the corporation has taken serious step, as it has respected the language
diversities of differently ethnic group. I think Facebook has always respected its users demands
in respect to the geographical or social scenario. The cultural identity has always been used as an
identifying mark for an individual using Facebook in a definite county. My analysis of such
factors closely shows that all these have been taken by the corporation for making it usable
across nations with different approaches.

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