Comprehensive Analysis: Facebook's External & Internal Factors

This report provides a detailed analysis of Facebook's internal and external environments, focusing on its global position and diversification strategies. The external analysis covers political, economic, social, technological, environmental, and legal (PESTEL) factors affecting Facebook's operations in the US, highlighting the importance of legal factors, particularly data privacy, as a major concern. The report also assesses Facebook's strong global presence, driven by its acquisitions of Instagram and WhatsApp, and its market dominance compared to competitors like Twitter and Pinterest. Furthermore, it discusses Facebook's diversification efforts, including its ventures into virtual reality with the acquisition of Oculus and its messaging services. The conclusion emphasizes the significance of addressing legal challenges and leveraging its market position for future expansion and sustainable growth. Desklib provides access to similar solved assignments for students.

Running head: EXTERNAL AND INTERNAL COMPANY ANALYSIS
EXTERNAL AND INTERNAL COMPANY ANALYSIS
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1EXTERNAL AND INTERNAL COMPANY ANALYSIS
Introduction
The study is focused towards analyzing the internal and external environments of
Facebook. The global position and the diversification of interest of the company is analyzed and
evaluated subsequently. Facebook is a social-networking website and company that has become
a global name with an overwhelming global presence.The revenue of the company presently is
55.8 USD. The company has total assets worth 97.3 billion USD (Topic: Facebook, 2019). The
company is focused towards expanding to various diverse markets. Facebook is based in the
United States, headquartered at Menlo Park in California. The external and internal analysis of
the organization is done to further analyze its position in the global corporate environment. The
US operations of the company has been considered for the external analysis.
External Analysis
Political
The political environment of the US is effective for running businesses. In this regards
Facebook does not face any significant challenges from the political environment. The USA has
always focused on enhancing the business environment of the country. In this case the company
can take part in various activities without getting affected by the political climate.The
government has a strong framework that supports the IT businesses of the country.
Economic
United States has a growing and well-structured economy. One fourths of the global IT
market which is worth 3.8 trillion USD is based in the US. Hence, this becomes a significant
factor in determining the infrastructural effectiveness of the industry in the country. Facebook

2EXTERNAL AND INTERNAL COMPANY ANALYSIS
can utilize this good economic growth potential towards its benefit. Economically the IT market
is booming and is expected to grow further.
Social
Like all the major countries if the world social media is also a very important aspect of
the daily lives of the people in the United States. The people are increasingly inclined towards
using social-media for various purposes. The social media penetration rate in the USA is 79%
(Social Media Stats Worldwide, 2019). The population of social media users is growing at a fast
rate and Facebook is the predominant choice of social media users.
Technological
United States is one of the leading countries in the world in terms of technology. The
largest technology companies in the world are based in the USA. Hence, there is ample scope for
the development of newer technologies by the organization. The various IT companies can be
utilized for getting access to the latest technology that is required to foster the growth of the
company.
Environmental
Environmental concern is growing in the technology industry. However, the IT industry
has lesser environmental concern. The biggest concern in the industry is the fact that several Wifi
devices are reported to cause environmental issues (Oyedemi, 2019). However, these factors
does not limit the operational factors of Facebook. The company has good environmental
reputation.
Legal

3EXTERNAL AND INTERNAL COMPANY ANALYSIS
Legal factors have been some of the biggest concern for Facebook over the years. The
company has been accused of privacy breach of the customers. The company is affected greatly
by the IT oriented laws of the country. Data breach and privacy issues are the biggest concerns
that affect Facebook in terms of the legal factors. It is important that the legal matters are given
much importance by the company.
Global position
The global position of Facebook is very significant. It is one of the largest brands in the
world. Moreover, it is the most used social-networking site in the world.The combined revenue
of the company presently is 55.8 billion USD. The company has total assets worth 97.3 billion
USD. The net income of the organization is around 22.1 billion US dollars (Topic: Facebook,
2019). The organization has further consolidated its global position with the acquisition of
similar social networking sites, Instagram, top messaging service Whatsapp and other similar
sites or applications. The acquisitions of Facebook has helped the company to become one of the
top performing IT companies in the world. The company is currently among the 10 largest global
brands. Facebook had a 9% increase with regards to its growth. There is no doubt that Facebook
is in a very good global position. However, in some of the markets the company has witnessed a
shrinkage and in others it was witnessed a slower than average growth (Oyedemi, 2019). In
regards to competition, Facebook is much ahead of Twitter, Snapchat or Linkedin. Facebook has
a market share of 68% with regards to the global Social media market. Behind it are Pinterest
with 16.26% and Twitter with 6.72% market share (Who Are Facebook's Main Competitors,
2019).

4EXTERNAL AND INTERNAL COMPANY ANALYSIS
Diversification of Interest
Diversification not very effectively done till now for facebook. This is because the
company is still concentrated in the social media oriented areas. It has acquired the messaging
application Whatsapp. However, facebook should look forward towards diversifying to the other
markets. However, in the IT sector the company is diversifying with regards to the subsidiaries
that it is acquiring. The company had started the internet.org for building affordable internet
access in the world. Facebook however, has not diversified beyond the area of social network.
However, the company is focusing towards collaborating with other big names in the IT industry
to provide other types of services. The most important diversification at this time is the Facebook
messenger service (Weedon, Nuland & Stamos, 2017). This service can be linked with the
facebook profile and help people to send messages to their Facebook friends. The company has
acquired Whatsapp which is another message sending application. The buying of Oculus was an
important part of the diversification process. Oculus is an IT company specializing in virtual
reality. With this Facebook can easily diversify into the other markets and also enter the gaming
and the simulation industry. The diversification process of the company has been effective and
can provide sustainable growth.
Conclusion
The implications point to the fact that the legal factors are the most crucial factors that
can affect Facebook. It is in the recent years that these factors have increasingly affected
facebook. The global position was found to be effective as it has established itself as a large
global brand. The diversification process has been slow but with the revenue backing and market
experience gained the company can achieve significant expansion in the coming years. Facebook
has been one of the most successful global companies.

5EXTERNAL AND INTERNAL COMPANY ANALYSIS
References
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Oyedemi, T. D. (2019). Global Digital Capitalism: Mark Zuckerberg in Lagos and the Political
Economy of Facebook in Africa. International Journal of Communication, 13.
Social Media Stats Worldwide | StatCounter Global Stats. (2019). Retrieved from
http://gs.statcounter.com/social-media-stats
Topic: Facebook. (2019). Retrieved from https://www.statista.com/topics/751/facebook/
Weedon, J., Nuland, W., & Stamos, A. (2017). Information operations and Facebook. Retrieved
from Facebook: https://fbnewsroomus. files. wordpress. com/2017/04/facebook-and-
information-operations-v1. pdf.
Who Are Facebook's Main Competitors?. (2019). Retrieved from
https://www.investopedia.com/ask/answers/120314/who-are-facebooks-fb-main-
competitors.asp