Facebook's Global Corporate Strategy: Successes, Failures, and Tools

This report provides a comprehensive analysis of Facebook's global corporate strategy, exploring its journey from inception to its current status as a leading social media platform. The report delves into the successes and failures of Facebook, offering insights into the factors that contributed to its grow...Read More

Running Head: GLOBAL CORPORATE STRATEGY 1
Global Corporate Strategy
Of Facebook
(Student Details)

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Executive Summary
The report highlights the journey of Facebook, its success and failures. The company has the
largest users from all around the world; still its path was not very smooth. The success and
failure of Facebook can be applied by other social media platforms to sustain their growth in the
future. In this report the reasons behind the success and failure of Facebook is discussed in brief.
It also states the important strategic tools that Facebook should apply in order to run smoothly in
the future. The strategic tools that have been used in this report are VRIO Analysis and Porter’s
Five Force Model. The study mentions the importance and ways of implementing the Global
Corporate Strategy for every business in the present scenario.

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Contents
Introduction......................................................................................................................................4
Question 1........................................................................................................................................5
Success of the group........................................................................................................................5
Failure of the group.........................................................................................................................8
Question 2......................................................................................................................................10
Strategic tools................................................................................................................................10
VRIO Analysis...........................................................................................................................10
Porter’s Five Force Model.........................................................................................................12
Recommendations to sustain success in the future....................................................................15
Question 3......................................................................................................................................16
Strategic lessons that Facebook case study offers.........................................................................16
Question 4......................................................................................................................................19
Global Corporate Strategy in today’s business world...................................................................19
Conclusion.....................................................................................................................................21
References......................................................................................................................................22

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Introduction
Facebook is an American social networking and online social media company based in
Caligornia. The founders of Facebook are Mark Zuckerberg, Eduardo Saverin, Dustin
Moskovitz, Andrew McCollum and Chris Hughes (Treadaway & Smith, 2010). It is categorized
under the Big Four companies of technology along with Apple, Google, and Amazon. Initially
the website founders gave membership only to the students from Harvard, Columbia, Yale and
Stanford. But now Facebook is the fastest growing networking site worldwide. Every user can
make registration and create their account without any fee. Facebook helps the users to fill
information about them and share it with others (Vander, 2010).
Mission Statement
Facebook’s Mission Statement is “to give people the potential to bring and build the world closer
together” (Vander, 2010).
Vision Statement
Facebook’s Vision Statement is “People use Facebook to stay close with family and friends, to
discover the new things going on the world, and to express and share their concern” (Vander,
2010).
Objective
Facebook’s initial objective was to design an online place for students to share events,
announcements and personal news; but now it has become a platform for marketing and doing a
business (McKenzie, 2019).

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Policies
Facebook has developed a set of policies of Community Standards to describe the list of things
that are allowed and not allowed on Facebook (Facebook, 2019). The goal is to encourage
positive expression and to create a safe environment. It develops its standards from time to time
in order to remain stable and authentic.
Question 1
Success of the group
Initially, Facebook was just a platform, where students could share information and
communicate. Today, the entire scenario has been transformed to a broader concept as it can be
used for adverting and business as well (Wittkower, 2010).
 Facebook’s Advertising is highly effective
When Facebook was started, no one guessed that it would become what it is at present. It has
more than 2.2 billion monthly and 1.5 billion daily users. This trend is not going to change any
soon as users are becoming habituated to the waves of new information era. It is considered to be
a top advertising online platform. In US 51% of advertising is done through Facebook and this is
explained in the following figure.

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(AdEspresso, 2019)
It is clearly shown in the diagram that Facebook has increased its advertising revenue when
compared to its last decade. Companies started to advertise their products and services on
Facebook because, through Facebook their sales started to increase. It is a simple process that
delivers the results fast. Through Facebook the companies reached their ideal audience. It
provides thousands of ways to reach the target audience. Facebook Ads are highly customizable,
new features can be added every month. The recognized brands who use this platform for
advertisement are HSBC, Nestle, McDonalds and DELL.
 Billions of users
Another success story of Facebook is that it has billions of users. Other sites do not enjoy this
advantage. People are addicted to Facebook and usually tend to spend hours on it as compared to
other sites (Hoefflinger, 2017).

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Reasons for its success
When Facebook started, a dozens of other social media networks also had the same type of
opportunities. Facebook was successful in maintaining its position due to the following reasons:
 It’s easy
The application of Facebook is very easy as compared to other networking channels, such as,
Twitter. To make a post successful it is not necessary to learn the use of hash tags, symbols or
@. It is all about sharing the life time experiences and events. The registration is for free and
very easy. It can be accessed very smoothly with easy log in and log out.
 Frequent upgrades
Another reason behind the success of Facebook is that it upgrades its channel from time to time.
This feature brings excitement amongst the users. The privacy and security functions are very
strong, we have an option of selecting the group who can check our posts and who should not.
Apart from this, it has rolled out a new feature called as Facebook Messenger, in which people
can chat and make video calls freely.
 Engaging features
Facebook is an addiction for many of its users. It engages people time and makes them stay on
the page for long hours. There is and application center on Facebook that allows people to play
games and be entertained.

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 More focus on the product
Facebook’s success also depends on the fact that it puts more focus on the product and its
development, rather than keeping high focus on its shareholders (Yao, 2016). Facebook got its
early success because other networks where busy managing the shareholders’ interests. In the
public report, Mark Zuckerberg mentioned clearly that the intention of the company is to
accomplish its social mission and the business comes second.
 Powerful analytics
Facebook has a very powerful analytics process. It helps the users to know complete information
about the content that have been shared, to differ between the organic and paid sources, and to
identify the best performing ads and posts with ease.
Failure of the group
 Personal information leakage
Mark Zuckerberg admitted the biggest mistake that he made by allowing the Cambridge
Analytica to gather personal information about the users (Ivanova, 2018). This act caused a
major disappointment amongst the users, as they do not have the same trust on Facebook that
they had earlier. The privacy and security functions were so strong that their users had shared all
their confidential documents with the concerned party on Facebook.
 Login to other sites with Facebook
Facebook allowed the users to log in to other sites with its credentials in the year 2008. This tool
was named as OpenID, and it accepted by all the users across the web. This feature opened a
platform for Facebook’s dominance of the internet. It made its “like” button function on other

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websites too; as a result the widespread tracking of individuals browsing history became very
easy (Oyza, 2015). This was a major failure and it had to update its privacy settings.
 Revealing of phone numbers
In 2013, Facebook notified the contact information of 6 million users, including their emails and
phone numbers (Ivanova, 2018). This mistake caused a negative impact on its business. The
installation of bug not only caused problem to the Facebook users, but also to the non-users
whose information were uploaded by their family and friends.
Reasons for its failure
 Lack of innovation
Mark in an interview mentioned that whenever he tried to bring some innovative changes in the
application, it resulted as a failure. One of the examples explaining this failure is the invention of
new app called Secret (Heller, 2019).
 Security issues
The major reason for Facebook’s failure is that it is having security issues. Many people do not
trust this network and avoids using it for business purpose due to the constant cascade of privacy
scandals and security issues (Heller, 2019).
 Facebook ADS are not setting the right campaign objective
The highest revenue that Facebook makes comes from the Facebook Ads. These Ads gives an
opportunity to optimize the Ads to be based on certain objectives. The main marketing objectives

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are not clear in the Facebook Ads. They fail to follow the awareness, conversion and
consideration policy.
Question 2
Strategic tools
Every organization needs a relevant strategic tool to maintain its position in the market for a long
period. Facebook has made a tremendous growth in terms of success and profitability in the past
years, but due to dynamic changes and advanced technology, it has to apply certain strategies to
maintain its position. The following strategic tools are recommended that Facebook should
follow:
1. VRIO Analysis
2. Porter’s Five Force Model
 VRIO Analysis
This tool will help Facebook to analyze its business activities to identify those factors that
contribute the most to bring a competitive advantage in the business. The following diagram
shows how the VRIO Analysis of Facebook can be done by discussing the sources of social
media that brings overall advantages.

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Primary Activities includes:
Inbound Logistics
Facebook should make effective use of its resources to handle its inbound logistics. The
resources that is acquires are office supplies, hardware and different types of technologies. The
company should develop frameworks to analyze this process (Dudovskiy, 2017).
Operations
Facebook should apply strategies to its operations very properly. The company has its data
centers and offices in nearly about 3o different countries. The main thing to handle in this
process is to transform the raw material into a format which is more users friendly. It should
have more sophisticated range of hardware and software.

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Outbound Logistics
For Facebook outbound logistics is nothing but the packed content which is provided to its users
through its respective application and site. The company should introduce more innovation way
of handling this in order to reduce time and cost.
Marketing and Sales
All the social media are focused on consistently expanding their target customer segment;
Facebook should use similar strategy to implement a multi-segment positioning and targeting
process.
Service
Facebook do not have a strong assistance for its customer service delivery, it should develop a
strong an immediate strategy to help its users immediately when needed (Lupkin & Carter,
2015).
Under this tool, Facebook also needs to concentrate on technological development and
procurement.
 Porter’s Five Force Model
The five force model of Facebook will help Facebook to determine various issues that affects the
company and harms its position as a top player in the social media platform globally. With the
help of this strategic tool the company can evaluate external forces that influence it and
understand the industry environment. This five force model was applied to Facebook and the
following analysis came into notice:

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Competitive Rivalry or Competition – Moderate Force
Facebook is the leading social media platform; still it faces certain impact due to its competition.
The competitors have been affecting the company’s environment, and the following external
forces are moderate towards competition rivalry:
Firms Force
Small numbers firms Weak
Moderate firms Moderate
Low switching costs Strong
Bargaining Power Customers/Buyers – Strong Force
Facebook’s customers impose a pressure on it in regards to what they desire from the company.
The customer impact on the online advertising industry is examined by this model. The forces
stated below lead to the customers bargaining power to have strong forces on the network site of
the company.
 High substitute – strong force
 High demand from buyers – wear force
 Low switching costs- strong force (Bacik, 2015)
Bargaining Power of Suppliers – Weak Force
Suppliers are considered to be the major force that influences the social network and advertising
services of Facebook. This shows how the suppliers affect the company and its environment

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(Thompson, 2013). The bargaining power of supplier consists of weak forces and it can be
explained below:
 Moderate size of suppliers – Moderate force
 Large suppliers – Weak force
 Overall high suppliers – Weak force
Threat of Substitution – Strong Force
Substitutes have the potential to reduce the company’s performance and bring challenges in the
industries social media platform. The most important factors that create threat of substitution are
as follows:
 Low switching cost – Strong force
 High substitute – Strong force
 Moderate cost for substitution – Moderate force (Bacik, 2015)
Threat of New Entrants – Weak Force
When the new entrants enter the social media industry, Facebook has to face giant negative
issues. The factors that bring threats are discussed below:

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Recommendations to sustain success in the future
On the basis of VRIO Analysis, Facebook should focus more on introducing new technologies
that has not been used or identified before. Facebook is an online social media site and such
platforms can run successfully only with great regular updates shown in technology and
innovation. Therefore, to sustain in the future, Facebook has to be more effective with
technology and marketing strategies to plan a smooth and successful future.
Based on the model of five forces, it can be recommended that Facebook retains to stay in the
company’s position due to the suppliers and new entrants’ weaknesses. This barrier of weakness
impose minimum barrier to the social media industry. However, it becomes a problem when the
customers start influencing the business, as they have an option to move to another company that
offers the same types of services. This way the competitors are eating all the opportunities that
could be used by Facebook.
Thus, by studying the five force model it becomes an important task for Facebook to apply
strategies to curb such negative impacts. Facebook should apply management approaches to its
customers. This way the company can retain its clients as well as its market share.
It is further recommended that Facebook should implement strategies to make the display
advertising services more attractive. This will help in minimizing the negative impact of
substitution in the social media industry. There should be an improvement in the operations
management strategies as well in order to enhance the company’s business efficiency.

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Question 3
Strategic lessons that Facebook case study offers
Facebook was the first online social media site to enjoy the early success than any other
networking site. Though, the journey of Facebook is associated with many uncertain situations
and hurdles, it has still managed to maintain its position in the social media industry and gain
competitive advantage over other sites, such as – Twitter, Instagram and YouTube. Other social
media sites should take measures to improve their strategies by learning from Facebook’s
success and failures (Lofters, 2016). The areas requiring consideration is explained below:
 Technological Infrastructure
Technology is an ace in the social media industry. The lack of modern media technology will not
bring any success in this industry. The size of the users is increasing day by day, the more
number of users involve different needs and requirements. In order to meet the dynamic change
needs, technology advancement is must. Facebook has brought new features such as Cover
picture displays, timeline displays and the recent innovation is Facebook live video chats
(Benson & Vladlena, 2016). Other sites should learn how to be creative with the help of
technology.
 Cultural value
There is a relationship between the cultural values and Facebook. It is very easy to use that even
people with weak educational background can use and understand all its features. Facebook has
users from various backgrounds (Marshall, 2017).

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 Long term vision
One of the greatest lessons that other social sites can learn from Facebook is a lesson of long
term vision (Kirkpatrick, 2010). Facebook successfully conquered its biggest competitors like
Myspace, Orkut, and Google Plus. The company has a motto of capturing and retaining. To meet
its long term goals, the company tries to make the users loyal by providing them what they want.
 Network first and earn later
The first strategy that Facebook implemented was to build strong networks and to earn later
through these networks. When the users became addicted to the site, it started focusing on
earning and generating revenue. Initially, Facebook was developed for educational purpose; but
when it built a strong network for communication, Mark decided to make it work as a business.
 Brand Integration
Facebook being a king in the social media industry grabbed the opportunity to put its hands in
other brands too, it integrated its services with many other brands. It developed a feature through
which the users could log in to other websites by using their Facebook account (Lynch, 2018).
 User privacy must be at the highest priority
Due to the privacy issue and security scandal that took place in 2018, Facebook has redesigned
its privacy measures to gain back the trust of its users (Matthews, 2018). Even though the new
privacy setting is very confidential and secure, the users still does not trust the platform very
secured to transfer confidential documents and other secret information. Therefore, other sites
should taking this lesson as an example and build the privacy settings very strong so that they do
not face issues that Facebook is still facing.

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 Engagement feature
Facebook shows the engagement rate in terms of percentage of people. It defines who viewed the
posts and who shared, liked, reacted and made a comment. Through this feature, it helps the
users to communicate with each other knowing the psyche of fellow users. In case of Facebook
Ads, this feature helps the company to determine the rate of potential buyers. The users can
scroll and look for the required information to make a purchase, can view catalogs and drop their
opinions on a particular product or service. Businesses reap a wealth of repeated and potential
customer information. The marketing strategies can be designed on the basis of the information
gained through engagement rate.
 Advertising platform
Facebook has an extra ordinary number of users; a business can take advantage of this and start
advertising its products/services on this platform (Reeves & Haanaes, 2015). Facebook holds a
huge amount of user data which can be effectively used for marketing target. The advertising
platform on Facebook is very strong; it helped in the generation of huge amount of revenue to
both the parties, that is, Facebook and the concerned company using the Facebook platform.
 Mobile trends
Facebook’s rapid growth in 2013 is due to the launch of Facebook Messenger App, a mobile
application for chatting with friends and fellow users. In 2014 Facebook acquired its rival
WhatsApp to maintain its number of users. In September 2018, the messenger had almost 1.2
billion monthly users; this application was a huge success. On a daily basis, the users spend
almost four to five hours on their phones. There are more than thirty applications residing on
smartphones of the users, but the maximum time spent by user belongs to Facebook.

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Question 4
Global Corporate Strategy in today’s business world
Global Corporate Strategies are different from the domestic strategies. Global strategies aim at
fulfilling the requirements of the customers all around the global.
Strategies developed for globally owned business requires
 More sophistication and standard
 A capacity to meet the needs of various diversified people
From the given case study of Facebook it is understood that Global Corporate Strategy
involves the following theories:
 Mixed set of economies
The company has to operate in a mixed set of economies to implement a business strategy that
binds all the economies together. In this way the business goals will directly reflect the market
potential and growth rates in the economies and align the goal to the overall vision of the
company.
 Diverse talent pool
In the present world, when the business is performing its activities all around the globe it
becomes important to implement strategies for incorporating a diverse talent pool (Reuvid,
2019). This process will harness the potential and leverage the strengths that come from different
group of talented people, when they work together.

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 Integration of management styles
Different leaders and countries have different management styles; in a global corporate it is
essential to integrate such styles to maintain a balance between the people and business. The
styles should be combined or there should be a positive environment where the leaders can
perform better (Reuvid, 2019). As a result of this integration, the company will have high
performing individuals and groups.
 Process efficiencies
A global strategy will fail if the company does not understand that the country level requirements
are different from the international levels. The global standards should be maintained with
excellence, efficiency and at a high quality. To increase efficiencies, there should be
decentralization of power; where the country head or leader can make better decisions about the
management.
Importance of global corporate strategies for business:
 To expand the business
 To expand the target customer
 To decrease the economic downturns
 To reduce the cultural differences
 Global resource management
 To achieve competitive advantage (M & Verbeke, 2017)

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Conclusion
From this report it can be concluded that Facebook is the largest social media platform. The
journey of Facebook has not been an easy one. Its success story is a benchmark for other
companies in the same field. Its failure, such as shortages, risk, privacy problem and uncertain
social information broke the trust of its users. Despite of its unstable journey, people are
addicted to Facebook and spend many hours on it. It has no borders for age groups and
qualification that are restricted to its use. It is a platform that connects its users to share
information and knowledge. The reason for its success is that its competitors provides limited
features and are unsuccessful in tapping the social market.
Facebook is a successful tool because of its strong advertising campaigns and objectives. The
company started with an aim of constructing a large network, but since the number of users
started growing unexpectedly, Mark focused on generating revenue with the help of this
network. Easy business and easy advertisement policies on Facebook are the present trend on
social media.
In today’s business world, no company can sustain without implementing an effective global
strategy. Facebook has attracted users from all over the world by bridging the gap of cultural
differences and providing international standards. It is getting more popular day by day and has
brought improvement in the social media environment.

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