Strategic Management Analysis of Twitter's Competitive Environment

This report provides a comprehensive strategic management analysis of Twitter, examining its strategy formulation, including both deliberate and emergent approaches. It explores the importance of strategic management in the microblogging industry and critically analyzes Twitter's competitive environment using PESTLE, Porter's Five Forces, and VRIO analyses. The report also delves into Twitter's strategic choices, competitive advantages, and limitations, including the impact of its unique approach and revenue models. It highlights the significance of strategic management for the microblogging industry and provides insights into Twitter's competitive positioning and future prospects. The report concludes by summarizing the key findings and implications for Twitter's strategic direction, emphasizing the importance of adapting to the changing market dynamics.

Strategic Management

Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Justification as what makes Twitter strategy formulation approach deliberate and emergent
along with limitations..................................................................................................................3
Importance of development of strategic management for micro blogging industry...................5
Critically analyse the competitive environment facing Twitter in the social networking
industry........................................................................................................................................5
Pestle analysis..............................................................................................................................5
Competitive environment analysis (porter five forces analysis )................................................7
VRIO analysis..............................................................................................................................8
Porter's generic...........................................................................................................................10
SAF model.................................................................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Strategic management refers a process of setting objectives, identifying competitive
environment and evaluating own business strategies in order to meet goals (Pozdnyakova and
et.al., 2017). This present study is based on Twitter which is an American micro blogging and
social networking service which allows people to interact with messages by posting tweets. It is
important for people to have registration for posting, retweeting and like post of others. This
present study is going to show important of strategy formulation and effective way of
formulating which can make them able to make their strategies deliberate and emergent as well.
It shows ways of Twitter as how it formulated its strategies which has made able to grow its
business, allowing employees working together in an effective manner, having abilities in
employees of discussing all actions in the interest of matching company goals which are some
features of deliberate approach. It will show importance of analysing competitive environment
by addressing common problems by which it can operate in that market and become the market
leader. VRIO analysis model also plays an important role as it also allows company to identify
its resources which have effectiveness and ability to imitate by others. TOWS analysis, BCG
matrix are some other effective strategy by which company analyse its internal environmental
factors.
MAIN BODY
Justification as what makes Twitter strategy formulation approach deliberate and emergent along
with limitations
In the context of deliberate and emergent strategies it can be said that both strategies
together helps companies in identifying the main purpose or intention of action in an
organization. On the basis of daily operations, companies fall under these both strategies as clear
difference between both strategies is not identified yet. But overall it can be said that these both
terms and strategies have focus on content of strategies such as policies, initiatives, choices and
decision-making. In addition, in regard to deliberate strategy it can be said that it marks a
concrete attention to detailed concerning business operations and identify the exact intention of
the business (Aswani and et.al., 2018.). It also attempts to reduce outside influences on business
operations. Emergent theory or approach makes company and employees flexible by which they
can adapt changing situations and changing ways of working accordingly without getting
affected
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In the context of Twitter strategy formulation it can be said that its ways of formulation
of strategy makes it both deliberate and emergent. Because it focuses on conveying its brand
message to all employees, reflecting its core values and using effective communication mode. IT
has made tremendous changes between 2006-2018. In these years it has shown ways of strategy
formulation which shows that these are both deliberate and emergent or also employees have
willingness to wok together and support twitter in accomplishing their goals. Here are some
example and ways of strategy formulation of Twitter such as:
Unique approach: From 2006 to 2011 it made growth as from 20,000 tweets per day it has
increased to 40,000 in only one year. One of the main feature of this company is its unique
approach of allowing people to interact by tweeting short messages having only 140 characters.
Till the year of 2010 it has made around 65 millions tweets. Other features was allowing links
from twitter to videos on YouTube. But still it losses money and it is the main concern as why it
is at this stage after increasing tweets (Xun and Guo, 2017).
Launching public sharing: It is other main feature of strategic management by which all its
partners launched public share offering and by doing, so they made significant gain in wealth. As
a chief executive officer, Dick Costolo joined the company and allow it to grow business.
Pay for performance: It is other effective strategy of Twitter which allowed it to increase
revenue. By providing video links on this platform with third party commercial websites allowed
it to gain around 65% of total revenue from USA and remaining 35% from other countries.
Its revenue model is based on advertising as around 85% of its revenue comes from
advertising sales which makes it deliberate and emergent. Rather, this data licensing is other
main source of revenue which makes strategic management successful.
Limitations
 In the context of deliberate approach to strategic formulation it is identified that it is
being fixated on a specific outcome which can increase company' rigidity or inflexible.
 It also lowers their ability to respond changes in operating environment.
 Emergent approach in strategic formulation is seemed impractical and it is the reason that
after increasing tweets per year Twitter losses money.
 It can also be said that strategic management based on this emergent approach can make
directionless to company as companies find difficulties in justifying their actions to
stakeholders.
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 So, overall it can be said that these approaches are not predictable so making planning on
this basis is a difficult task for companies as only with experience and ability they can
make themselves successful.
Importance of development of strategic management for micro blogging industry
Micro blogging is the industry who allow people to connect with each other. With advanced
technology this industry is on rise and it is becoming important for them to develop strategic
management. There are several reasons and benefits which companies of this industry like
Twitter and others can gain such as:
Give direction: An effective strategic management allow companies to move in a right and
specific direction which can help them out in accomplishing their goals. It defines their goals and
on that basis it also guides employees working accordingly and cooperating company to meet
goals.
Improving decision-making: By developing strategic management or following all functions
like identifying competitive environment, analysing both internal and external environmental
factors make companies able to take better decision (Baumgartner and Rauter, 2017). This
improved decision also allow them to attract investors and stakeholders and retaining them.
Competitive advantages: Identifying current market trends, intensity of competition is the main
function of strategic manage me and by doing so Twitter can take competitive advantages by
analysing all factors and changing own business strategies accordingly.
Critically analyse the competitive environment facing Twitter in the social networking industry
Twitter have been the significant popular social networking sites which is dealing among the ten
most visited website all over the world. The company have the only 35 offices scattered across
the globes have the multilingual level of facility made it popular a usable for the non-speaking
English’s population all around the world (Aswani. and et.al., 2018). The mission of the
companies has to the largest daily level of audiences in the world having connections to the
world via twitter information’s sharing and distribution platforms along with being the one of the
top revenues generating internet companies in the world. On the other hand, the company have
the vision in believing the free level of expression and thought every voice have the power
impacts in the world in the significant order.
Pestle analysis
Political factor
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As the twitter is operating in the internet information providers have the exposing to the
different types of the political environments and political system risks across the various
countries. The company have the implementation of the different strategy to diversify the
systematise risk of the policies environments.
Economic factor
As the industry of the social networking is having the development as the faster paces of the
ecommerce’s and growing level of competitions along with the different factor of there country
such as growth rate, inflation & industry’s economic indicators. The efficiency market of the
country has the impact in revenue generating aspects along comparative advantages f the host
country and technology sector of the country.
Social factor
Twitter have the need to establish the greater level of understandability over the costumer in the
markets along with designing the effectives marketing messages in the international information
systems (Baumgartner and Rauter, 2017). This can be such as the identifying the Entrepreneurial
spirit and broader nature of the society. The internet is driving the significant shift in the
communication channels.
Technological factor
Technological disruptions have the time to copes the more level of profitability as the recent
level if the technological development of the have the impacts on the product offerings and the
cost of the infrastructures over the internet’s information providers and rate of the technological
diffusion.
SWOT
Strength Weakness
Happening services as per the real time
information’s
Powerful and popular branding tools along the
brand images globally.
The strong technology platform and analytical
capabilities
Strong level of set of service offering for the
developers and data partners.
There is partly dependent on the application in
the markets place along the dependency in the
internet search engines to driving the traffic.
The more level of data driven and privacy
concerns.
To have the complex models as compared to
pers.
To have the lack of innovations which is
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leading to low retention.
Opportunities Threat
No level of real competition in the term of
micro blogging
Extension of the social media platforms to the
ecommerce’s
Social media have the capability of the driving
the real business result.
To have the growth in direct and indirect level
of competition.
Regulations, province and the protection of the
data of the user.
The existence of the spam and fake menace
To have the high level of risk in the cyber-
attacks and the breach on the confidential user
data.
Competitive environment analysis (porter five forces analysis )
The macro factors have the major level of impacts in the porter five forces analyse for the
shaping strategy and the competitive level of landscape. This will ae the impacts of the
individual’s level of the firm competitive advantage of the overall level of profitability level of
the social networking technology.
Threat of New Entrants
The difference in the economic of the scale make the twitter difficult to operates by producing
the large level of capacities, there is strong level of product differentiations and have the strong
emphasis on advertising and customer services as well (Omsa, Abdullah,and Jamali,, 2017.). As
there is high level of capital requirements which is making it difficult for new entrants to set up
businesses as high expenditures need to be incurred.
Bargaining Power of Suppliers
There are the lot of supplier which make the less level of control over the prices as the weak
forces. It is easier for the twitter to have the significant switch suppliers. The supplier don’t have
the proving the credible level of threat to the forward integrations in the social networking
industry of the twitter.
Bargaining Power of Buyers
This industry has the lot number of the firms which tends to have no control over the prices turn
out to be weaker sections in the industry. The product differentiation is higher and the income of
the buyer of this industry is lowers as the buyers are more price sensitive.
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Threat of Substitute Products or Services
There are few levels of substitutes which are advisable in the markets as among the low earning
industries which have the no ceiling in the maximum profits for the twitter to operates. The
twitter has the strategy of operating with significant adequate quality to substitute goods.
Rivalry Among Existing Firms
The number of the competitor is low is larger market shares by gaining the competitive positions
in markets and ecopoem the leaders as the stronger forces. There is need to have the capturing
the markets shares in order to have the pushing up to full capacity.
VRIO analysis
This have been the strategic level of frameworks or the tools which will helps the organizations
in level of identification of the sources and the capabilities by proving the sustained level of
competitive advantages. The companies tend to have the posseting the various kind of the
resources and capabilities in the significant manner. the resources can be such as the compared
to be such resources could be financial, human, organisational, physical, or technological in
nature.
The analyse have the supplemented their analytical techniques by helping out the evaluating the
resources in the great level of detailing as the financial indicators by reflecting the financial
performance if the business (Pozdnyakova and et.al., 2017). This is reflecting the performances,
efficiency, quality and other department in the various functions by looking out in the term of the
simplicity and applicability in her classily in the significant manner.
The implication of the VRIO analysis of their Twitter have the application on yd company wide
and the individual’s department for their well-rounded view to have the looking at the business
aspects on the business potations and marketplace. In order to have the committing the VRIO
analysis have there the development of the significant times in order to give the sustained
competitive advantage.
Valuable
Twitter have been identified as the powerful level of business channels which have the
following of the several events and the metric which actually have the matter in order to make
the optimizations. The account have the following of the vanity numbers like have the more
level of follower counter , retweeting and mentalising the average level of social media gurus .
On the other hand the marketing and the business professionals have the bigger level of concern
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over the valuable areas considered the twitter as one pf the most directs inroads in addition of the
blogger communities as well as greeting it right to the perspectives. This is making it
distinctives ore level of valuable commander by having the component of the marketing
effortless and the amplifying the other campaigning programmes with viral lift, blog coverage,
and blogger advocacy.
Rare
The company have the good level of brand images which are known for credible celebrity
accounts which running out to be making int as there one of the favourite socials media
accounts from all the times. The company have the usage of their bests technology which make
it more vulnerable rial dates and being used as the foundation of the platform, the company have
the strength pf there more than 300 million of the active users which is trueing out be masking
the biggest level of data hypocrisy (Xun and Guo, 2017). This have the power of the people to
have the directly taking to the movement of the favourite celebrities, organizations, and places –
how amazing is that. This is the feature and strength which makes Twitter unique.
Imitable
As the consider to the imitability of the twitter have the major level of significance regarding
there the basis of the tangible and intangible resources of their twitter which have the signified
the charterer of the imitability of the company in the respective manner. Return-on-Tangible-
Asset is calculated as Net Income divided by its average total tangible assets. Total tangible
assets equal to Total Assets minus Intangible Assets. Twitter's annualized Net Income for the
quarter that ended in Mar. 2020 was $-34 Mil. On the other hand, the firm the level of
intangibility have the assets can be defined as the identifiable level of mon monetary assess
which cannot be seen, touched or physically measured. This can be valued as the inclusions of
the more level of trade secrets m copyright which is creasing the major level of marketing
impacts on there markets in perfect manner.
Organization
Twitter focuses on conveying its brand message to all employees, reflecting its core values and
using effective communication mode. IT has made tremendous changes. It has shown ways of
strategy formulation which shows that these are both deliberate and emergent or also employees
have willingness to work together and support twitter in accomplishing their goals. Twitter
which allowed it to increase revenue. By providing video links on this platform with third party
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commercial websites allowed it to gain around 65% of total revenue from USA and remaining
35% from other countries. An effective strategic management allow companies to move in a
right and specific direction which can help them out in accomplishing their goals. It defines their
goals and on that basis it also guides employees working accordingly and cooperating company
to meet goals. Twitter also makes use of market as well as product development strategy in
which it focuses on expanding business in new market and also providing new features in
services.
Porter's generic
It is one of the main strategies which is being used by Twitter which allow it to become the
market leader and to meet goals.
Cost leadership: As per this strategy company lowers its cost as compare to its
competitors in order to attract customers. This strategy is being used by Twitter in various
consumer markets. In addition to that the company have the usage of the cost leadership
generics completive strategy’s which have the involvement in the minimaxing the cost in ay of
the perfuming the business (Ansoff,2018.). The more level of cost minimizations has the
enabling the company to make the significant level of reduction in prices completeness. The
company have been broadly providing the online level of socials media as services in the global
market in the perfect manner. this is hybrid business which is inculcating in the factbook
business as the twitter have the usage of the computing technologies to maximize the efficiency
of its social networking website
Differentiation leadership: It is other effective strategy which allow Twitter in building
competitive advantage. As per this strategy it tries to make its services unique than others and it
is well-known that ways of interacting on twitter is different from other micro blogging
companies.
Cost focus: It is quite different from cost leadership as in this strategy company seeks to
lower cost advantage by only focusing on one or few numbers of market segment (Omsa,
Abdullah and Jamali, 2017).
Differentiate focus: It is other strategy which allow companies to concentrate or focus
on narrowly target segment by expanding developed resources. When Twitter adapt this strategy
than it mainly focuses on specific target market or market segment which helps it out to increase
number of customers.
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The company have these related level of the strategic level of financial objectiveness in the
order to have the increasing the revenue of the company’s by potentiality of statistician the
customers in order to have the standing out to gains more than 2 billion monthly active users.
Cost leadership is strongly linked to the company’s intensive growth strategies (Wheelen and
et.al.,2017).
Rather, these Twitter also makes use of market as well as product development strategy in which
it focuses on expanding business in new market and also providing new features in services.
So, from the above discussed it can be said that Twitter mainly focuses on differentiate
lead' and cost leadership and it allows it to expand its business and attracting customers as well.
Strength Weakness
Opportunities The firm should have the development to
the wards more level of preseasons
networking sites which will helps in
gaining more level of competitive as
camper to the other sites.
There should be more investments of
there data analysing to have the between
level of understanding toward the
customer terms.
To have the development of the feature
which will boost the instar of the users
and more business oriented approach.
The company should have the
proper level of attention over
developing there clear vision n
mission of the company along with
investment more advertising to
social medias users and existing
business as the emerging martlet.
The company should also have the
emergence another sectors.
Threat To have the development as more
particularistic professionals networking
sites by having the significant level of
there understanding in the term of there
between level of understanding toward the
customer terms.
To have the management of the
significant or level of organizations
structures along with releveling
there significant level of legal
matters and long with developing
the environments concerns.
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SAF model
Suitability
As per the consideration of the suitability aspect, it have been the twitter is the form of the
microblogging’s which have the allowing the users and sends in order to have the receiving the
short public massages as tweet. The company have the terms and strategies have focus on
content of strategies such as policies, initiatives, choices and decision-making. It also making the
clear attempts to reduce outside influences on business operations by making it employees
flexible. So that’s they can adapt changing situations and changing ways of working accordingly
without getting affected (Schilling and Shankar, 2019). It is majorly focussing on conveying its
brand message to all employees, reflecting its core values and using effective communication
mode. Micro blogging is the industry who allow people to connect with each other. With
advanced technology this industry is on rise and it is becoming important for them to develop
strategic management
Acceptability
Identifying current market trends, intensity of competition is the main function of strategic
manage me and by doing so Twitter can take competitive advantages by analysing all factors and
changing own business strategies accordingly. On the other hand, the employees have
willingness to work together and support twitter in accomplishing their goals. It is other main
feature which all its partners launched public share offering and by doing, so they made
significant gain in wealth. There is more level of development to the acceptability of the appacsh
as to have the development of the feature which will boost the instar of the users and more
business oriented approach.
Feasibility
It defines their goals and, on that basis, it also guides employees working accordingly and
cooperating company to meet goals. Total tangible assets equal to Total Assets minus Intangible
Assets. Twitter's annualized Net Income for the quarter that ended in Mar. 2020 was $-34 Mil.
This can be valued as the inclusions of the more level of trade secrets m copyright which is
creasing the major level of marketing impacts on their markets in perfect manner (Deephouse,
and et.al.,2019). The company have the usage of the cost leadership generics completive
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