Strategic Management Report: Twitter's Growth and Challenges

This report provides a comprehensive strategic management analysis of Twitter, examining its approach to strategy formulation, including both deliberate and emergent strategies. It delves into the importance of strategic management within the microblogging and social networking industry, highlighting its role in identifying opportunities and anticipating threats. The report assesses the competitive environment Twitter faces, utilizing Porter's Five Forces to analyze the threats of substitutes, new entrants, buyer power, supplier power, and industry rivalry. It also evaluates Twitter's strategic capabilities based on the VRIN framework, identifying valuable, rare, inimitable, and organized resources. The analysis includes an examination of Twitter's current strategies and explores practical alternatives for future strategies, culminating in a recommendation for the path Twitter should pursue to maintain and enhance its position in the market.

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................3
1.......................................................................................................................................................3
a) Analysis and Justification of Deliberate and Emergent approach of Twitter Strategy
Formulation..................................................................................................................................3
b) Importance of Developing Strategic management for microblogging and social networking
industry........................................................................................................................................4
2.......................................................................................................................................................5
a) Competitive Environment facing Twitter in Social Networking.............................................5
b) Strategic Capability of Twitter................................................................................................7
3.......................................................................................................................................................9
a) Twitter’s current strategies and range of practical alternatives for future...............................9
b) Selection and Justification of strategy that Twitter should pursue in future.........................11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Strategic management can be defined as a process of setting objectives, analysing
environment and devising strategies that are capable to attaining the objectives of the
organisation. Organisation of all types and nature can adapt to strategic management practices,
one such organisation being discussed here is Twitter. Twitter is American microblogging and
social networking service. The company was founded in 2006 and is headquartered at California,
United States. There are around 321 million active users on Twitter and its services are available
worldwide. This report will be based on case study of Twitter that features growth of Twitter and
later slow down in its growth. This report will discuss about approach of Twitter for strategy
formulation, importance of strategy management for social networking industry. This will be
followed by environment analysis of Twitter. Later current strategies of Twitter and future
strategies will be discussed.
1.
a) Analysis and Justification of Deliberate and Emergent approach of Twitter Strategy
Formulation
Deliberate Strategy is a strategy which collective vision and goals of the organisation are
articulated as broadly as possible and as much detail as possible and these are communicated to
those who will act upon these objectives achievement. In this strategies are determined for a
fixed time along with planning and execution of the strategies.
Strategies can be defined as emergent when consistencies in action and behaviour of
organisation over a period of time, even when it is not clearly intended to adopt these behaviours
(Power and Gruner, 2017). In this strategy testing and learning is a continuous process and
behaviours of the organisation and strategies gets affected by testing and learning and their
result.
Major difference in both these approaches is their preparation and their relatedness with the
objectives. This means that deliberate strategies are linked with organisational goals and
objectives and are pre-planned. Emergent strategies on the other hand are not planed earlier and

mainly depend on the experience of the organisation and learning of the organisation. emergence
strategies are also the one which are decided on the basis of external influences of the
environment on the organisation.
Limitation of Deliberate strategies approach is that this does not consider environmental
contingencies and events which might occur unplanned.
Emergent strategic approach has limitation that strategies when are developed and implemented
in short time might create unrest in organisation and other regular practices of the organisation.
Acquiring and developing resources also become difficult in emergent approach of the strategy
formulation. Another limitation of this approach is that it might create disturbances and affect
deliberate strategies that organisation has developed.
Strategies of Twitter are both deliberate and emergent because these are not different
from each other but are adopted and implemented in coordination. Twitter develops its plans in
yearly basis which are based on its objectives for the year. This makes strategies of Twitter
deliberate that they are pre-planned and are developed in complete detail and articulated with as
much detail and communicated to its actors (Soliman, Anchor and Taylor 2019). This also
includes emergent strategies because emergent strategies are based on testing and learning. There
are several strategies and changes that Twitter have made on the basis of testing and learning.
Changing features of the Twitter are one of the best example of emergent strategies in which
they change and modify application on the basis of testing and learning.
b) Importance of Developing Strategic management for microblogging and social networking
industry
Strategic management is very important for all the business organisations and industries.
This is important for microblogging and social networking industry because
Strategic management provides clear objectives and direction to employers
Objectives are important because they clarify what employer as well as employees is
required to achieve through their actions. Without objectives all the actions and efforts of
employees an employer will become time and resources. Objectives also become basis for
control and evaluation of all the functions that was performed in organisation.

Helps in identifying opportunities
Popularity of microblogging and social networking site present several opportunities for
the industry (Durmaz and DÜŞÜN, 2016). Strategic management can help in identifying those
opportunities and this can also develop set of actions to utilise the opportunity of the industry.
Anticipating threat
As strategic management help in identifying opportunities with also enables organisation
and microblogging and social networking industry to anticipate threads. This enables
organisation to take measures in order to avoid or reduce impact of these threats.
2.
a) Competitive Environment facing Twitter in Social Networking
Increasing popularity of social networking sites and increasing number of social networking site
which increases business organisation in social networking industry have generated a strong
competition in social networking industry. This competitive environment of social need to tea
industry which is faced by Twitter can be analysed help of porter’s five forces. These are-
Threat of Substitute
This is one of the important threat which is being faced by Twitter because there are
several substitute for the Twitter. Organisations and social sites being operated in the industry
are increasing day by day and increase the competition for Twitter. The threat of substitute
includes that other social sites will be used substitute by the social site users (Stazhkova,
Kotcofana and Protasov, 2017). Users when start using other sites this also encourage advertisers
to use different sites for advertising. This means that power of Twitter in this force of
competition is weak. This is because this power get affected by number of service providers and
in this context there are a number of service providers which can be used by customers for social
networking.
Threat of new entrants

As the force of substitute is strong this is also strong force that new entrants they can
enter the industry. Entry of new social networking site and microblogging site will affect Twitter
negatively because it will increase competitors for the Twitter. Power of Twitter in this is also
week because it is not very difficult to enter in the industry where Twitter is operating because of
limited requirement of resources and investment.
Power of Buyers
Power of buyer refers to social networking users in context of Twitter. Power of gets affected by
a number of sellers, number of buyers and cost of switching (Liu, Zhu and Zhang, 2018). In this
context number of sellers in social networking sites are already high and they are increasing
regularly this is a negative factor for Twitter. Number of buyers is also high and this is a positive
factor for Twitter. Regarding cost of switching there is no cost of speaking for social media users
do people using advertising services of Twitter might get affected by cost of switching. These
factors in analysis suggest that power of Twitter in this force of competition is at moderate level.
Power of Suppliers
Twitter is operating in social networking industry and physical resources required for Twitter are
easily available hands power of suppliers is weak and makes power of Twitter strong in this
force of competition. Generally resources required for the Twitter physical and office supplies
and technological instruments that can be easily e acquired.
Industry rivalry
Industry rivalry of Twitter is at moderate level. This is because industry rivalry gets affected by
number of organisations operating in an industry (Sun, Wang and Tong, 2018). There are several
forms operating in social networking industry which speaks strong industry rivalry. Among all
these firms Twitter has acquired a strong position and is able to to give strong competitors to
other forms. This make that Power of Twitter in this force of competition is at moderate level.
Competitive analysis of Twitter in social networking industry suggest that there are
several challenges that Twitter is facing and this challenges are inform of threat of new entrants
and threat of substitute. This thread can be dealt by Twitter by creating a strong position so that it
does not negatively affect Twitter and its growth. But as there are threads competitive force of

water also present some of the percentage and this supports it is are in form of power of suppliers
as power of suppliers is is we can power of Twitter is strong in this force Twitter Ken easily
acquire required resources and use them for research and development and for effective
operations of the organisation. Another opportunity for Twitter lies in industry rivalry as position
of Twitter is strong in the industry it can use it to strengthen the position so that it can its position
can become more strong in power of buyers (Zhao, 2017). Position of Twitter in power of buyers
at water level can be e turned into strong buy creating attractive features that encourage users to
to use Twitter for their social networking.
b) Strategic Capability of Twitter
Strategic capability can be defined as capability of organisation that enables it to get
competitive advantage in the industry and also play significant role in success and growth of
organisation. Strategic capabilities are based on four elements of resources that are valuable rare
inimitable and organised. In this elements resources having all the four elements allows company
to get long term competitive advantage and those resources that have two or three elements give
the model competitive advantage to the organisation. Twitter also several resources and they can
be e analysed on the basis of this model.
Valuable
This means that resources and capability of Twitter have specific value for the organisation
(Ariyani and Daryanto, 2018). This also means that resources and capabilities have their
economic value and they are expensive to obtain which make then valuable full stop.
Rare
Resources and capabilities when are there become strategic capability. Rareness of resources can
be defined as that resources not available easily. Their ability and their availability is limited and
competitors of the organisation cannot acquire those resources. It is important that resources are
rare otherwise they can easily be acquired by competitors and they will no longer remain specific
capability of a particular organisation.
Inimitable

This means that resources cannot be imitated. Imitation refers to developing similar resources
and resources that are inimitable cannot be developed by competitors in case competitors want to
imitate those resources they are very expensive to be imitated (Seo, Park and Choi, 2016). In
case resources are not available but they can easily be imitated by others in such case their
strategic capability will get reduced.
Organisation
This means that resources are respectively organised in a systematic manner that they allow how
to get most benefit from them. This also includes that resources are supported by their existing
arrangement so that we can be used by organisation.
Resources that are available to Twitter can be analysed as follows-
Resources Valuable Rare Inimitable Organised
Financial Resources Yes No No Yes
Human Resources Yes No No Yes
Technological Yes Yes Yes Yes
Business model Yes Yes No Yes
Popularity Yes No Yes No
User base Yes Yes Yes Yes
Brand Image Yes Yes Yes Yes
User Friendly Yes No No Yes
This application of we are a model on resources of Twitter suggest that Twitter has
several resources that can be used for long term competitive advantage because they are
capabilities of Twitter. Such as financial resources human resources are example of some of the
resources that are useful for moderate competitive advantage. But business model of Twitter is
very effective and the capability of organisation hence can be used for long-term competitive
advantage. This means that revenue generation model and popularity of Twitter used
collaboratively can allow Twitter for a long term sustained competitive advantage in social
media industry (Min and et.al., 2016). Along with this Twitter can also so take advantage from
strong user base and positive brand image. Brand image of Twitter has been significantly

affected by its pioneering action in microblogging and subsequently this also become a popular
platform for news and which is why Twitter Ken use its popular popularity and brand image
along with strong user base to create long term competitive advantage. This can also be used in
future strategies of Twitter is capabilities of the organisation. In this capability is one of the
capability and strength of Twitter is its user-friendly application which is easy to be used by and
hence have opportunities that its user base can increase in future. This is because Twitter can be
used by everyone and is also available in multiple languages.
3.
a) Twitter’s current strategies and range of practical alternatives for future
Every business organisation has the strategies which enable them to achieve the organisational
goals effectively and efficiently. Strategies are a course of action in which actions are linked with
organisational objectives and guide organisational members and employees to act in a way that
directions contribute in achievement of organisational objectives (Schneider, 2016). Twitter has
its own strategies, strategies of Twitter has been involved in it business model. Revenue model
of Twitter is family is primarily based on advertising and around 85% of revenue of Twitter is
based on advertising sales. Another revenue model for Twitter is data licensing in this Twitter
can share insights about users and they can be used by businesses.
Strategies of Twitter for competitive advantage lie in its real-time data distribution. This is the
reason that Twitter has gained more popularity than any other social networking and site and
online platform. These are some of the strategies the Twitter is practicing and along with this
there are many other strategies that Twitter Ken adopt in future to sustain it growth. These
strategies can be discussed in form of models and one of the models that provides strategies that
Twitter can follow in future is Porter generic strategies model. The model is as follows
Cost leadership
This is a strategy in which cost of organization is lowest in industry and this strategy allows
organisation to give benefits of low cost to customers. In case Twitter adopt this strategy they
will have to focus on broad market and ensure adequate investment capital which enables it to
keep its cost is lowest possible.

Differentiation
This strategy include that features of the product are unique and clearly distinct from product of
its competitors (Maros and Rosli, 2017). This strategy enables organisation to present its product
as exclusive as possible and through this they can generate high revenue by offering the product
at a comparatively high price. Twitter can adopt this strategy binding distinct and unique features
in Twitter. This will require that Twitter focuses on broad market and all the users of Twitter.
This means that Twitter has to focus on advertisers as well as other uses of social media
regarding its different and unique features.
Cost focus
This is strategy in which organisation adopt to lowest possible cost in its industry but focus of
the organisation remains to limited group of customers (Ernst and et.al., 2017). This means that
company target niche market and this allows company to understand the Dynamics of market in
terms of its customers and cost of the product.
Differentiation focus
This strategy include that company develops unique and distinct product but like strategy of cost
focus, focus of the company remains on a niche Market. Practices of this strategy are also like
differentiation strategy and when Twitter adopts this strategy in future they will have to create
different and unique features for a particular market (Islami, Mustafa and Latkovikj, 2020). This
means that Twitter can developed distinct features for advertisers and allow them benefits of its
unique features.
Along with porters generic strategies another model which is known is BCG matrix can be used
for analysing possible future strategies for Twitter. BCG matrix is as follows
Dogs- These are products with low cash generation as well as low market growth rate. This type
of product drains resources and requires to be removed from the portfolio. This also requires that
when company has low growth rate and low cash generation in such case they adopt strategies to
increase case condition and subsequently increased market growth rate.

Question mark products- These are the products in which market growth rate is high but cash
generation is low. In this situation Twitter required to invest in products so that they can be
shifted into star quadrant.
Star product- These products are market leaders and to retain there leadership this product
require ongoing investment. These are the products that hi in growth rate as well as their market
share is also high.
Cash cow product- These are product which are able to generate case but at the same time the
market growth rate is low (Mohajan, 2017). This means that touch companies in needs to take as
much advantage is it can take before their business cycle complete. These are also so know as
well established product and businesses which have low scope for growth.
b) Selection and Justification of strategy that Twitter should pursue in future
Several strategies were discussed above that Twitter can adopt in future but selection of
strategy to be adopted by the business organisation depends on three key elements. These key
elements are known as suitability acceptability and feasibility. These the elements are discussed
in suitability, acceptability and feasibility (SAF) model. This model is as follow-
Suitability
This is most important factor in the model for strategic choice. This is because suitability e off
strategy is the key to whether or not the strategy will do to and work the way a in which
company wants it to do. There are several criteria on the basis of which suitability of the strategy
can be analysed these are environmental suitability expectation suitability and suitability on the
basis of capability. Respect another word can be explained as suitability of strategy being
selected with expectations organisation and resources and capabilities of the organisation. In case
the strategy being selected for organisation is not suitable for or objective achievement then this
will be wastage of resources and efforts.
Acceptability
This factor is concerned with acceptability in terms of Returns after applying the strategy risk for
applying the strategy and possible reaction of stakeholders regarding strategy (Bwemelo, 2017).
Returns in strategy are measured in both financial as well as non financial manners. This mainly

depends on stakeholders of the organisation and those who are related with strategy. Return can
be e calculated on the basis of cost benefit analysis, profitability analysis, real operations analysis
and shareholders’ value analysis. Risk is also an important factor which requires attention while
determining the strategy to be adopted by the Twitter. Risk can be termed as probability of
failure of strategy in financial losses and impact on brand and corporate image. This is very
important to consider is associated with the strategy because in case of failure firm will face
financial losses and risk included in the strategy is also required to be e less than profit expected
of the strategy. Risk basically requires to be calculated risk in which expected profit are worth
taking risk.
Feasibility
This is third element in the model Feasibility is concerned with possibilities that strategy chosen
can be performed and practiced in reality (Wu, 2020). This also includes analysing about
availability of resources abilities of members of organisation to perform on the strategy and
capability to actually implement the strategy being selected. Financial feasibility is also an
important aspect to be considered infeasibility and which can be analysed by analysing cash flow
and break even analysis and some other financial measures can be taken for that. Feasibility in
other words can be defined as possibility of strategy that it can be materialized available
resources men power management power and equipments.
On the basis of SAF model and analysis of strategies that Twitter can adopt it can be considered
that differentiation is one of the strategy which is suitable acceptable as well is visible for Twitter
to adopt in future. Some of the reasons through which selection of differentiation strategy can be
justified are as follows-
 Twitter has capability in terms of financial resources and human resources that can be
used for creating differentiation in the present product of Twitter.
 Technology e is another capability of Twitter and differentiation in Twitter is mainly
concerned with technological utility and Twitter can use it technological capabilities to
create differentiation in its product.