Comprehensive Strategic Decision Making Report: Twitter's Business

This report provides a comprehensive analysis of Twitter's strategic decision-making process. It begins with an abstract summarizing the report's key findings, followed by an introduction outlining the strategic purpose of Twitter, which includes an external environmental analysis using PESTLE, competitive industry analysis using Porter's Five Forces, and a SWOT analysis. The report then delves into the development and evaluation of strategic choices, exploring cost leadership, differentiation leadership, and focus strategies. Each strategy's advantages and disadvantages are critically assessed in the context of Twitter's business. The report concludes with a recommendation for Twitter to adopt a differentiation focus strategy, offering suggestions for implementation such as linking to blogs, improving management systems, and enhancing security. Overall, the report aims to provide insights into Twitter's strategic positioning and offer actionable recommendations for future growth and development.

Strategic decision making

Abstract
This report has evaluated the importance of strategic decision making planning process.
This planning process is beneficial for every organization because it helps to create objectives
and also provide strategies to accomplish the goals and objectives of organization. This report
conclude the information about strategic purpose of Twitter which includes external
environmental analysis, competitive industry analysis and SWOT analysis of Twitter. With the
help of these strategic tools, the strengths and weaknesses of cited firm is identified. Further, this
report includes development of all strategic choices which includes business strategies.
According to the critical evaluation of all business strategies, their both advantages and
disadvantages are described in respect to Twitter. In last this report includes recommendations
which will be helpful and beneficial for the Twitter. The recommendations includes that Twitter
can adopt differentiation focus strategy. For this Twitter can link to blog, improve their
management system and security system etc.

Table of Contents
Abstract............................................................................................................................................2
Introduction......................................................................................................................................1
 a) Strategic purpose of Twitter...........................................................................................1
b) Development of strategic choices......................................................................................3
c) Evaluation of strategic choices...........................................................................................5
d) Recommendation and justification of preferred strategic choice.......................................6
Conclusion.......................................................................................................................................7
References........................................................................................................................................8

INTRODUCTION
Strategic decision making is a planning process which creates mission, vision and
objectives of organization and also decides a set of actions which are related to business
practices to achieve the goals and objectives. This planning process includes both the short term
and long term planning which are helpful for the organization. Strategic decision making is an
ongoing planning process which creates strategies to achieve strategic goals. To understand
strategic decision making process, Twitter organization is considered. This present report will
help in understanding concepts about the strategic purpose, choices and capabilities of an
organization.
a) Strategic purpose of Twitter
Introduction
Twitter is a San Francisco based company that provides services related to social
networking site whereby users can send as well as read messages known as tweets (short 140-
character messages). It was created by 4 people named Dorsey, Williams, Stone and Glass in the
year being March 2006. The launch took place in July 2006. Twitter is basically a social site
which provides services such as social networking and micro blogging to its customers. The
company provides easy and simple platform for consumers to communicate with each other. At
this platform, customers can easily share their ideas, suggestions and experiences with others.
The company can access the website through SMS or mobile device app (Eisenhardt, 2014).
Twitter has gained a large popularity as it has been regarded as amongst the 10 most visited sites.
In the year May 2015, Twitter even had a presence of 500 million users amongst which 302 were
active.
External environment analysis- PESTLE analysis of Twitter
Factors Impact
Political Twitter has to follow all the policies, regulations and rules which are
formulated by government. Changes in rules put impact on firm’s
operations.
Economic Changes in inflation rates put impact on the business operations of
Twitter's services. Other factors like foreign exchange rate, economic
growth pattern and interest rate also put impact on the business practices
1

of cited firm.
Social Preference, taste and buying behaviour towards using social networking
sites change continuously, so, Twitter has to adopt these changes and
provide services in such a manner so as to meet the demands of customers
(Papadakis and Barwise, 2012).
Technological Cited firm adopts new updated technology to compete with others.
Legal Company has to follow all the legal laws which are related to customer's
identification security and dignity.
Environmental Due to environmental and surrounding consideration, Twitter also
conducts CSR activities.
Competitive Industry analysis- Porter’s 5 forces analysis of Twitter
Forces
Bargaining power of
suppliers
Medium,
Due to huge competition among suppliers.
Bargaining power of
customers
High,
Due to high presence of substitutes in the market.
Customers are present in mass numbers.
Threat of substitute High,
Due to tough competition with competitors (Epstein and
Westbrook, 2012).
Threat of new entrant Low,
To compete others, new entrant will require high investment and
strong marketing channels.
Intensive rivalry among
existing players
Presence of huge competitors.
Growth of industry is fast and market is also mature.
SWOT analysis-
2

Strengths
 Twitter reach is high in respect to
customers.
 It is highly preferred by celebrities and
companies for the purpose of publicity.
 For each topic, number of influencers
are high.
Weaknesses
 In sending messages, words are limited
due to 160 character limit.
 Availability of current platform
provides little room for new changes
and improvements.
 Low maintenance rate.
(Porter, 2013)
Opportunities
 Firm can combine with more telecom
operators.
 Firm has chances to become as a search
engine.
Threats
 Paid influencers and fake or duplicate
celebrity accounts may give negative
impact on brand image.
 Tough competition.
b) Development of strategic choices
Strategic choices are mainly concerned with decisions which are related to the future of
organization and the procedure in which it requires to respond to both influences and pressures.
It is a part of strategic process and also includes elements such as evaluation and identifications
of alternatives which usually lead to the choice. In order to gain competitive advantage, Porter
suggested four business strategies which could be adopted by organization. The cost leadership
and differentiation strategies are adopted for the competitive advantage in the broad market
range. However, the cost focus and differentiation focus strategies are adopted in the narrow
market range. These strategies are related to the level to which future of business practices is
broad versus narrow and it is also related to the level to which business tries to differentiate their
products in the market place (Tushman, 2012). These four strategies are described below:
Cost leadership strategy
With the help of this strategy, objective of organization that is related to become the
lowest cost producer in the industry can be fulfilled. This strategy mainly involves two ways
such as:
3

 By increasing profits through reducing the costs. In this, company charges the industry
average prices to gain the competitive advantages.
 By increasing the market share and charging lower prices, in this company is still
creating reasonable profit on every sale because firm has reduce the costs (Ibrahim,
2015).
Main objective of this strategy is to produce standard products on huge scale with the little
differentiation which are readily accepted by the large number of customers.
Differentiation leadership strategy
Through differential leadership strategy, organization targets large market and its aim is
to achieve competitive advantage across whole industry. With the help of this strategy, firm
produces their products and services which are different and attractive from other competitors in
the industry. Differentiation is basically depended on the nature of industry and product. For a
successful differentiation strategy, a firm requires:
 New innovations, developments and good research.
 Effective marketing and sales of product.
 Deliver quality products to customers.
With the help of these points, market and customers will be able to understand the benefits
which are offered in products by differentiation (Mintzberg, , 2012).
Focus strategy
Organization uses focus strategy to concentrate only on niche market. For this, company
requires to understand the market dynamics and customer’s demands which are unique in nature.
This strategy enables company to focus on either cost or differentiation. To fulfil the demand of
market and customers, firm produces well specified products or uniquely low cost products.
Main purpose of focus strategy is to build strong relationship and brand loyalty with the
customers. With the help of this strategy, company makes their targeted market segment less
attractive towards the competitors which helps to increase the level of customer size (Strategic
choice is central to strategy making, 2015).
c) Evaluation of strategic choices
Basically, firm adopts strategies to attract more customers towards the product. In respect
to Twitter, it adopts different types of strategies to enhance its customer size and attract more
4

customers towards the services. The above mentioned four strategies have both advantages and
disadvantages. The critical evaluation is described below:
Cost leadership strategy
Main objective of cost leadership strategy is to establish business firm as the lowest cost
producer in industry. Twitter is following this strategy as they are not charging any price for the
account opening and maintaining. However, it can be analysed that due to free subscription, size
of the customers is increased and they are more attracting towards the social networking. Due to
no subscription charge of monthly or yearly, customers are more preferring Twitter to share their
ideas and experiences. But in contrast, it can be critiqued that due to free subscription, profit
ratio of company is affected. So, if they start charging nominal prices of yearly or monthly for
the account subscription, then it can increase the profitability of Twitter. In the present time,
cited firm can charge prices from celebrities or businessmen who are using the accounts and
charges can also be taken for their security and authenticity. Main purpose of charging prices is
to stop duplicate and spam accounts of famous celebrities. So, no one can misuse their personal
accounts. But, it can be said that if, Twitter starts to charge prices from its customers, then size of
their customers will be decreased (Duggan, 2013).
Differentiation leadership strategy
To adopt differentiation strategy, Twitter requires to do new innovation and
developments in their operations. The cited firm can also deliver quality services to their
customers. According to this strategy, Twitter can make it differ from its competitors in the
industry through providing special features and applications which are not provided by the
others. This strategy will give competitive advantage to Twitter. The cited firm can adopt new
and innovative technology to differentiate company in the market. However, if company adopts
new technology, then more customers will be attracted towards the firm’s services and due to
new technology, number of customers will also be increased (Song and Hwang, 2012). On the
contrast, it can be critiqued that while adopting differentiate strategy, company will face many
challenges such new updated technology is not user friendly, so, due to this, few customers may
dislike it. While adopting new technology, stakeholders like employees etc. of Twitter may also
face problems at the time of working and using the site. Therefore, before fully adopting the
strategy, Twitter has to train their employees so that they can effectively work with it.
Focus strategy
5

According to this strategy, Twitter requires to focus only on their niche market. For this
purpose, cited company has to understand both the market dynamics and customer’s demands
which should be unique. This strategy helps Twitter to focus either on their cost or on
differentiation. However, it can be critiqued that if, firm tries to focus on both cost and
differentiation strategy then in this situation, Twitter will face many barriers and challenges
which will affect the profitability and productivity of Twitter. By focusing on both, Twitter may
not be able to meet the expectations of their stakeholders.
d) Recommendation and justification of preferred strategic choice
According to the evaluation of above mentioned strategies, both advantages and
disadvantages of those strategies are analysed. Twitter will be recommended to follow
differentiation focus strategy which will be more helpful to them (The Future of Twitter: Social
CRM, 2009).
 With the help of this strategy, Twitter will be able to meet the expectations of all the
stakeholders like customers employees etc. According to this, Twitter can enhance the
word limit from 160 to 200 or 250. So, customers will use more Twitter site for the
communication. Increment in word limit will satisfy their needs because it will be more
helpful for them (Prajogo, 2016).
 Cited firm can improve their platform which provides them more space for new changes
and improvements. Availability of new changes and improvements will help firm to
increase its customer size as well as profitability.
 In future, Twitter can combine with more telecom operators for the purpose of enhancing
its business. The cited firm gives an effective platform to the customers, so they can
easily share their ideas and thoughts. With the help of this feature, cited firm has an
opportunity to establish as a search engine.
 Twitter can use their own CRM system which will help them to manage and track the
conversation within 140 sphere. With the help of this, cited firm will be able to improve
their management system.
 In the future aspect, Twitter can link to blog which will differentiate firm from other
competitors (Banker and Tripathy, 2014).
 Cited firm can improve their security system in order to stop hacking and spam of
accounts. Company can also create custom URL shorten-er with tracking facility.
6

CONCLUSION
With the help of this report, it is articulated that strategic decision making planning
process plays an important role in every organization. It helps to create mission, vision and
objectives of organizations in more efficient way. This process also helps to decide a set of
actions which are related to achieve the goals and objectives of organization. This report also
includes the concept about strategic choices which are beneficial for organization to run business
operations more effectively. Further, this report also includes the concept of different business
strategies which will help company to gain competitive advantage over their competitors.
7

REFERENCES
Books and Journals
Banker, R. and Tripathy, A., 2014. Does a differentiation strategy lead to more sustainable
financial performance than a cost leadership strategy?. Management Decision. 52(5).
pp.872-896.
Duggan, M. and Smith, A., 2013. Social media update. Pew Internet and American Life Project.
Eisenhardt, K.M., 2014. Reading 13: Strategy as strategic decision making. Readings. p.213.
Epstein, M.J. and Westbrook, R.A., 2012. Linking actions to profits in strategic decision
making. Image.
Ibrahim, A.B., 2015. Strategy Types and Small Firms' Performance An Empirical Investigation.
Journal of Small Business Strategy. 4(1). pp.13-22.
Mintzberg, H. and Lampel, J., 2012. Reflecting on the strategy process. MIT Sloan Management
Review.
Papadakis, V. and Barwise, P. eds., 2012. Strategic decisions. Springer Science & Business
Media.
Porter, M., 2013. THE EXTERNAL ENVIRONMENT. Entrepreneurship. 5. p.49.
Prajogo, D.I., 2016. The strategic fit between innovation strategies and business environment in
delivering business performance. International Journal of Production Economics. 171.
pp.241-249.
Song, W.Y. and Hwang, K.Y., 2012. Effects of External Environment and Organizational
Resources and Capabilities on Strategy and Performance: An evidence from an analysis on
ventures. The Journal of the Korea Contents Association. 12(2). pp.369-387.
Tushman, M., Lakhani, K. and Lifshitz-Assaf, H., 2012. Open innovation and organization
design. Journal of Organization Design. 1(1).
Online
The Future of Twitter: Social CRM, 2009. [Online]. Available through: <http://www.web-
strategist.com/blog/2009/03/22/the-future-of-twitter-social-crm/>. [Accessed on 16th January
2016].
8

Strategic choice is central to strategy making, 2015. [Online]. Available through:
<http://www.simply-strategic-planning.com/strategic-choice.html>. [Accessed on 16th January
2016].
9