Strategic Management Analysis: Twitter's Competitive Landscape

This report provides a comprehensive strategic analysis of Twitter, examining its strategy formulation approaches, including deliberate and emergent strategies, and evaluating their limitations. It critically analyzes the competitive environment facing Twitter, utilizing Porter's Five Forces to assess opportunities and threats from competitors like Facebook and Instagram. The report applies the VRIO framework to evaluate Twitter's strategic capabilities, identifying valuable, rare, and inimitable resources. Furthermore, the report recommends a future strategy for Twitter using the SAF strategic model. The analysis highlights the importance of strategic management in the microblogging and social networking industry, emphasizing the need for effective strategies to provide direction, measure performance, and increase efficiency. The report concludes with insights into how Twitter can navigate its competitive landscape and leverage its strengths for future success.

Strategic Management

Contents
INTRODUCTION...........................................................................................................................................3
MAIN BODY..................................................................................................................................................3
Analyze and justify what makes the Twitter strategy formulation approach deliberant and emergent.
Evaluate the limitations of both approaches to strategy formulation.....................................................3
Critically analyze the competitive environment facing Twitter in the social networking industry.
Evaluate opportunities and threats.........................................................................................................5
Using the SAF strategic model, select and justify the strategy that Twitter should use in the future....11
CONCLUSION.............................................................................................................................................13
REFERENCES..............................................................................................................................................14

INTRODUCTION
Strategic Management can be defined as a process that involves setting objectives,
analyzing the competitive environment, internal business operations, an evaluation of strategies
etc. The continuous planning, monitoring, analysis as well as assessment of all the requirements
of the company in order to achieve goals and objectives can be achieved is referred to as
strategic management (Aguinis, Edwards and Bradley, 2017). It also ensures that the internal
environment of the firm is in line with the objectives. Not only this, effective strategic
management within an organization significantly contributes to its overall success. Organization
chosen for this report is Twitter, which is a social-networking service company based in
California, United States. Users can post and communicate with each other through interactive
messages that are known as “tweets”. The report analyzes the reasons that make the strategy of
the company. It also explains the development of organizational strategies and plans along with
an assessment of the impact of strategy making in a turbulent environment. Lastly, the
significance and difficulties associated with formulating and implementing a strategy are also
discussed.
MAIN BODY
Analyze and justify what makes the Twitter strategy formulation approach deliberant and
emergent. Evaluate the limitations of both approaches to strategy formulation
Twitter is one of the most popular company which is dealing in social networking sites
and providing services which is as per the needs of customers. It is very important for this
organization to create and develop effective and efficient business strategy which will lead to
assist in growth and development of business (Gruber and et.al., 2015). It is crucial for
respective organization to analyses and evaluate different business strategies as this will lead to
support in accomplishment of business strategies. Twitter organization is benefited by its unique
and interesting approach in which in users can message across through the world wide area. In
this uses can send short messages which is called “Tweets”. There are different types of business
strategies such as deliberate and emergent approaches. Both of these approaches are effective
and support Twitter to enhance business activities. Deliberate strategic approach includes formal
planning or a vision of business in order to form strategic management activities as well as
emphasized on the benefits of acting intentionally. Emerging procedure includes a set of actions

and predictable later (Aswani and et.al., 2018). Different principle of deliberate approaches or
emerging approaches in mention below that will support Twitter organization to identify and
analyses the most effective and efficient business strategy that will lead to growth of business.
Principle of deliberate approaches
 Intention Vs attention - This approach will support organization to take better and correct
decision which that will lead to develop strong relationship with customers and gain
proper insight.
 Role Vs Title – This principle of deliberate approaches state that Twitter organization
should not only simply n prospect titles. It is no longer possible for organization to be
based on titles it should consider roles also while developing strategies.
Principle of emergent approaches
 This approaches is treats strategy as the continuous process of business which includes
testing and learning of business.
 Emergent approaches is consider as initial hypothesis according to which market is
created.
 In this approaches respective company will implement changes either on the strategy or
when it will be executed.
There are various drawback and limitation of deliberate and emergent approaches (Mogaji,
2019). By analyzing limitations of these approaches Twitter will be able to take better and
accurate decision for organizational growth and development.
 Limitation of emergent strategy – This type of approaches are not predictable and it will
be very difficult for respective company to create and develop a plan for enhance
business activities. This type of strategies only occur as the ongoing part of organization
practice and it will not alternative of business strategies. This type of business strategy is
not fixed as well as not predictable for performing organizational activities in more
effective and efficient manner.
 Limitation of deliberate strategy – This type of business strategy is very fixed as well as
rigid which lead to have impact on performance of business. It will be difficult for
organization to make changes.

Why development of strategic management is important for major organizations in the
microblogging and social networking industry?
It is very important for social networking site to have effective and efficient business
strategy in order to conducting business activities in more effective manner (Chae, 2015). There
are many reason for social networking and micro blogging major player that is Twitter to
develop an effective and significant strategy.
It provide direction – Strategy and management of strategy is significant in providing
direction to business and its employees for performing organisational task in correct manner. It
is important for Twitter to manage its strategies as this will support in providing proper guidance
and support to employees for performing required business task.
Measure performance – Strategies can be describe as the guideline that will provide
direction to employees for performing business activities (Nisar and Prabhakar, 2018). Twitter
company will be able to measure its performance and implement required changes as per the
strategy management process.
Increase efficient – Strategy management is significant in order to increase effectiveness and
efficient of business. This will lead to accomplishment of desired goals and objective of
business.
Critically analyze the competitive environment facing Twitter in the social networking industry.
Evaluate opportunities and threats
Twitter operates in aa highly competitive environment and can face a lot of threat from
various social networking organizations like Facebook, Instagram etc. there are various issues
that can arise from the competitive environment and can affect the overall organisation. The
major issues can include financial management and this is because if the company fails to
manage its finances effectively, it will have to face many negative consequences (Ansoff and et.
al., 2018). Technology can be another issue that the organization can face and thus, should be
taken into consideration because organizations today are adopting latest technologies for
business operations.
Apart from this, it is also important to recruit the most qualified as well as experienced
staff should be hired. The reason behind this is that qualified employees will help the company in
achieving goals and objectives in the most effective manner. Customers are considered to one of

the greatest assets for any company and thus it should be made sure that their needs as well as
expectations are met. Thus, for analyzing competitive advantages Twitter company will going to
implement Porter’s five force analysis explanation of this are as follows :-
Porter’s five force analysis – Manager of Twitter inc. can utilize Porter Five force
analysis for understanding how five force influencing profitability and developing strategy for
improving competitive advantages of Twitter Inc. as well as profitability within internet
information providers industry. Explanation are as follows :-
 Competitive rivalry – For Twitter competitive rivalry is high because in past decade
social media industry is highly competitive with enhancing new players like Twitter,
Myspace, Instagram and so on. Due to high entry barriers of industry most of the players
get fail in reaching fan base of respective company.
 Threats of new entrants – New participants in Internet Information Providers brings
advancement, better approaches for getting things done and put focus on Twitter, Inc.
through lower evaluating methodology, decreasing expenses, and giving new offers to
the clients. Twitter, Inc. needs to deal with every one of these difficulties and assemble
compelling hindrances to protect its serious edge.
 Bargaining power of suppliers - All most all the organizations in the Internet
Information Providers industry purchase their crude material from various providers.
Providers in predominant position can diminish the edges Twitter, Inc. can procure in the
market. Ground-breaking providers in Technology segment utilize their arranging
capacity to remove more significant expenses from the organizations in Internet
Information Providers field. The general effect of higher provider bartering power is that
it brings down the general benefit of Internet Information Providers.
 Bargaining power of buyers - Purchasers are regularly a requesting parcel. They need
to purchase the best contributions accessible by addressing the base cost as could
reasonably be expected. This put focus on Twitter, Inc. benefit over the long haul. The
littler and all the more remarkable the client base is of Twitter, Inc. the higher the
bartering intensity of the clients and higher their capacity to look for expanding limits
and offers. By building an enormous base of clients. It will decrease the dealing

intensity of the purchasers in addition to it will give a chance to the firm to smooth out
its deals and creation process.
 Threats from substitute products - For instance benefits like Dropbox and Google
Drive are substitute to capacity equipment drives. The danger of a substitute item or
administration is high in the event that it offers an incentive that is exceptionally not the
same as present contributions of the business. By being administration arranged instead
of just item situated.
Evaluation of strategic capability of Twitter using VRIO framework and lessons that other
companies can learn from the analysis
VRIO analysis is technique brilliant for evaluating resources of business as well as thus
competitive advantages. VRIO stands for value, rareness, imitability and organized explanation
of these in relation of Twitter are as follows :-
VRIO Analysis
Resources Valuable Rare Inimitable Organized
Products ✓
Hotel Locations ✓ ✓
Patents ✓ ✓ ✓
Employees ✓ ✓ ✓ ✓
Value
 Valuable resources are those which provide assistance to an business firm in gaining
competitive advantages in relation of competitors. Different valuable resources for
Twitter are product, employees, patents and services.
 For an organization their products are valuable resources because they help company in
standing out of competition. Because of this, Twitters perceived value within customers
is very high as well as their services are valuable because they assist in attracting
customers and encourage them for using Twitter.

 Services also contribute in overall differentiation of brand. For an organization patents
are also valuable because they can because company can offer their products and services
to customers without any interference of customers.
 Employees are also valuable resources because it provide assistance in serving customers
within effective manner. Along with this, also help in accomplishing goals and
objectives.
Rareness
 These are those assets that must be gained by one organization and assist it with
contrasting rivalry. The items are not uncommon on the grounds that comparable items
can be offered by the contenders and they can increase upper hand.
 The administrations are uncommon in light of the fact that contenders can't give in those
specific administrations. Additionally, the outlandish administrations picked by Twitter
are not found without any problem.
 The workers are likewise an uncommon asset since they are exceptionally prepared and
talented, which isn't probably going to be the situation for different organizations.
 Patents are an uncommon asset since they are not accessible effectively and in this
manner, the contenders can't process indistinguishable licenses from Twitter. Because of
this, the separate organization can utilize its licenses with no sort of impedance from
contenders.
Imitability
 Inimitable assets are those that are difficult to duplicate or mimic at a sensible cost. The
matchless assets of the particular organization are licenses just as workers. While items
and lodging areas are imitable assets.
 Some results of Twitter are not imitable on the grounds that items that are fabricated and
created by it, can be duplicated by some other brand. This is on the grounds that it doesn't
include a lot of cash.

 Services are imitable on the grounds that offering of Twitter won't discovered anyplace
else. Then again, licenses are supreme in light of the fact that they are not legitimately
permitted to be replicated.
 Employees are likewise a supreme asset in light of the fact that the representatives
working at Twitter many have unique aptitudes and information that is absent in workers
of different organizations.
Organized
It include those resources which are organized on timely basis within an business firm.
Thus, it is important for an organization to organize resources for gaining competitive
advantages against others and stand out within market. Moreover, resources have to be arranged
are staff through providing proper training sessions. Whereas, there are several resources which
not required to be organized such as patents, products and services.
Critically analyze Twitter’s current strategies and propose a range of alternatives that can be
adopted by the company in future
The strategy of Twitter is basically centered around creating, distributing and publishing
content for a specific buyer’s audience or followers through a social media platform. The current
strategy of Twitter is to build mechanisms that enables it as well as other businesses operating on
its platform to make effective use of the same and enhance their business profitability (Demir,
Wennberg and McKelvie, 2017). One of the aspects for this is Twitter Ads that distribute
promoted tweets, accounts as well as trends for a certain amount of fees. Also, there are various
alternatives that Twitter can adopt in the future. The same are explained below through two
models –
Porter’s Generic Strategies
The strategies are useful because they help organizations in identifying a potential niche
market. There are three strategies in the framework that are explained below –
Cost Leadership – In a cost-leadership strategy, the main objective of an organization is
to become a low-cost producer within the industry. The company either opt for keeping the
prices of its products as low as possible or make sure that it has a large market share with prices

that are average. The overall aim of the company that adopts this strategy is to keep the prices of
products low so that it can gain competitive advantage in the market (Durand, Grant and
Madsen, 2017). Companies that opt for cost leadership strategy have an investment capital,
logistics as well as a low-cost labor. Such organizations basically focus on their internal
processes.
Differentiation – In this strategy, an organization seeks to gain a competitive advantage
by offering products that are unique or making changes to the existing products after carefully
understanding the dimensions that are valued by the customers (Porter's Generic Competitive
Strategies (ways of competing), 2016). In this, the respective organization, Twitter can one or
two attributes of its services that the customers value the most and then position itself uniquely
so that those expectations can be met. In this stage, effective marketing plays an important role
so that customers understand the benefits of the same.
Focus – In this strategy, an organization gains a competitive advantage by either focusing
on the price or differentiation. The organizations that adopt this strategy will select a group of
segments and then tailor its strategy accordingly. There are two types of focus strategies, cost
focus and differentiation focus. In the cost focus strategy, the company makes sure that the costs
of the products are kept low and the needs of the customers are also satisfied (Ginter, Duncan
and Swayne, 2018). Whereas, in the differentiation focus, the company targets a niche market
and adds unique features to the products. This helps it in staying ahead of the competitors in the
market.
Bowman’s Strategy Clock
The strategy clock is a model that outlines various options for the strategic positioning of
the products. In simple words, it explains the way in which a product should be positioned so
that the company gains a competitive advantage in the market. The model consists of eight
strategic positions and is explained below in context to Twitter.
Low Price and Low Value Added – This strategic position is about quantity selling and
the products as well as services that are offered have a low value along with the prices being
lowest. Therefore, this is the least competitive area in the model.

Low Price – This strategy is about becoming the lowest option of cost for the buyers and
can have low margins. Therefore, efficiency of the processes and cost reduction are essential for
the overall success of the company.
Hybrid – This strategic position involves some element of product differentiation as well
as low price. This can be a very effective positioning strategy for Twitter. Also, the main aim of
companies in this strategy is to persuade the customers.
Differentiation – The primary purpose of differentiation strategy is to offer customers
the highest perceived value of products (Lasserre, 2017). Branding and product quality play an
important role in this strategy.
Focused Differentiation – As per the view point of Jim Riley, this approach goals to
place a product at the highest price stages, wherein clients buy the product due to the high
perceived value (Bowman's Strategic Clock (Strategic Positioning), 2018). This the site strategy
adopted through luxurious brands, who goal to acquire top class costs through surprisingly
centered segmentation, merchandising and distribution.
Risky High Margins – This strategy involves high risk because companies set high
prices and also, do not offer anything extra. And if the customers will continue buying the
products, th profitability of the company will increase.
Monopoly Pricing - Where there is a monopoly in a marketplace, there is most effective
one business offering the product. The monopolist doesn’t want to be too concerned
approximately what cost the consumer perceives in the product – the simplest preference they've
is to shop for or no longer.
Loss of Market Share – This is considered to be the worst position in the model and
describes if the company is in decline or exiting the market.
Using the SAF strategic model, select and justify the strategy that Twitter should use in the
future
It is important to formulate a right strategy and SAF (Suitability, Acceptability and
Feasibility) model can be used for the same. The model is explained below –

Suitability – This is the most important factor within the model as the suitability of an
option is the key to if the strategy will do what the company wants to achieve. Suitability is
usually assessed by the company through various criteria like environmental suitability,
capability suitability as well as expectation suitability (Makadok, Burton and Barney, 2018). To
assess the overall suitability of a particular strategy of the business, it should be made sure if the
strategy is utilizing the company’s strengths effectively or not. In this stage, it is basically
analyzed if the option that is being taken into account is suitable for the company or not.
If Twitter decides to enter a new market, it should ideally use the SAF strategic model.
Also, when the company assesses the suitability, it should make sure that the strategy is aligned
with the external environment. Various tools like SWOT, PESTEL etc. can be used for the same.
Within the perspective of suitability, its miles checked whether the option being taken into
consideration is suitable for the aim that need to be executed. For example, in practice this will
suggest that an evaluation is completed to investigate whether or not a specific product is
suitable for the market wherein the organization operates.
Acceptability – This particular aspect of the model basically measures all the returns,
risks as well as reactions of the stakeholders that result from a particular strategy (Schilling and
Shankar, 2019). The returns can either be financial or non-financial. Returns calculations may
be achieved through any range of techniques which includes cost-benefit evaluation, profitability
analysis, real-options analysis and shareholder fee evaluation. In terms of risk, the opportunity of
a strategy’s failure and any economic losses, logo or corporate influences should also be weighed
up.
Often the shareholders, who are also a number of the stakeholders, are individuals who
make certain that the enterprise is supplied with capital. It is therefore additionally very
important that they remain supportive of the enterprise (Trigeorgis and Reuer, 2017). Therefore,
Twitter should analyze the returns that the strategy can yield for the company.
Feasibility - Whether or no longer the commercial enterprise has the assets, aptitude and
abilities to really enforce the method is prime to its achievement, therefore economic feasibility
needs to be assessed by way of forecasting and analyzing coins-flows, appearing spoil-even
evaluation and a number of other financial assessments (Wheelen and et. al., 2017). Apart from