Strategic Management Report: Twitter Strategy Formulation and Analysis

This report provides a comprehensive strategic analysis of Twitter, examining its strategy formulation approaches (deliberate and emergent) and their limitations. It explores the importance of strategic management for major organizations in the microblogging and social networking industry, highlighting the competitive environment Twitter faces, including threats and opportunities. The report evaluates Twitter's strategic capabilities using the VRIO framework, offering insights for other companies. It also analyzes Twitter's current strategies, proposes alternative strategies, and recommends a future strategy using the SAF strategic model. The analysis covers competitive rivalry, threats of new entrants, bargaining power of suppliers and buyers, and threats from substitute products. The report concludes by summarizing key findings and recommendations for Twitter's strategic direction.

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
Why development of strategic management is important for major organizations in the microblogging
and social networking industry?..............................................................................................................4
Critically analyze the competitive environment facing Twitter in the social networking industry.
Evaluate opportunities and threats...........................................................................................................4
Evaluation of strategic capability of Twitter using VRIO framework and lessons that other companies
can learn from the analysis......................................................................................................................6
Critically analyze Twitter’s current strategies and propose a range of alternatives that can be adopted
by the company in future.........................................................................................................................7
Using the SAF strategic model, select and justify the strategy that Twitter should use in the future.......9
CONCLUSION........................................................................................................................................11
REFERENCES........................................................................................................................................12

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). Organizations keep on assessing
their strategies because changes keep happening in the business environment. Strategic
management ensures that goals within an organization are set and various issues are outlined. 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
organisation 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 organisation to analyse and evaluate different business strategies as this will lead to
support in accomplishment of business strategies. Twitter organisation 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 approaches is the view that
procedure rises after some time as expectations slam into and suit an evolving reality. Emerging
procedure includes a set of actions, activities, or conduct, predictable after some time. It can be
describe as the set of action which was not explicitly proposed" in the first arranging of planning
or strategies (Aswani and et.al., 2018). Different principle of deliberate approaches or emerging
approaches in mention below that will support Twitter organisation to identify and analyse 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 organisation 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 organisation
should not only simply n prospect titles. It is no longer possible for organisation 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 analysing limitations of these approaches Twitter will be able to take better and
accurate decision for organisational 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 organisation
practise and it will not alternative of business strategies. This type of business strategy is

not fixed as well as not predictable for performing organisational 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. Because of being focused on
a particular result may build an associations unbending nature and lower its speed of
responsiveness in case of changes in their working condition or negative criticism got
from the quest for a specific procedure.
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 performance as well
as productivity of the firm. 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 in order to enhance their overall 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. This will turn them to being loyal to the company and thus, it will be able
to gain a competitive advantage in the market. 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 – It is strategic management tool which analyze industry as
well as underlying levers of profit within given industry. 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. As respective organization is one of the leading
firm within Internet information providers. It include five forces such as threats of new entrants,
bargaining power of suppliers, bargaining power of buyers, threats from substitute products and
rivalry among the existing players. 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. By improving new items and
administrations. New items carries new clients to the overlap as well as give old client

motivation to purchase Twitter, Inc. 's items. By building economies of scale with the
goal that it can bring down the fixed expense per unit. Building limits and burning
through cash on innovative work. New participants are more averse to enter a unique
industry where the built-up players, for example, Twitter, Inc. continue characterizing
the gauges normally. It altogether diminishes the window of remarkable benefits for the
new firms consequently debilitate new players in the business.
 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. This will be useful in two different
ways. 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. By quickly improving
new items. Clients frequently look for limits and contributions on set up items so if
Twitter, Inc. continue thinking of new items then it can restrict the haggling intensity of
purchasers.
 Threats from substitute products - At the point when another item or administration
meets a comparative client needs in various manners, industry benefit endures. 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. in addition, through

understanding the center need of the client instead of what the client is purchasing. By
expanding the exchanging cost for the clients.
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
Porter’s generic strategies describe the way in which a company gains competitive
advantage in its chosen market. 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). Returns will be measured based on the benefits that stakeholders of the company
expect from the same. 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. Risk may be measured by the impact on liquidity, sensitivity evaluation and
stakeholder reactions, to deem how perfect a approach is.
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. Acceptability is
worried with the expectancies of the diagnosed stakeholders (in particular shareholders,
personnel and customers) with the expected overall performance consequences, which can be go
back, danger and stakeholder reactions. Return deals with the benefits anticipated through the
stakeholders.
Feasibility - The feasibility portion of the SAF strategy model is without a doubt the
make or wreck of any chosen approach. 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 this, the amount of man power, management power, material as well as
equipment that is required to make the strategy successful should also be taken into
consideration.
Basically, it should be ensured that the option that has been decided upon by the company
is in sync with the opportunities that are available to the company. If the option is not
appropriate, either for practical or some other reasons. Here its miles checked whether or not the

choice might be a success or no longer. The feasibility of a choice is decided after the
consequences from the external analysis were processed.
Therefore, from the model it can be said that, acceptability is the most relevant strategy
that should be adopted by the company in the future. This will help it in measuring the returns
that are associated with the strategy that it implements (Zhao and et. al., 2017). It will help the
company in analyzing the result of the strategy and developing plans for the future. The SAF
strategic model is important because it facilitates a small commercial enterprise live inside its
universal budget at the same time as adhering to the enterprise ethics, dreams and last motive of
its founder or proprietors. Thus, this model should be used in order to analyze the suitability,
acceptability as well as feasibility of a particular strategy within the company.
CONCLUSION
From the above report, it can be concluded that strategic management is an important
component for an organization. This is because it not only helps the management of a company
to make effective decisions, but also make them equipped with various management tools. It also
reduces the amount of risk that is associated with a particular strategy. Apart from this, it equips
the organization for any kind of challenges in the future. Organizations operating in the
microblogging as well as social networking industry should take into account. Twitter operates in
a highly competitive environment and owns various resources that can be categorized into four
categories, namely valuable, rare, organized and inimitable. There are many other models like
Porter’s Generic Strategies and Bowman’s Strategy Clock which can be used to determine
effective strategic positioning strategy for the products in order to gain a competitive advantage
in the market against competitors. The former consists of three strategies while the later consists
of 8 strategic positions. The strategies will ensure that organizational goals and objectives are
achieved in the most effective manner.

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