) summarize what the company does for its customers (Oscar)
Facebook is a social media company that runs an online social media and social networking website. Since smartphones have become more dominant the company has also developed an app for its platform to be user-friendly on smartphones, not just computers. People make a profile on the platform where they can add friends and share status updates, pictures and videos with their friends. When someone thinks of Facebook’s customers, they might think of the people using the service. However, that would be incorrect because the users do not pay Facebook. A customer is someone who is paying for a product or service. In the case of Facebook, the customers are advertisers and the products are the users.
The company is able to attract many customers and retain them thanks to its large user base and vast data analytics. Facebook has an average of 2.2 billion monthly active users. Each of these users have a profile that lists what type of stuff they are interested in, what types of Facebook pages they like and follow and a lot of other information. The large user base and data analytics make Facebook a very attractive platform to invest in for marketers. The reason being that it will be easy to target and deliver ads to many people. Facebook has developed amazing algorithms that will make it very efficient to deliver specific ads to specific people that would be interested in specific types of products.
2) diagnose the company’s competitive situation (that is, tell what key challenges its external environment poses and whether its internal strengths, – its resources and capabilities – give it capacity to meet those challenges) (Oscar)
In terms of competition, Facebook is dealing with the very best in the business and newcomers. Basically, any online platform that is not a Facebook product (Whatsapp, Messenger, Instagram, Facebook) is a competitor of Facebook because it takes on-screen time away from Facebook. Google would have to be Facebook’s biggest competitor. Google has a lot of valuable real estate on its websites to place ads and gets tons of traffic through Google, google services, and YouTube. If anybody can match a large user base like Facebook’s it would be Google. All the time newcomers are coming for Facebook through new social media company ideas. For example, Snapchat is one of the more successful social media companies that rivals Facebook. Snapchat is so good that Facebook actually took the “stories” innovation of Snapchat and integrated it into its own products of Facebook and Instagram. Facebook has been innovating for many years which is how it got to its current position, but they must keep innovating in order to keep their top market position. The advantage of being a much bigger company with a lot of capital when compared to competitors, other than Google, Facebook can imitate many of their successful ideas or simply buy the competitors out like it did with Whatsapp and Instagram.
Some other challenges Facebook faces other than competitors are gaining back lost trust from users and keeping users engaged. Facebook has the resources to develop better cybersecurity, so they can vet advertisers and companies they partner with to make sure those companies are not accessing sensitive information from users like Cambridge Analytica was able to. Facebook is working to develop more features to keep users engaged and spending more time on Facebook. Another issue that goes along with keeping users engaged is ad saturation. Facebook is running out of space where it can put ads. Also, the more people use phones with smaller screens compared to computers the less ads Facebook can place because of limited space. By having users spend more time on Facebook due to new and innovative features Facebook can deliver more ads to users.
In 2016, Facebook’s employees working under Alex Stamos, the security chief, made some alarming discoveries. “Mr. Stamos’ team discovered that Russian hackers appeared to be probing Facebook accounts for people connected to the presidential campaigns, said two employees” (TNYT). Mr. Stamos decided to investigate the issue further and he eventually brought forth his concerns about Russian interference in the elections to Facebook’s top leaders who debated what their plan of action should be. They wanted to remain politically neutral since an attack from either side would be risky. The Russian involvement turned out to be much more extensive than they had initially anticipated and Facebook later disclosed that Russian troll posts had been viewed by about 126 million Facebook users. These posts attacked Democrats and favored Mr. Trump in order to influence the public opinion. Facebook has had to rely on Ms. Sandberg to indulge in lobbying and utilize her connections in Washington in order to withstand the political criticism that they have been undergoing ever since. Apple and Google have also heavily criticised Facebook under the same pretext.
“Members of the Myanmar military were the prime operatives behind a systematic campaign on Facebook that stretched back half a decade and that targeted the country’s mostly Muslim Rohingya minority group, the people said” (TNYT). Opponents of Facebook have also criticised it heavily because Facebook allowed its platform to spread hate speech through the creation of fake accounts.
3) tell to what extent it has created or seems to be on the way to creating sustained competitive advantage (Shakun)
Facebook’s most valuable resource is made up of its vast user base. The 2.2 billion monthly active users are crucial to the company since that is what they sell to marketers. These MAUs are extremely valuable since they help marketers target a huge audience that is most relevant to them. The search grids enable them to find a large number of users instantly. There is no other social network that is as widely used and accepted in the world. Facebook is ahead of the game and this is the most rare feature any company could possess. Facebook’s MAU’s cannot be bought elsewhere. They were created through years of strategic planning and the popularity of its user base makes it unique. It is fair to say that imitating these numbers is rather difficult. Mark Zuckerberg’s initial efforts to create the most user friendly interface imaginable and Sheryl Sandberg’s further efforts to monetize this resource was crucial. This combination of Facebook’s financial and technological efficiency helps them sustain the initial value created by Zuckerberg. It has undoubtedly created a sustainable competitive advantage for the company.
4) tell what the company’s basic guiding strategic policy appears to be (Shakun)
We believe that Facebook’s guiding policy is to transcend all geographic and political boundaries in order to make its service available to every individual on the planet while maintaining a seamless user interface. The policy focuses on following a transparent process, making known all information about its purpose, plans, policies, and operations. The purpose of this is to maximize the number of daily and monthly active users so that the demand of Facebook’s advertising services surpasses that of its competitors. Although these users aren’t directly Facebook’s source of revenue, they make up the resource that lets Facebook attract countless firms to utilize its advertising services.
5) analyze whether the guiding policy appears to be a good one (Kathya)
Yes, Facebook guiding policy is good. Users have the freedom to connect online with anyone as long as they both accept the connection. Also, users have the freedom to access all of the information available to them. Every person is able to uses Facebook regardless of his or her contribution or participation. Facebook promotes openness and transparency, so users have the power to establish a presence.
6) discuss alternative strategies the firm might consider and whether the firm ought to adopt those strategies (Kathya)
Facebook is developing algorithms for social VR that can allow people have conversations with long distance family in which VR will make them feel their loved one are in the same space as them. Also, Facebook is working on developing a solar powered drone to provide internet access to people around the world. Moreover, Facebook can develop a voice search engine. Social media platforms have not embraced the possibilities that could come about if the technology were to take off to make this an essential addition to how social media platforms present their user interface.
In addition, Facebook needs to make changes to its privacy model. Facebook users should be able to control their privacy settings. Users should be allow to see which apps have access to their information. Facebook should restrict the sharing of users’ data with third-party apps on its platform. There should be a review process where users are able to select the information they want to share with third-party apps.Also, Facebook is now using facial recognition to detect if other users are using the same profile picture as their profile picture. Moreover, Facebook has created a new settings and privacy shortcut that allows users to see, edit, download, or delete information they have shared with Facebook.
7) Summarize what you think are the most important implications for the future of what you have learned about the firm and its strategies