Report on Building Blocks of Competitive
Advantage of Facebook
Course Name: Strategic Management
Course code: MGT 4356
Submitted To:
Yeasmin Islam
Submitted by: Rhythmic Spirits
Date of submission: 24th April, 2017
Group- 02
SL. NAME ID
18 Jannatul Ferdous 111 131 436
Shabbir Ahmed 111 131 525
Simanta Banik 111 131 487
10 Salima Jahan 111 131 162
1 LETTER OF TRANSMITTAL
24th April, 2017
Yeasmin Islam
School of Business & Economics
United International University
Subject: Report Submission on the building blocks of competitive advantages.
Dear Madam,
We would like to take this opportunity to thank you for the guidance and support you have
provided us during the course of this report. Without your help, this report would have been
impossible to complete. With deep gratitude, we also acknowledge the guidance provided on
honorable faculty, friends, senior brothers and sisters. To prepare the report we collected what
we believe to be most relevant information to make our report as analytical and reliable as
possible. We have concentrated our best effort to achieve the objectives of the report and hope
that our Endeavour will serve the purpose. The practical knowledge and experience gathered
during our report preparation will immeasurably help in our future professional life.
We would really be grateful if we enlighten us with our thoughts and view regarding the report.
Also, if you wish to enquire about an aspect of our report, we would gladly answer your queries.
Thank you again for your support and patience.
Sincerely yours
Jannatul Ferdous
111 131 436
On Behalf of Rhythmic Spirits
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2 ACKNOWLEDGEMENT
We would like to convey our sincere thanks to ALLAH because ALLAH has given us the
opportunity to complete our report .The Almighty for whom we are living in this beautiful world
and able to conduct our works grateful to some individuals for the completion of the report
successfully. From online we gather much more information of Facebook. Internet was great
support & guidance for our report. We would like to acknowledge our honorable madam;
Yeasmin [Link] sincerely helped us and has given necessary suggestions in preparing our
report.
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3 EXECUTIVE SUMMARY:
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4 INTRODUCTION:
4.1 OBJECTIVES OF THE RE PORT:
The first objective of the report is to fulfill the partial requirement of the BBA program. Second,
to give an overview in Facebook. The objectives of the report are:
1. To analyze building blocks of competitive advantages of Facebook.
2. To understand the various building blocks of Facebook.
3. To make recommendation to eliminate the problems faced by Fcaebook on its over all
activities
4.2 METHODOLOGY:
The study requires a systematic procedure from selection of the topic to prepare the report. To
prepare the report data sources are to be identified and collected, data to be classified, analyzed,
interpreted and presented in a systematic way and it is must to find out the key points. This
overall process of methodology is given in the below which has been follow to prepare the
report.
4.3 SCOPE OF THE STUDY:
The scope of this report is confined to Building blocks of competitive advantages of Facebook. It
should only cove how they maintained their building blocks.
4.4 LIMITATION OF THE STUDY:
1. Shortage of time period
2. Insufficient Data
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3. Secrecy of Management.
4.5 IDENTIFYING DATA SOURCES:
The report is prepared by using secondary data.
5 LITERATURE REVIEW
Competitive advantage is a firms ability to outperform its competitors (earn higher profits).The
source of competitive advantage is value creation for customers. Sustained competitive
advantage comes from maintaining higher profits than competitors over long periods of
time. The four building blocks are closely related to one another. Because it reduces waste, the
time spent fixing defects, and the cost of after-sales service and support, achieving superior
quality has an important positive impact on efficiency. Moreover, insofar as superior quality is
valued by consumers, it increases the companys customer responsiveness. Besides, innovation
in both products and processes can enhance efficiency, quality, and customer responsiveness. For
example, process innovations, such as Toyotas lean production system, can simultaneously
increase efficiency and quality. Similarly, the ability to rapidly develop innovative new products
increases a companys ability to serve its customers. Finally, it is important to keep in mind that
achieving superior efficiency, quality, and innovation are all part of achieving superior customer
responsiveness.
Building a Competitive Advantage: 4 Factors
Efficiency
Quality
Innovation
Customer Responsiveness
Efficiency Equations
Efficiency = outputs/inputs
Employee Productivity = output per employee
Capital Productivity = output of invested capital
High Productivity = high efficiency & low cost
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Quality as Excellence
Superior Quality - attributes perceived to be better than rivals, including:
Design
Style
Aesthetic appeal
Features and functions
Level of service that comes with the product.
Quality as Reliability
A product is reliable if it.
Consistently works
Does the job well
Rarely breaks down
Innovation
Innovations give companies uniqueness- most important part of competitive advantage
in the long run
Product Innovation - new products or new attributes to current products
Process Innovation - making a new process for making and delivering products.
Customer responsiveness
Although good customer service is part of customer responsiveness, building blocks another part
is customer responsiveness. Customer responsiveness is accurately and insightfully giving
customers what they need, want or dont yet know they want and doing so more quickly than
anyone else. Using technology, including websites, email and telephone systems, to enable
customers to quickly get the information they need is one aspect of customer responsiveness.
Websites that are slow or hard to navigate frustrate customers. Complicated telephone queues
that require callers to wade through numerous menus before being permitted to speak to a
company representative can annoy a caller who just wants to ask a simple question. Prioritizing
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calls based on the clients importance to your company will help ensure that your clients
concerns are addressed quickly by a knowledgeable member of your staff. Changing your
telephone system to automatically direct important clients to a staff member increases
responsiveness to your top tier customers.
Customer response time: Customer response time is the period between the placement of an
order and the delivery goods or services. It can also refer to the delay in communication or
response from business to customer. In other words, it is the time between when a customer
makes an inquiry about a product or commits to a purchase a good or service and when it is
actually received by said customer.
This is an important concept to management because they want to make sure customers are
happy. The longer customers have to wait for the company to reply or ship orders, the more
dissatisfied they become. Management uses customer response time to measure and track how
quickly the company responds to customers in an effort to minimize this waiting period and
create more customer satisfaction and loyalty.
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CHAPTER-02
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6 COMPANY BACKGROUND
Key Facts
Name Facebook, Inc.
Logo
Industries served Internet
Geographic areas
Worldwide
served
Headquarters U.S.
Current CEO Mark Zuckerberg
Revenue $ 5.08 billion (2012)
Profit $ 53 million (2012)
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Employees 4,619 (2012)
Main Competitors Twitter, MySpace, Google+, LinkedIn, and many others
Originally called the facebook, Facebook was founded by former-Harvard student Mark
Zuckerberg (while at Harvard) who ran it as one of his hobby projects with some financial help
from Eduardo Saver in. Facebook, Inc., incorporated on July 29, 2004, is focused on building
products that enable people to connect and share through mobile devices, personal computers
and other surfaces. The Company also enables people to discover and learn about what is going
on in the world around them, enables people to share their opinions, ideas, photos and videos,
and other activities with audiences ranging from their friends to the public, and stay connected
by accessing its products. The Company's products include Facebook, Instagram, Messenger,
WhatsApp and Oculus. The Company also engages in selling advertising placements to
marketers. Its advertisements let marketers reach people based on a range of factors, including
age, gender, location, interests and behaviors. Marketers purchase advertisements that can appear
in multiple places, including on Facebook, Instagram, and third-party applications and Websites.
Facebook enables people to connect, share, discover and communicate with each other on mobile
devices and personal computers. There are various ways to engage with people on Facebook,
including News Feed, which displays an algorithmically-ranked series of stories and
advertisements individualized for each person. Instagram enables people to take photos or
videos, customize them with filter effects, and share them with friends and followers in a photo
feed or send them directly to friends. Messenger allows communicating with people and
businesses alike across a range of platforms and devices. WhatsApp Messenger is a messaging
application that is used by people around the world and is available on a range of mobile
platforms.
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6.1 MISSION:
Facebooks mission statement is-
To give people the power to share and make the world more open and connected.
The company focuses on making its social networking web site an important part of individual
users lives. The following are the significant components of Facebooks mission statement:
1. Empowering people
2. Enabling sharing
3. Connecting the world
The empowering people component of Facebooks mission statement signifies the companys
goal of making its online social networking service practical for users to become more capable
online. The mission statement shows that this capability is in the form of enabling users to share
pieces of information. Such information may be in the form of texts, images, videos, and other
file types. The mission statement further indicates that Facebook Inc. has the goal of connecting
the world. A connection is created each time users become friends on the social media website.
6.2 VISION:
Facebooks vision statement, based on the companys social media service offering, is-
People use Facebook to stay connected with friends and family, to discover whats going on
in the world, and to share and express what matters to them.
This vision statement shows that the business is not just an online social networking site. Instead,
the company is established to facilitate valuable communication among individual users.
Facebooks vision statement has the following main components:
1. Global market
2. Facilitation of communication among friends and family
3. Tool for discovery
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4. Tool for self-expression
The global market component of Facebooks vision statement is based on the companys
specification of people as users, indicating everyone around the world. The vision statement
also shows that the company sees itself as a facilitator of communication among friends and
family. Moreover, Facebook Inc. aims to be a global discovery tool through information access.
In addition, the company aims to make its online social networking website a global tool for self-
expression. These components of Facebooks vision statement push the company to grow
internationally to maintain its leadership position in the global social media market.
6.3 COMPETITION IN MARKET:
Instagram is possibly the largest competitor that Facebook faces, even though Instagram is now
owned by Facebook. Instagram is more popular with teenagers and tweens, because its simpler,
more private and very visual in nature. So while FB isn't competing with Instagram for revenue,
it is competing with it for users and the time those users spend on social media platforms.
Facebook has expressed concern about the rise of Instagram, since the younger generations will
steer the social media trends. Teens appreciate that their viewers arent the many relatives
theyve connected with on Facebook, and they value the fact that they can express themselves
easily on Instagram.
Snapchat is gaining in popularity quickly, because it allows users to reach out only to the few
people that they've selected and not all their friends at once. To use Snapchat, you send a picture
that the recipients are able to view for a short period of time. The picture then vanishes never to
be seen again. This allows teenagers and people of all ages privacy without any worry that the
images might resurface at a later time.
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LinkedIn is a professional site that isnt as popular as Facebook, but it is becoming the main
platform for professional profiles and recruiting. Companies use LinkedIn to find potential
applicants, and applicants use it to find new jobs, indicating that LinkedIn could present a picture
of the future of the hiring process. Having a LinkedIn profile could easily become a necessity for
people seeking employment in the future.
Google's (GOOG) Google+ has attempted to acquire Facebook users through its social media
platform, but its user rate is paltry compared to FB's count. Twitter (TWTR) also competes with
Facebook for users and that users time, but the nature of Twitter makes it less of a direct
competitor than Google+ has positioned itself to be.
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Chapter-03
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7 IDENTIFYING THE BUILDINGS BLOCKS OF
COMPETITIVE ADVANTAGE OF FACEBOOK
7.1 SUPERIOR EFFICIENCY:
Facebooks Economies of Scale:
Economies of scale are an important part of Facebook's competitive advantage, but not in the
same manner as low-cost manufacturing firms or utilities companies. Technology's tendency to
evolve rapidly means that technology companies exist in a dynamic environment.
To remain competitive, tech firms must update their existing offerings and roll out new products
or services. This is accomplished through spending on internal research and development (R&D)
or by acquiring smaller innovators, and large companies can generally afford to spend more on
R&D and acquisitions. While higher spending does not guarantee staying power, it increases the
likelihood of success.
Facebook's most obvious source of competitive advantage is the network effect. The company's
flagship social network had 1.65 million monthly active users, as of March 2016, with 1.51
billion mobile monthly active users. Facebook also owns two of the most popular mobile
applications: Instagram and WhatsApp. With social media, a network generally becomes more
valuable as its user base grows. Smaller communities generally have less to share, consume and
discuss. Facebook has created an interest-neutral multimedia platform that allows users to
engage friends, family, acquaintances, total strangers and businesses in a variety of ways. Large
networks are also more valuable to advertisers, Facebook's primary source of revenue. Large
networks provide more data and access to a large group of potential customers. The relative
failure of Google Plus demonstrates the power of Facebook's network effect.
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Brand identity provides some benefit to Facebook, as it is immediately distinguishable from any
upstart social network. However, this benefit is largely captured in the network effect, and the
history of online services shows how quickly well-known brands like AOL or MySpace can
move into and out of public favor. Intellectual property can help on the margins by improving
data collection capacity, but this is a minor contributor to moat. Facebook owes no advantage to
regulatory restrictions.
The existence of Facebook's competitive advantage based on these factors is difficult to deny,
but the sustainability of that advantage is up for debate.
Superior
Effeciyency:
Efficiency =
outputs/inputs
Customer
Responsiveness: 1. Network Effect Quality as Excellence:
Facebook achived Customer [Link] Facebook is a company that
responsiveness by provide products and
Suprerior Quality And
Innovation
services
Innovation.
Innovation:
Facebook develops
new product
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Quality as excellence and reliability:
A company can create quality as excellence by emphasizing attributes of the service associated
with product. .Facebook is a powerful company with different products and services that
competes in most industries. Facebook was recently valued at $201.6 billion, making it the
22nd largest company in the world. Majority of its value is derived from advertisements. In order
to generate more advertisers, Facebook continually adds features that might be annoying to some
of its users but are attractive to advertising companies. As a company, Facebook are also
following such some of the attributes. These attributes are competencies, credibility, reliability,
responsiveness and communication.
Features:
The 10 of the best features of Facebook:
1. Events
Want to know who among your friends is celebrating a birthday? For those who want
to update their social life, Events is the feature for you. Without it, you would not know what is
going on with your friends.
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2. Timeline
With the new Timeline feature, pictures, new friends, and other content are flowing smoothly in
a wider, double barrel river. Like most re-designs, Timeline was met with mixed criticisms. But
some people like it better than the old wall which was too cramped.
3. Social Plug-ins
Want to comment on an article that you read about Barrack Obama or Lebron James? With
Facebook social plug-ins, it is now possible to make a comment on various sites such as the New
York Times and Global Grind. All you have to do is log-in to your Facebook account and your
comment will be directly posted on the site where you made the comment.
4. Embed-in-Post
This is where Facebook scores a major advantage over Twitter. When posting articles, videos,
and pictures on Facebook, the linked content is delivered right in the post. This way, you do not
have to make another click.
5. Turn off Push Notifications
With a little adjustment on the settings Tab of your Facebook app, you can easily switch off push
notifications. After all, you do not have to be always informed about what is going on with your
friends and what is keeping them busy. Anyway, it could be an invite to play Candy Crush or
Farmville.
6. Relationship Status
With this new feature, it would be much easier to determine whether the guy or girl you met
recently is single, engaged, married, or in an open relationship. All you have to do is invite them
to become your Facebook friend. Once confirmed, you can easily look at their profile and check
their relationship status.
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7. Facebook Messenger
For some people, messages popping up once in a while can be annoying. However, it turns out
that others like the chat platform. Today, it is now one of the top 75 most downloaded apps in the
App Store.
8. The "Like" Button
Liked the picture or comment that your friend just posted? Well, it used to be that you need to
type words such as "Like," "Yeah," or "Yes" to approve of a comment. Now, you just have to
click on the Like button.
9. News Feed
This was one of the new updates that were met by protests from its opponents. Zuckerberg
responded calmly. Now, using Facebook will never be the same without the News Feed in our
walls.
10. Photos
Undoubtedly, this is the most popular feature of Facebook. Launched in October 2005, Photos
was the brainchild of Napster co-founder, Sean Parker, and was engineered by Scott Marlette.
Now, it is giving Instagram a run for its money.
Design
The interface in Facebook is a very simple one and the design is plain and easy to use. The colors
used are basic white and blue, and the overall layout is neat and well spaced. This sets Facebook
apart from the networking sites that are cluttered with obsolete tools. Through over its starting
time to now the style of Facebook has been changed.
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Services:
Facebook offers a wide variety of products and services, including communications and
advertising platforms. Many of these products and services such as the Facebook mobile app,
Messenger, and Paper are part of your Facebook experience. Other services, such as
Slingshot, Rooms, or the [Link] app, offer more independent experiences (ex: they may
not require you to register for or sign in to the service using your Facebook account). Certain
services, such as Page Manager or Audience Insights, are products that we offer business
partners such as advertisers. All of these Services are covered by Data Policy, which describes
how to collect, use and disclose information. Sometimes supplemental terms may also apply to
specific products or services, which can tell about through those services.
Competencies:
Facebooks core competency is social graphs and networks. They really understood how and
why people connect. Using this knowledge they are able to build a product where people kept
pulling in friends and family keeping the social network growing.
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Credibility:
Facebook does not allow total data to access. Such the way by Facebook is credible that, in
Facebook, if a developer wants to access some content such as a friend list, he/she needs to
submit his/her Facebook application for review in order to obtain permission.
Reliability:
Facebook's main task is with making sure the site is up and running 24 hours per day, 365 days
per year. To support a global user base, they keep a watchful eye on their various internal and
external monitoring tools and systems so people can be able to connect and share with friends
and family regardless of whether it is noon in New York or midnight in Manila. They manage
high traffic load by balancing the user experience against available worldwide capacity.
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Responsiveness:
Facebook has been working to improve customer service-focused features for Page
administrators for some time, most recently with the introduction of Saved Replies, a feature
that allows Page admins to quickly respond to incoming inquires with canned (pre-written)
replies. Now, admins will be able to tout just how fast they do answer their customers questions,
as a number of Facebook admins report seeing a response rate feature. The addition will show
a Pages responsiveness info to Page admins, and if the rate is high, it will also be displayed to
Page visitors via an icon below the cover photo.
Courtesy:
People can share their courtesy with Facrebook easily:
Communication:
Facebook change the personal communication. Now personal communication involves photos,
statuses, and likes and very little one-on-one. When a photo is posted it is shown to all friends,
and depending on your privacy settings, to even more people. Therefore, story is transmitted to a
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large group of people, most of who know very little about the context of the photo. After all,
these images and words put up there are what we consciously choose as what we want people to
see. As discussed in visual rhetoric, a photo is only but an instant, a very limited snapshot, of
everything else in the world image.
8 INNOVATION:
The process of translating an idea or invention into a good or service that creates value or for
which customer will pay. To be called an innovation, an idea must reduce cost and must satisfy a
specific need.
For businesses, this could mean implementing new ideas, creating dynamic products or
improving your existing services. Innovation can be a catalyst for the growth and success of a
business, and help to adapt and grow in the marketplace.
On the other hand, innovation can mean changing business model and adapting to changes in
environment to deliver better products or services. Successful innovation should be an in-built
part of an organizations business strategy, where an organization create a culture of
innovation and lead the way in innovative thinking and creative problem solving.
Innovation can increase the likelihood of business succeeding. Businesses that innovate create
more efficient work processes and have better productivity and performance and deliver better
product or services in order to further satisfy customers needs and expectations.
To remain innovative, companies need to develop new products or services and processes and
do it quickly. Innovation and its ability to create competitive advantage for firms are at the very
core of this concentration.
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To manage a company effectively through innovation and business development, structured and
informed analysis is needed. Each innovation has different aspects, some referring to its value
proposition, some to its future users, some to probable responses from its competition, and so
forth. An innovation does not become successful by taking a one-sided focus on these aspects.
Facebook's innovation is smart. Though in Business news headings Facebook is a giant of social-
networking sites in present world, one of the stories of Facebook is rarely said that is companys
innovation culture. It encourages everyone to learn by making and share responsibility of ideas
with all employees which are the major plus for Facebook. Moreover Facebook now very active
in our mobile phones though mobile app because it notice that people use their mobile more than
desktops or laptops on daily basis. So now mobile companies are bound to provide Facebook app
for their customer satisfaction. This is the competitive advantage which Facebook enjoy. To
maintain competitive edge, it should analyze all the relevant information and carefully observe
the current trends to make smoother to its users.
Facebooks Innovations:
Timeline: This feature is perhaps the most remarkable features of the latest changes. The
timeline look like a magazine with all users activities and information in the same place. The
true innovation here is that users can provide photos and thus adding their own unique
histories to the social network.
Application integration: Facebook redesigns a lot of app and other services. This
integration has turned Facebook into a sort of entertainment hub and recommendation
engine. Facebook is positioning itself as an all-inclusive information, entertainment, photo,
chat, and videoconferencing solution.
News Feed: It changes the overall Facebook experience. When we log in, we see every time
of our friends Facebook activities. News Feed compiled status updates, profile changes,
birthdays, and upcoming events, among other things. It also featured a Mini Feed on your
profile page, which was a timeline of your personal activities.
Wall: It served as the original profile space for users. We could post on our wall (text only)
or our friends. The Wall also listed changes to a given users profile, like when their profile
picture was edited, or if they added new friends. Another key feature of Facebook available
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since its inception is personal messaging, which allowed Facebook users to message one or
more friends at a time.
Massaging: Another key feature of Facebook available since its inception is personal
messaging, which allowed Facebook users to message one or more friends at a time.
Tagging: Facebook adopted a feature innovated by Twitter. Users could post attachments to
one anothers walls things like photos and videos by putting the name of a friend, an event
name, or a brand or group name.
Like Button: It is the most iconic feature of Facebook. We can show support, interest or
good humor on someone elses post. It also used in business purpose for giving
advertisement of any product or service and share any types of news.
Check-in Service: With the mobile revolution, the use of this feature is increasing day by
day. We can share our location with friends through this service.
9 CUSTOMER RESPONSIVENESS
The world is no longer huge enough to get in touch with our loved ones. Facebook has turned
this world into a global village. We can talk, chat and even share our pictures and videos with
our friends anytime regardless of which part of the world they belong to. Facebook is the worlds
most popular social networking website today because of its illustrious features. Instead of its
lavish features, the Facebook has recently introduced another impressive service which helps to
enjoy an amazing journey with the Facebook.
Facebook announced sweeping changes to its business pages that enable brands to better interact
in after-sale activities. This move was only the latest in a number of updates the network has
announced in the course of 2015, all aiming toward turning its business pages from a mere
promotional tool into a full-service customer hub.
Facebook's Customer Service Turn
After years of treating its messaging option like a stepchild, 2015 was the year in which
Facebook began emphasizing brand responsiveness on its business pages.
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First was the Call to Action button, placed within a page's cover image and designed to allow
customers an easier way of getting in touch with the brand. Messages like "Contact Us" all
sought to help brands and customers connected more easily and efficiently.
Next, Facebook began to revamp its direct messaging system for brands. The network began to
track response rates for individual inquiries through this system, recording both how many
messages went unrecorded and the speed of response.
Here, Facebook Support service guides with some comprehensively to get an Uber Ride with
Facebook Messenger: Just Go Ahead Facebook is keeping its users counting by adding
tremendous facilities to itself, every single day. Over the past year, Facebook has added
integrations with hotels, retailers and household brands to help making your lives easy and now,
the latest Facebook service is an even more thoughtfully created integration with the worlds
most renowned cab service, Uber. Uber ride can now be booked with Facebook messenger; even
if you dont have the Uber app. Facebook messenger has now enabled its users to call a cab ride
or even signup for Uber with a single tap. The ride receipts and the ride status updates will be
delivered to you on Facebook messenger. The dream behind this integration is to make travelling
as simple as sending a text message.
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10 SWOT ANALYSIS:
Facebook Inc.s strengths and weaknesses, as well as social media market opportunities and
threats can be identified through a SWOT Analysis of the company. A SWOT Analysis
identifies the internal strategic factors (strengths and weaknesses) and external strategic factors
(opportunities and threats) significant to the business. In the case of Facebook Inc., these factors
pertain to the dynamics of the online social networking environment and online advertising
market. While Facebook remains the leading player in the social media market, this SWOT
Analysis highlights issues that the company must address to continue in its market position.
A SWOT analysis of Facebook Inc. indicates strengths that support the organizations leadership
in the online social media business. However, Facebook must continue innovating to ensure such
market position, considering the threats facing its social networking website and online
advertising services.
Facebooks Strengths:
1. Integration with websites and applications
2. More than a billion active monthly users
3. Excellent users experience
4. Understanding of users needs and behavior
Facebooks Weaknesses:
1. Weak CTR of advertisements
2. Social network lacks of some features
3. One source of revenues advertisements on Facebook
4. Attitude towards users privacy
5. Lack of website customization
6. Weak protection of users information
Facebooks Opportunities:
1. Increasing number of people using Facebook through mobile devices
2. Expansion to China
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3. Diversify sources of revenue
4. Open Facebook marketplace
Facebooks Threats:
1. Increasing number of mobile internet users
2. Users using ad-block extensions
3. Slow growth rate of online advertising
4. Identity thefts
5. Weak business model
Facebooks SWOT Analysis Recommendations
Facebook Inc. benefits from its leading market position in the social media business. However,
this SWOT Analysis points out a number of issues that the company must address to maintain its
growth and profitability. It is recommended that Facebook must diversify its business to
minimize market risk exposure while exploiting possible additional sources of revenues to keep
the organization growing. Another recommendation is for Facebook Inc. to continue its research
and development (R&D) investments to increase its capabilities in counteracting cybercrime that
victimizes users of its social media services. The company must also continue its efforts in
negotiating with governments to open up markets where it currently has minimal or no presence.
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Chapter-04
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11 FACEBOOKS MAIN COMPETITIVE ADVANTAGE:
Facebook Inc. owns the world's largest social network. Although Facebook has all the building
blocks of competitive advantage, its main competitive advantage that makes it sustainable is The
Companys network effect and value innovation. Facebooks success story has been a very
interesting one and this is clearly a company that has managed to create a competitive advantage
in its field plainly by increasing the level of interaction between its users. The social networking
scene is a volatile one where people frequently shift between providers and grow tired of
individual websites quite easily. The main competitive advantages are:
1. Design
The interface in Facebook is a very simple one and the design is plain and easy to use. The colors
used are basic white and blue, and the overall layout is neat and well spaced. This sets Facebook
apart from the networking sites that are cluttered with obsolete tools.
2. User Activity
Facebook promotes interaction between its users through many features including the Like
feature, the Comments feature and the Sharing feature. Users can poke each other and send
private as well as public messages. The above mentioned features are innovative and previously
unknown ones that provide a clear competitive advantage.
3. Target Market
The target market for Facebook is quite broad, and theres something for everyone. From
discussion pages to fan pages to groups, communities and applications and games, the Facebook
scene is never boring. One major competitive advantage that Facebook holds is its role as a
platform for many fun and interesting applications as these applications are the biggest rage
online.
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4. Privacy and Trust
Facebook has managed to create an image thats synonymous with trust and efficiency. People
trust that their personal information will be safe with Facebook, as theyll have full control over
their profile and what they choose to display.
Facebook goes through an image revamp every single year, and new features are added and
unpopular ones removed in a continuous process. Thanks to its popularity and its huge number of
users, advertising in Facebook has become effective and popular and the website generates a lot
of revenue through this.
12 IS FACEBOOKS COMPETITIVE ADVANTAGE SUSTAINABLE?
Facebooks competitive advantage is dependent on how well they adapt to their ever-growing
pool of competitors.
In order for Facebook to sustain its competitive advantage, it needs to-
Keep its users happy by continuing to improve the website
Adding more applications in order to keep their users loyal and have easy accessibility to
the network.
Facebook currently has more than 500 million active users that have invested a lot of time and
energy into building their friend and client networks. For some people, having these huge
networks of users translates into money and marketing opportunities. Because of this, it would
take a big problem for people to start dropping Facebook. Users can access Facebook on their
Smartphones, i-pods, i-pads and other devices. Facebook has been adapting to all new
technology to sustain its competitive advantage and be known as the top social networking
website. Facebooks customers expect privacy. They want to know that their profiles and
private information are safe from hackers, stalkers, and others that are looking to exploit their
personal data. It is important for Facebook to uphold its practice of keeping users information
safe and accessible to people according to their account settings. Users trust Facebook with their
private information and this is mainly due to how long Facebook has been around providing user
support and added security as necessary.
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Yes we can finally say that the competitive advantage of Facebook is sustainable. The following
picture will show its success story from birth-
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13 CONCLUSION:
14 REFERENCES:
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respond-to-customers-messages/
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advantage/
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