GSBS6060 Strategic Management

Introduction of the firm

The development of the technologies and the evolution of the social media platforms in the recent years have helped in bringing forth changes in the communicational aspects. Facebook, the social media company, which is based in California, has developed voluptuously as per the needs and preferences of the customers. The steady growth of the organization in the market helped in maintaining the strategic market position of the firm. The annual report of the organization, published in 2017, portrayed that the revenue of the organization is US$40.653 billion. The operating income as on 2017 was US$20.203 billion whereas the net income of the organization was US$15.934 billion. The growth of the organization is relevant to the technological advancements that are made by the era.

The purpose of undertaking the discussion is to identify the strategic position of the organization and the issue that is faced by the same while operating in the international markets. The discussion enumerates the issue that is faced by the organization and the actions that are undertaken by the organization in order to mitigate the same.

Strategic position of the firm in the business industry

The market position of the organization is based on the privacy of the data and information, which has helped the organization in maintaining a competitive advantage of the same while operating in the international markets. The market orientation and collaboration with different cell- phone companies has helped in the growth of the organization in maintaining the strategic market position of the organization in the relevant industry. The features that are induced by the organization in the services have helped the same in gaining a competitive advantage over the other existing players in the market. The privacy policies of the organization have helped the sane in maintaining the ethical standards of the functioning of the businesses. On the other hand, it helps in retaining the loyalty of the customers of the business and its global exposure simultaneously.

The issue

The data scandal that was faced by the organization, Facebook, referred to as the Facebook–Cambridge Analytica data scandal has affected around 87 million users of the organization in the year 2014. The Data was alleged with the charges of identifying the voter’s opinion, which has helped in maintaining the value of the politicians. As per the report of The Guardian, the data was sold by the organization to the politicians for their personal benefits. It affected the ethical considerations while reconsidering the activities of the organization while operating in the international markets. The nature of the personal information that was gathered of the users was based on the identification of the likes and dislikes and the friend circle to which they belonged. Political representatives hired Cambridge Analytica in order to use the data and thereby influence voter opinion. It is stated that the data had potentials to influence the outcomes of the elections that were organized. However, Cambridge Anlaytica stated that the data was not utilized in the presidential campaigns of   Donald Trump, and Ted Cruz in 2016. The scandal affected the goodwill of the organization while operating in the international markets. The different ethical considerations that are compromised through the unethical usage of data collection and data breach. 

Strategic significance of the issue for the firm

The scandal adversely affected the goodwill of the business as related to the compromise of the ethical standards of the business. It has affected the proper functioning of business relating to the standards of the software -manufacturing corporations. The scandal has relatively affected the brand value and the proposition of privacy that was issued by the organization. It is stated that the issue affected the trust and loyalty of most of the Facebook users who switched to different social media platforms after the scandal was revealed.  Issues relating to the Consumer Protection Acts and the compromise of the corporate ethical standards have affected the share value of the organization in the international markets. The loyalty of the customers is based on the identification of the psychological factors, which drives their interest. The data that was acquired by the Cambridge Analytica was potential for creating psychographic profiles of the different subjects. The data was made in a detailed manner, which helped in creating the individual profiles of the people in a particular location. It was aimed at assisting the promotional needs of the in different political events.

The scandal has strategically disrupted the functioning of the business as the other existing competitors could win over the trust of the users whose personal data was compromised. It is stated that the data scandal created a huge impact on the functioning of the business as per the objectives of the organization. The significance of the scandal is based on the degradation of the market value of the organization and the tough competition that the company faced in order to maintain the congruency between the services proposed and the value creation abilities of the business. 

Facebook’s actions or responses to the issue

The CEO of the organization sent a message to all the stakeholders who have faced the issue relating to the data breach, apologizing for the same. The CEO has assured against the data breach in order to gain over the trust of the users. The formal apology that was undertaken by the organization has helped the same in maintaining the loyalty of the customers. The organization has taken steps to improve the ethical standards relating to the consumer protection and privacy of the data.

Conclusion

Therefore, from the above discussion it can be stated that the organization, Facebook faced issues relating to the consumer safety and data breach, which affected the goodwill of the organization while operating in the international markets. The issue is enumerated in the discussion part and the significance of the issue on the organizational position is also being discussed in the sections. It has helped in looking into the adverse effects that are created by the scandal on the organizational performance.

References

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