Facebook Inc is a global online social network that has about one billion member accounts. However the organisation is less than 10 years old. Despite intense media excitement when Facebook listed as a public company in May 2012, the share price has bobbed around quite a bit since. Many business analysts are beginning to question the company’s long-term viability because it is difficult to discern a coherent business strategy. Your task in this case analysis is to answer two questions by critically analysing Facebook’s history, resources and market situation. Please do not just describe events, although you should read Facebook’s history to understand the background to your analysis. You should use the principles and concepts that you have learned throughout the unit to answer the following three questions:
Social Media has evolved as the modern resource in the hands of the common man belonging to the digital age, to keep in touch with his near and dear ones. This medium of interaction has grabbed lot of popularity all around the world, all due to its convenient and free of cost social interaction which has enabled to its end users to keep in touch with their friends across globe on a continuous basis. Face book Inc. provides one such user friendly and convenient social media platform, to its one billion users that enable easy real time interaction between all the related social groups and friends at no additional costs than setting up an internet connection. The users of the Face book services have to create their respective profiles on the social media site ‘face book’, by posting few of the mandatory information. The viral nature of the social media has the capability of spreading out real time social information within the user’s own network. Further, the individuals reading the user’s post also have the option of sharing the information ahead to their group of friends. Thus, any information posted by the user reaches the other people in his network within a fraction of seconds. This sharing of social information is the key concept that keeps several of the face book users hooked to this platform.
Background to the Company
Face book was launched in the year 2004 by its founder Mark Zukerberg that initially offered social networking service to a close group of Harvard University students. Currently the company has one billion registered users availing virtual social networking facilities through this website. The company handles large volume of social data posted by its users and maintains strict compliance with its privacy policies that supports its user base. The company became publicly listed on the stock markets in the year 2012 and launched its Initial Public offering in February 2012. The stock of this company received tremendous response from the public that reached its peak market capitalization of dollar 104 billion within three months of public offering. In the year 2012, the company’s CEO was ranked in the top 10 world’s billionaires.
The core webpage of Face book offers simple and user friendly content to its users. The users having no technical knowledge or web knowledge are also in position to easily adapt to the amazingly simple user interface of this website. The company as of today highly influences on personal and social relationships in context to the web behavior of its registered users. The company’s marketing and branding strategies of attracting more and more registered users are thus revolved around the web behavior of the people. ‘Personal Branding’ is a very prominent factor that has helped sustain the popularity of the Face book platform, allowing its users to constantly stay in touch with their relatives, friends and acquaintances located in any part of the globe (Whadcock, 2010).
The Face book’s business has grown tremendously in the recent past. The Revenues of this company have surged by approximately 60 percent in the last nine months and the company’s spokes personnel expect this impressive growth to continue in the near future. Apart from its core website, the company has other additional platforms that make it a market leader in the virtual social networking business. These additional platforms include Instagram, WhatsApp, Messenger and Search applications.
The Marketing strategy implemented by the company Face book Inc., have always been closely associated with the attraction of maximum customers and keeping the customers regularly hooked to the website. This strategy was intended to achieve instantaneous popularity to the website and that would be reflected in the company’s bottom line. The company face book Inc. had never invested in any of the heavy promotional activities. The company was an instant hit since its inception and had never designed any major ad campaigns. The sheer business model of allowing personal branding on a virtual media helped the user base growth for face book (Jurevicius, 2013).
(1) The Nature of Face book’s Marketing Strategy or Strategies since it began
Let us understand the key Marketing Strategies adopted by face book since its inception in the year 2004-
(a) Word of Mouth Promotion
The publicity of the social networking site Face book, was mainly on account of tremendous word of mouth publicity by the existing users of the Face book that raved to their acquaintances and close friends about the features and usability of this site.
(b) Publicity in the Media
This is one of the prominent marketing activities and one of the most applied strategies by Face book since it began operations. The huge media coverage given to the innovator business model ‘Face book’ helped a lot in the company’s promotion. The Company face book also intently shared its success story through a huge number of television interviews and print media articles.
(c) Third Party Promotions (through advertisers) – we will take example of KIA campaign to explain how face book marketed its presence in association with third party advertisers. KIA motors, a Korean company had launched ‘I Like’ campaign in association with face book. This campaign was indeed to strengthen the brand image of KIA motors and build an emotional relationship with public through the Fan Page of Face book (Klein, 2014).
(d) Introduction of real time social online gaming activities
This was one of the unique features offered by Face book that competed with the prevailing online gaming websites. There used to be several online gaming websites that allowed single users to play multiple online games. But Face book introduced the concept of social gaming that allowed multiple friends across the globe to share a single online gaming screen. This feature immensely increased the popularity of Face book and attracted more registered users.
(e) Introduction of Face book Music Service tool
This is another innovative feature of the Face book that attracted huge users on Face book. The launch of the music streaming service through its Music Service tool with attractive features attracted a lot of music lovers to the plat form.
(2) Strategic Marketing Options for Face book moving forward
Let us undertake a Porter’s 5 forces analysis to gauge strategies for ‘Face book’ business to move forward with the prevailing cut throat competition in the social networking business (Trefis, 2014):
The intensity of rivalry among the established firms is expected to be at moderate to high level in the near future, as a large number of existing competitors like Google plus is providing full featured social networking platforms on web as well as through new mobile applications. (b)
The Bargaining power of the Buyers is extremely high as the users may easily switch to the competitor platforms, without any switching costs. (c)
The Risk of entry by the potential competitors is moderate as the rapidly evolving technological advancement may attract new innovative players to enter the social networking business. (d)
The Bargaining Power of the suppliers for the Face book’s business would be low as the Face book would be a prominent customer for these hardware and software suppliers. (e)
The Threat of the substitute products may be moderate to high due to the constant evolution of the technological landscape and development of alternative mobile applications to face book’s business.
The careful study and analysis of the business landscape and marketing strategies of the company-Face book, has clearly indicated the following are the List of strategic Marketing options for the Company ‘Face Book’ to remain competitive and move forward in the virtual social networking business:
(a) Including a More user friendly and effective social search tool
The company may also introduce more user friendly and effective social search tools in their core web pages to stay competitive in their business. The users for example should be able to search most visited hang outs and most preferred costumes by their list of friends (Mourdoukoutas, 2014).
(b) Creation of additional value for advertisers
The company is expected to face tremendous business competition in the near future and can use effective marketing strategies like promoting its social networking platforms through third party advertisers to avert the business competition. The advertisers tying up with face book for web promotions may also have the option to have in store Face book merchandise as cross-promotional activity.
(c) Continuously innovate its offerings to the end users and adapting to changing user trends-
The social networking business is gradually becoming highly competitive due to the introduction of new technologies in the market. The Face book’s business would require to accordingly matching its user expectations to keep the users stable and engaged on the Face Book Platform. This business would clearly require an effective pull marketing strategy that keeps the users hooked to face book screen. This would be only possible by continuously updated to new technology and adapting to changing user trends thorough innovative applications.
(d) Effective development of Mobile device compliance and overall platform development for face book
The number of users opting for face book usage on mobile devices is increasing day by day. The overall platform development and achieving technological competence in terms of mobile device technology are the two key areas that would support the future competitive strategy and indirectly the marketing strategy of the company face book (Mourdoukoutas, 2014).
Overall, the Face book’s marketing strategy is revolved around promoting its user’s posted content and also giving a social spin to the content posted by the commercial entities on Face book page. The Company face book Incorporation is the most visited social networking site on the internet. The company’s high dedication to the mobile and web globalization and its right timing in entering the virtual social networking business has made the company successful. The company’s marketing and business strategy was also supported by the first mover advantage that the company got in exploring the virtual social networking world enabled due to high technological advancement of the twenty first century. Thus, the company’s simple business model enabled its business to multiply quickly without using any of the direct marketing or heavy promotional strategies.
Face book has already become a part and parcel of every common web user and is extremely popular connectivity tool between various social groups. The user friendly and simple appearance of the user interface screen of this website has further attracted the senior generation web users apart from the generation X and Y users. The Face book’s business hence forth would be showered with additional responsibilities in order to protect its current users from switching to another social media website/application.
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