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FACEBOOK’S STRATEGIC AUDIT

Strategic Audit

Facebook

Student’s Name

University

Date

Part 2

II. Internal Environment

Structure of the Company

Facebook has a CEO, COO, CFO, CTO, and Chief Product Officer (previously) in a hierarchical organizational structure. Mark Zuckerberg, the company's CEO, has a lot of power. It is through his responsibility for the greater part of casting voting shares. Additionally, the business has a board of directors. It provides supervision and direction.

Culture of the Organization

Facebook's way of life is known for being speedy. Additionally, it is collaborative and innovative. Creativity, accountability, and ongoing education are all incorporated into the company's values. The purpose of the company is crucial. Its goal is to connect people and make the world more open and connected (Brill, 2022). Diversity is also emphasized in Facebook's culture. The organization has put forth attempts to increase variety among its workers.

Facebook's marketing mix's advantages and disadvantages: The Four Ps Good: Facebook's principal item is its online entertainment stage. Users can connect with friends, family, and businesses through it. The platform is changing. It has elements like gatherings, occasions, and a commercial center (Tien, 2022). One of its strengths is Facebook's product's capacity to keep users engaged. Using calculations customize content to their inclinations. On the other hand, the platform has been criticized for handling user data and privacy concerns.

Price: Advertising is Facebook's main source of revenue. A bidding system determines the price. The organization has an enormous client base. Advertisers find it to be an appealing platform as a result. However, the company faces price competition from Google and Amazon, among other advertising platforms.

Place: Facebook is an internet-based stage open through cell phones and work areas. The organization has a worldwide reach. The clients are in pretty much every country. The platform can be used for free. Advertising, on the other hand, is the source of revenue for the company.

Promotion: Targeted advertising is the primary focus of Facebook's marketing strategy. Advertisers can use it to reach specific audiences. Behavior, interests, and demographics determine it. Additionally, the company makes use of social media influencers and content marketing (Lutz et al., 2023). One of the qualities of Facebook's advancement procedure is its capacity to furnish publicists with the itemized investigation and bits of knowledge. It becomes simple to examine how their advertisements perform. Be that as it may, the organization has confronted analysis for its treatment of political advertisements. On its platform, it includes the dissemination of false information.

Financial Resources

The following table compares the financial ratios of Facebook, Twitter, and Snap Inc. for the year 2020: TABLE.

Interpretation of the Table:

The profitability of a business is measured by return on equity. It shows how much benefit an organization creates with investors' cash. Compared to Snap Inc. and Twitter, Facebook's higher return on equity indicates that it generates profits more effectively.

Facebook generates revenue from its products more effectively because it has a higher gross profit margin than Snap Inc. and Twitter.

Twitter and Snap Inc., on the other hand, have a higher debt-to-equity ratio than Facebook. It suggests that Facebook has better financial standing.

Financial Position Indicator:

Three marks of Facebook's monetary situation for the beyond three years are as per the following:

Income Development: Facebook's revenue has consistently increased over the past three years. Income of $70.7 billion in 2020, up from $55.8 billion in 2018 (Lutz et al., 2023). It suggests that Facebook's business strategy can last. It has the potential to expand in the future.

Net Profit: Facebook's net income has consistently increased over the past three years. It had a net gain of $29.1 billion in 2020, up from $22.1 billion in 2018. It shows that Facebook is making a lot of money from its business.

Engagement of Users: Facebook has had areas of strength for staying the beyond three years. It has over 2.7 billion month-to-month dynamic clients starting around 2021. It demonstrates that Facebook's foundation is yet important and sought after among clients (Swathi and Sujatha, 2022).

III. SWOT Analysis - Situational Analysis

Strengths:

Large User Base: Facebook has over 2.7 billion monthly active users. It makes it one of the largest social media platforms. It gives Facebook a significant advantage over its competitors.

Strong Financial Position: Facebook has a strong financial position with consistent revenue. Net income growth over the past three years has also risen. The company also has no debt. It gives it more flexibility to invest in future growth opportunities.

Innovative Culture: Facebook's culture is known for being innovative and fast-paced. It allows the company to quickly adapt to changing market trends and user needs (Camacho and Barrios, 2022).

Advertising Platform: Facebook's advertising platform is a significant strength. It allows advertisers to reach specific target audiences. It does this with detailed analytics and insights into the performance of its ads.

Diversified Product Portfolio:

Weaknesses

Privacy Concerns: Facebook has faced criticism for handling user data and privacy concerns. It has damaged its reputation and trust among users.

Dependence on Advertising: Facebook's main source of revenue is through advertising. It makes the company vulnerable to changes in the advertising market and user behavior.

Regulatory Scrutiny: Facebook is facing increasing regulatory scrutiny from governments and regulators. It threatens its business model (Camacho and Barrios, 2022). The ability to collect and use user data is also threatened.

Monetization of New Products: Facebook has struggled to monetize new products such as Instagram and WhatsApp. It limits its ability to generate revenue from these platforms.

Competition: The social media industry is highly competitive. Competitors like Twitter, Snapchat, and TikTok are eager to gain market share. It puts pressure on Facebook to innovate and stay relevant among users.

Opportunities

E-commerce: The rise of e-commerce presents an opportunity for Facebook. It can expand its revenue streams. Offering new services to users will also be easy.

Metaverse: Facebook's vision for the Metaverse presents an opportunity to expand its product offering. It can also create new revenue streams.

Augmented Reality:

Diversity and Inclusion:

Expansion into New Markets: Facebook can potentially expand into new markets. For example, healthcare, education, and finance. It presents new revenue opportunities for the company.

Threats:

Privacy Regulations: Increasing regulations on privacy and data protection pose a threat to Facebook's business model. The ability to collect and use user data is also threatened.

Competition: The social media industry is highly competitive. New platforms are emerging all the time (Camacho and Barrios, 2022). It puts pressure on Facebook to innovate and stay relevant among users.

Cybersecurity Threats: The increasing sophistication of cybersecurity threats presents a risk to Facebook's platform and user data.

Changing User Behavior: Changes in user behavior. For example, a shift towards more private communication channels. It poses a threat to Facebook's advertising business model.

Negative Public Perception: Facebook has faced significant criticism and media coverage in recent years, damaging its reputation.

1V. Recommended Strategy

Based on the SWOT analysis, I recommend the company pursue a differentiation strategy. The company should focus on developing unique products. They appeal to environmentally conscious consumers and those who prioritize their health. At the corporate level, the company should invest in research and development. It creates new products that differentiate itself from competitors. At the business level, the company should expand its product portfolio. It should include eco-friendly and health-focused products. The company should focus on developing efficient supply chain management systems at the functional level. It will reduce its dependence on key suppliers and improve its international presence.

V. Justification

The strategy I propose addresses long-term issues such as a limited product portfolio and reliance on a few key suppliers. The company can provide more options by investing in R&D and expanding its product portfolio. It will lessen reliance on a small number of suppliers. It will make the business more competitive. As a result, it will be less prone to disruptions in the supply chain.

The organization will temporarily profit from the developing interest in eco-accommodating and solid items. This trend will likely continue. The organization will want to draw in additional clients by zeroing in on these areas. It will get a bigger share of the market.

The company can effectively address the strategic factors identified in the SWOT analysis by pursuing a differentiation strategy (Lutz et al., 2023). The company's well-known brand and established distribution channels will be used to promote and sell these individual products.

VI. Policy Development The following policies should be developed or revised to effectively implement the recommended strategy:

Innovative Work Strategy: The company's commitment to investing in R&D should be outlined in this policy. It will make products that are different and new.

Item Portfolio Strategy: This strategy should direct the turn of events and extension of the organization's item portfolio.

Production network the executives' Strategy: This approach should zero in on creating a proficient store network in the executives' frameworks.

VII. Implementation.

The following programs need to be created to put the suggested strategy into action:

Program for Research and Development: This program ought to be created by the innovative work group. It will be done in conjunction with the sales and marketing teams. The program ought to zero in on growing new and creative items.

Program for Product Expansion: The company's product portfolio should be the program's primary focus. It will lessen the organization's reliance on key providers and work on its worldwide presence. The teams that oversee each area should create the programs. Info and direction from senior administration are fundamental. Before implementation, senior management should approve the programs.

It is possible to finance the programs. The company has already allocated funds for product development and research and development. Even though the supply chain management program necessitates additional funding, the advantages of lessening reliance on significant suppliers and strengthening international presence outweigh the cost.

The programs should be prioritized and scheduled based on the company's strategic goals and available resources. The projects ought to be carried out in stages, with standard checking and assessment to guarantee they are on target and accomplishing the ideal outcomes.

VIII. Evaluation and Control

To evaluate the company's financial position, I recommend using a balanced scorecard approach. The balanced scorecard approach evaluates a company's performance from four perspectives: financial, customer, internal processes, and learning and growth.

The financial perspective evaluates the company's financial performance. It includes revenue growth, profitability, and return on investment. The customer perspective evaluates the company's ability to satisfy its customers (Lutz et al., 2023). It includes customer satisfaction, loyalty, and retention. The internal processes perspective evaluates the efficiency and effectiveness of the company's internal processes, including supply chain management and product development. The learning and growth perspective evaluates the company's ability to innovate and improve. It includes employee training and development and research and development.

VIII. Conclusion

In conclusion, I recommend that the company pursue a differentiation strategy by developing unique products that appeal to environmentally conscious and health-focused consumers. The company should develop policies and programs focused on research and development, product expansion, and supply chain management to guide effective implementation (Tien, 2022). The programs should be developed by the respective teams responsible for each area, with input and guidance from senior management. The company should use a balanced scorecard approach to evaluate its financial position and regularly monitor and evaluate the programs to ensure they achieve the desired results.

References

Büchi, M., Fosch-Villaronga, E., Lutz, C., Tamò-Larrieux, A., & Velidi, S. (2023). Making sense of algorithmic profiling: user perceptions on Facebook. Information, Communication & Society, 26(4), 809-825.

Brill, M. (2022). David Brill Landscaping Website Reconstruction and Facebook Rebrand.

Camacho, S., & Barrios, A. (2022). Social commerce affordances for female entrepreneurship: the case of Facebook. Electronic Markets, 32(3), 1145-1167.

Kraus, S., Kanbach, D. K., Krysta, P. M., Steinhoff, M. M., & Tomini, N. (2022). Facebook and the creation of the metaverse: radical business model innovation or incremental transformation?. International Journal of Entrepreneurial Behavior & Research.

Swathi, P. K., & Sujatha, K. S. (2022). Comparative Case study analysis of Social Media Platforms-Instagram, Facebook, and Snapchat.

Tien, N. H. (2022). Analysis of employer branding strategy of Facebook and experiences for Vietnam high-tech corporation.