Case Study Description of The Facebook IPO Litigation
Despite its success in the social-networking space, Facebook Inc.'s May 2012 IPO was largely considered a failure. Facebook faced multiple lawsuits and its share price had dropped significantly. Adversaries contended that Facebook had misled investors and violated securities laws. Were the allegations legitimate, and did the litigation pose a serious threat to Facebook's share price?
Swot Analysis of "The Facebook IPO Litigation" written by Lena G. Goldberg, Annelena Lobb includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Facebook Litigation facing as an external strategic factors. Some of the topics covered in The Facebook IPO Litigation case study are - Strategic Management Strategies, Disruptive innovation, Ethics, Financial management, IPO, IT, Product development, Regulation, Risk management, Social platforms, Social responsibility and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the The Facebook IPO Litigation casestudy better are - – digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, increasing transportation and logistics costs, central banks are concerned over increasing inflation, technology disruption, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies,
geopolitical disruptions, wage bills are increasing, etc
Introduction to SWOT Analysis of The Facebook IPO Litigation
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Facebook IPO Litigation case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Facebook Litigation, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Facebook Litigation operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of The Facebook IPO Litigation can be done for the following purposes –
1. Strategic planning using facts provided in The Facebook IPO Litigation case study
2. Improving business portfolio management of Facebook Litigation
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Facebook Litigation
Strengths The Facebook IPO Litigation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Facebook Litigation in The Facebook IPO Litigation Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Facebook Litigation in the sector have low bargaining power. The Facebook IPO Litigation has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Facebook Litigation to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Facebook Litigation is one of the most innovative firm in sector. Manager in The Facebook IPO Litigation Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Facebook Litigation has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in The Facebook IPO Litigation HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Facebook Litigation has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Facebook Litigation has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Analytics focus
– Facebook Litigation is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Lena G. Goldberg, Annelena Lobb can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Learning organization
- Facebook Litigation is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Facebook Litigation is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The Facebook IPO Litigation Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Facebook Litigation are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
High brand equity
– Facebook Litigation has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Facebook Litigation to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Leadership & Managing People industry
– The Facebook IPO Litigation firm has clearly differentiated products in the market place. This has enabled Facebook Litigation to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Facebook Litigation to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Facebook Litigation has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study The Facebook IPO Litigation - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Facebook Litigation is one of the leading recruiters in the industry. Managers in the The Facebook IPO Litigation are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Facebook Litigation
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Facebook Litigation does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses The Facebook IPO Litigation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Facebook IPO Litigation are -
High bargaining power of channel partners
– Because of the regulatory requirements, Lena G. Goldberg, Annelena Lobb suggests that, Facebook Litigation is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study The Facebook IPO Litigation, is just above the industry average. Facebook Litigation needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Capital Spending Reduction
– Even during the low interest decade, Facebook Litigation has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Lack of clear differentiation of Facebook Litigation products
– To increase the profitability and margins on the products, Facebook Litigation needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The Facebook IPO Litigation, it seems that the employees of Facebook Litigation don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Workers concerns about automation
– As automation is fast increasing in the segment, Facebook Litigation needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Low market penetration in new markets
– Outside its home market of Facebook Litigation, firm in the HBR case study The Facebook IPO Litigation needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Facebook Litigation has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - The Facebook IPO Litigation should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, Facebook Litigation has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Facebook Litigation even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Increasing silos among functional specialists
– The organizational structure of Facebook Litigation is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Facebook Litigation needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Facebook Litigation to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study The Facebook IPO Litigation, in the dynamic environment Facebook Litigation has struggled to respond to the nimble upstart competition. Facebook Litigation has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities The Facebook IPO Litigation | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study The Facebook IPO Litigation are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Facebook Litigation is facing challenges because of the dominance of functional experts in the organization. The Facebook IPO Litigation case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Using analytics as competitive advantage
– Facebook Litigation has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study The Facebook IPO Litigation - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Facebook Litigation to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Facebook Litigation to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Facebook Litigation to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Facebook Litigation can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Facebook Litigation in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Facebook Litigation in the consumer business. Now Facebook Litigation can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Facebook Litigation to increase its market reach. Facebook Litigation will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Facebook Litigation can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Facebook Litigation has opened avenues for new revenue streams for the organization in the industry. This can help Facebook Litigation to build a more holistic ecosystem as suggested in the The Facebook IPO Litigation case study. Facebook Litigation can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Facebook Litigation can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Learning at scale
– Online learning technologies has now opened space for Facebook Litigation to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Facebook Litigation can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, The Facebook IPO Litigation, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Facebook Litigation can use these opportunities to build new business models that can help the communities that Facebook Litigation operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Threats The Facebook IPO Litigation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Facebook IPO Litigation are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Facebook Litigation with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Facebook Litigation demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Facebook Litigation business can come under increasing regulations regarding data privacy, data security, etc.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Facebook Litigation can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study The Facebook IPO Litigation .
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Facebook Litigation in the Leadership & Managing People sector and impact the bottomline of the organization.
Increasing wage structure of Facebook Litigation
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Facebook Litigation.
Technology acceleration in Forth Industrial Revolution
– Facebook Litigation has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Facebook Litigation needs to keep up with the evolution of technology in the Leadership & Managing People sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Stagnating economy with rate increase
– Facebook Litigation can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
High dependence on third party suppliers
– Facebook Litigation high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Shortening product life cycle
– it is one of the major threat that Facebook Litigation is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Facebook Litigation can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of The Facebook IPO Litigation Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study The Facebook IPO Litigation needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study The Facebook IPO Litigation is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study The Facebook IPO Litigation is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of The Facebook IPO Litigation is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Facebook Litigation needs to make to build a sustainable competitive advantage.
