Facebook, Inc.: The Initial Public Offering SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Facebook, Inc.: The Initial Public Offering
It was May 16, 2012, and the highly anticipated pricing of Facebook Inc.'s initial public offering (IPO) was underway. An analyst at CXTechnology Fund was preparing to speak to the lead underwriter about his final interest in the deal. The analyst had reviewed Facebook's phenomenal growth, its profitable business model and the competitive landscape for the social networking industry. The IPO appeared to be oversubscribed with heavy interest from institutional and retail investors alike, but the valuation seemed expensive, even by technology standards. The analyst needed to make a decision on whether to buy shares in the IPO or not. A spreadsheet for students is available, product 7B12N031.
Authors :: Deborah Compeau, Craig Dunbar, Michael R King, Ken Mark
Swot Analysis of "Facebook, Inc.: The Initial Public Offering" written by Deborah Compeau, Craig Dunbar, Michael R King, Ken Mark includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Analyst Ipo facing as an external strategic factors. Some of the topics covered in Facebook, Inc.: The Initial Public Offering case study are - Strategic Management Strategies, and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Facebook, Inc.: The Initial Public Offering casestudy better are - – increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, etc
Introduction to SWOT Analysis of Facebook, Inc.: The Initial Public Offering
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Facebook, Inc.: The Initial Public Offering case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Analyst Ipo, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Analyst Ipo 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 Facebook, Inc.: The Initial Public Offering can be done for the following purposes –
1. Strategic planning using facts provided in Facebook, Inc.: The Initial Public Offering case study
2. Improving business portfolio management of Analyst Ipo
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Analyst Ipo
Strengths Facebook, Inc.: The Initial Public Offering | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Analyst Ipo in Facebook, Inc.: The Initial Public Offering Harvard Business Review case study are -
Innovation driven organization
– Analyst Ipo is one of the most innovative firm in sector. Manager in Facebook, Inc.: The Initial Public Offering Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Analyst Ipo in the sector have low bargaining power. Facebook, Inc.: The Initial Public Offering has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Analyst Ipo to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Analyst Ipo has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Ability to recruit top talent
– Analyst Ipo is one of the leading recruiters in the industry. Managers in the Facebook, Inc.: The Initial Public Offering are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Analyst Ipo has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Analyst Ipo to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Analyst Ipo is present in almost all the verticals within the industry. This has provided firm in Facebook, Inc.: The Initial Public Offering case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Operational resilience
– The operational resilience strategy in the Facebook, Inc.: The Initial Public Offering Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Organizational Resilience of Analyst Ipo
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Analyst Ipo does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Analyst Ipo has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Facebook, Inc.: The Initial Public Offering Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Analytics focus
– Analyst Ipo 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 Deborah Compeau, Craig Dunbar, Michael R King, Ken Mark 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.
Successful track record of launching new products
– Analyst Ipo has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Analyst Ipo 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.
Cross disciplinary teams
– Horizontal connected teams at the Analyst Ipo 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.
Weaknesses Facebook, Inc.: The Initial Public Offering | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Facebook, Inc.: The Initial Public Offering are -
Aligning sales with marketing
– It come across in the case study Facebook, Inc.: The Initial Public Offering that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Facebook, Inc.: The Initial Public Offering can leverage the sales team experience to cultivate customer relationships as Analyst Ipo is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Analyst Ipo 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Facebook, Inc.: The Initial Public Offering, in the dynamic environment Analyst Ipo has struggled to respond to the nimble upstart competition. Analyst Ipo has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Analyst Ipo has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Facebook, Inc.: The Initial Public Offering, is just above the industry average. Analyst Ipo 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.
Low market penetration in new markets
– Outside its home market of Analyst Ipo, firm in the HBR case study Facebook, Inc.: The Initial Public Offering needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Analyst Ipo supply chain. Even after few cautionary changes mentioned in the HBR case study - Facebook, Inc.: The Initial Public Offering, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Analyst Ipo vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Analyst Ipo 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 - Facebook, Inc.: The Initial Public Offering should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, firm in the HBR case study Facebook, Inc.: The Initial Public Offering has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Analyst Ipo 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Analyst Ipo is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Analyst Ipo needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Analyst Ipo to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Analyst Ipo has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Opportunities Facebook, Inc.: The Initial Public Offering | 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 Facebook, Inc.: The Initial Public Offering are -
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Analyst Ipo to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Better consumer reach
– The expansion of the 5G network will help Analyst Ipo to increase its market reach. Analyst Ipo 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.
Buying journey improvements
– Analyst Ipo can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Facebook, Inc.: The Initial Public Offering suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Using analytics as competitive advantage
– Analyst Ipo 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 Facebook, Inc.: The Initial Public Offering - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Analyst Ipo to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Analyst Ipo can use these opportunities to build new business models that can help the communities that Analyst Ipo operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Analyst Ipo can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Analyst Ipo 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.
Building a culture of innovation
– managers at Analyst Ipo can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Finance & Accounting segment.
Creating value in data economy
– The success of analytics program of Analyst Ipo has opened avenues for new revenue streams for the organization in the industry. This can help Analyst Ipo to build a more holistic ecosystem as suggested in the Facebook, Inc.: The Initial Public Offering case study. Analyst Ipo can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Analyst Ipo is facing challenges because of the dominance of functional experts in the organization. Facebook, Inc.: The Initial Public Offering 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Analyst Ipo 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Analyst Ipo can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Analyst Ipo can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Analyst Ipo can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Facebook, Inc.: The Initial Public Offering External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Facebook, Inc.: The Initial Public Offering are -
Consumer confidence and its impact on Analyst Ipo 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.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Analyst Ipo needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Analyst Ipo will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Facebook, Inc.: The Initial Public Offering, Analyst Ipo may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Analyst Ipo can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Analyst Ipo needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Analyst Ipo can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Analyst Ipo in the Finance & Accounting industry. The Finance & Accounting industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Analyst Ipo with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Analyst Ipo needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Finance & Accounting industry regulations.
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.
High dependence on third party suppliers
– Analyst Ipo 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.
Increasing wage structure of Analyst Ipo
– 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 Analyst Ipo.
Weighted SWOT Analysis of Facebook, Inc.: The Initial Public Offering 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 Facebook, Inc.: The Initial Public Offering 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 Facebook, Inc.: The Initial Public Offering 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 Facebook, Inc.: The Initial Public Offering 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 Facebook, Inc.: The Initial Public Offering 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 Analyst Ipo needs to make to build a sustainable competitive advantage.
