Facebook, Inc.: A Look at Corporate Governance SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Facebook, Inc.: A Look at Corporate Governance
This case examines Facebook's corporate governance by reviewing information in the company's proxy statement. Students become familiar with the nature and type of information in proxy statements. They also learn how to examine various facets of executive compensation and corporate governance such as the use of stock options and restricted stock to compensate executives, dual class share structures, board composition and characteristics, controlled companies, and classified boards.
Swot Analysis of "Facebook, Inc.: A Look at Corporate Governance" written by Justin J. Hopkins, Luann J. Lynch includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Proxy Governance facing as an external strategic factors. Some of the topics covered in Facebook, Inc.: A Look at Corporate Governance case study are - Strategic Management Strategies, and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Facebook, Inc.: A Look at Corporate Governance casestudy better are - – increasing household debt because of falling income levels, technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, increasing transportation and logistics costs,
geopolitical disruptions, increasing energy prices, etc
Introduction to SWOT Analysis of Facebook, Inc.: A Look at Corporate Governance
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Facebook, Inc.: A Look at Corporate Governance case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Proxy Governance, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Proxy Governance 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.: A Look at Corporate Governance can be done for the following purposes –
1. Strategic planning using facts provided in Facebook, Inc.: A Look at Corporate Governance case study
2. Improving business portfolio management of Proxy Governance
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 Proxy Governance
Strengths Facebook, Inc.: A Look at Corporate Governance | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Proxy Governance in Facebook, Inc.: A Look at Corporate Governance Harvard Business Review case study are -
Learning organization
- Proxy Governance 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 Proxy Governance is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Facebook, Inc.: A Look at Corporate Governance Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Proxy Governance has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Proxy Governance 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.
High switching costs
– The high switching costs that Proxy Governance 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.
Strong track record of project management
– Proxy Governance is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Proxy Governance in the sector have low bargaining power. Facebook, Inc.: A Look at Corporate Governance has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Proxy Governance to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Proxy Governance digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Proxy Governance has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Diverse revenue streams
– Proxy Governance is present in almost all the verticals within the industry. This has provided firm in Facebook, Inc.: A Look at Corporate Governance 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.
High brand equity
– Proxy Governance has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Proxy Governance to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Finance & Accounting field
– Proxy Governance is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Proxy Governance in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Proxy Governance has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Facebook, Inc.: A Look at Corporate Governance 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.
Ability to recruit top talent
– Proxy Governance is one of the leading recruiters in the industry. Managers in the Facebook, Inc.: A Look at Corporate Governance are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Finance & Accounting industry
– Facebook, Inc.: A Look at Corporate Governance firm has clearly differentiated products in the market place. This has enabled Proxy Governance to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Proxy Governance to invest into research and development (R&D) and innovation.
Weaknesses Facebook, Inc.: A Look at Corporate Governance | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Facebook, Inc.: A Look at Corporate Governance are -
Products dominated business model
– Even though Proxy Governance 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.: A Look at Corporate Governance should strive to include more intangible value offerings along with its core products and services.
No frontier risks strategy
– After analyzing the HBR case study Facebook, Inc.: A Look at Corporate Governance, it seems that company is thinking about the frontier risks that can impact Finance & Accounting strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High operating costs
– Compare to the competitors, firm in the HBR case study Facebook, Inc.: A Look at Corporate Governance 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 Proxy Governance 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Facebook, Inc.: A Look at Corporate Governance HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Proxy Governance has relatively successful track record of launching new products.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Facebook, Inc.: A Look at Corporate Governance, it seems that the employees of Proxy Governance 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Proxy Governance is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Facebook, Inc.: A Look at Corporate Governance can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Justin J. Hopkins, Luann J. Lynch suggests that, Proxy Governance 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 Facebook, Inc.: A Look at Corporate Governance, is just above the industry average. Proxy Governance 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.
Skills based hiring
– The stress on hiring functional specialists at Proxy Governance has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
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 Proxy Governance supply chain. Even after few cautionary changes mentioned in the HBR case study - Facebook, Inc.: A Look at Corporate Governance, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Proxy Governance vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Proxy Governance products
– To increase the profitability and margins on the products, Proxy Governance needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Facebook, Inc.: A Look at Corporate Governance | 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.: A Look at Corporate Governance are -
Developing new processes and practices
– Proxy Governance can develop new processes and procedures in Finance & Accounting industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Proxy Governance in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Proxy Governance to increase its market reach. Proxy Governance 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Proxy Governance 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.
Using analytics as competitive advantage
– Proxy Governance 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.: A Look at Corporate Governance - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Proxy Governance to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Proxy Governance 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.
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. Proxy Governance can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Proxy Governance in the consumer business. Now Proxy Governance can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Proxy Governance has opened avenues for new revenue streams for the organization in the industry. This can help Proxy Governance to build a more holistic ecosystem as suggested in the Facebook, Inc.: A Look at Corporate Governance case study. Proxy Governance 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, Proxy Governance is facing challenges because of the dominance of functional experts in the organization. Facebook, Inc.: A Look at Corporate Governance 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.
Loyalty marketing
– Proxy Governance has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Proxy Governance can use these opportunities to build new business models that can help the communities that Proxy Governance operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Buying journey improvements
– Proxy Governance can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Facebook, Inc.: A Look at Corporate Governance 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.
Threats Facebook, Inc.: A Look at Corporate Governance 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.: A Look at Corporate Governance are -
Stagnating economy with rate increase
– Proxy Governance 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
– Proxy Governance 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.
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.
Consumer confidence and its impact on Proxy Governance 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.
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. Proxy Governance can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Proxy Governance 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.
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. Proxy Governance 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Proxy Governance 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 Facebook, Inc.: A Look at Corporate Governance .
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 Proxy Governance business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Proxy Governance has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Proxy Governance needs to keep up with the evolution of technology in the Finance & Accounting 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Proxy Governance with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Proxy Governance 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. Proxy Governance can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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 Proxy Governance in the Finance & Accounting sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Facebook, Inc.: A Look at Corporate Governance 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.: A Look at Corporate Governance 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.: A Look at Corporate Governance 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.: A Look at Corporate Governance 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.: A Look at Corporate Governance 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 Proxy Governance needs to make to build a sustainable competitive advantage.
