Case Study Description of Facebook's Free Basics: Free in India?
In February 2015, Facebook's Free Basics platform was launched in India by Internet.org, a partnership between Facebook and six mobile service and device companies. The platform was meant not only to enable Internet access on a smartphone but also to deliver low-cost Internet connectivity to the masses. Internet.org had already successfully launched Free Basics for a population of eight million people in nine countries across Asia, Africa, and South America. In India, however, the platform was not well received by a few eminent corporations and, more importantly, the Telecom Regulatory Authority of India. The launch of Free Basics stirred a nationwide debate about whether Internet.org was trying to control Internet services in India, creating an imbalance among the existing telecom service providers and causing a disproportionate development of business opportunities. Would Free Basics succeed in its goal, or would it be banned across India? Reema Khurana is affiliated with Institute of Management Technology, Ghaziabad.
Swot Analysis of "Facebook's Free Basics: Free in India?" written by Reema Khurana includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Basics Internet.org facing as an external strategic factors. Some of the topics covered in Facebook's Free Basics: Free in India? case study are - Strategic Management Strategies, Social platforms and Global Business.
Some of the macro environment factors that can be used to understand the Facebook's Free Basics: Free in India? casestudy better are - – geopolitical disruptions, increasing household debt because of falling income levels, increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, increasing commodity prices,
increasing energy prices, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Facebook's Free Basics: Free in India?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Facebook's Free Basics: Free in India? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Basics Internet.org, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Basics Internet.org 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's Free Basics: Free in India? can be done for the following purposes –
1. Strategic planning using facts provided in Facebook's Free Basics: Free in India? case study
2. Improving business portfolio management of Basics Internet.org
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Basics Internet.org
Strengths Facebook's Free Basics: Free in India? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Basics Internet.org in Facebook's Free Basics: Free in India? Harvard Business Review case study are -
Learning organization
- Basics Internet.org 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 Basics Internet.org is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Facebook's Free Basics: Free in India? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Global Business field
– Basics Internet.org 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 Basics Internet.org in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Basics Internet.org 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 Facebook's Free Basics: Free in India? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management
– Basics Internet.org is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Basics Internet.org is present in almost all the verticals within the industry. This has provided firm in Facebook's Free Basics: Free in India? 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.
Cross disciplinary teams
– Horizontal connected teams at the Basics Internet.org 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.
Organizational Resilience of Basics Internet.org
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Basics Internet.org does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Basics Internet.org in the sector have low bargaining power. Facebook's Free Basics: Free in India? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Basics Internet.org to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Basics Internet.org 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 Facebook's Free Basics: Free in India? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Basics Internet.org has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Facebook's Free Basics: Free in India? 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.
Innovation driven organization
– Basics Internet.org is one of the most innovative firm in sector. Manager in Facebook's Free Basics: Free in India? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Basics Internet.org 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 Reema Khurana 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.
Weaknesses Facebook's Free Basics: Free in India? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Facebook's Free Basics: Free in India? are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Facebook's Free Basics: Free in India?, it seems that the employees of Basics Internet.org 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.
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 Basics Internet.org supply chain. Even after few cautionary changes mentioned in the HBR case study - Facebook's Free Basics: Free in India?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Basics Internet.org vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Reema Khurana suggests that, Basics Internet.org 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.
Low market penetration in new markets
– Outside its home market of Basics Internet.org, firm in the HBR case study Facebook's Free Basics: Free in India? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Facebook's Free Basics: Free in India?, is just above the industry average. Basics Internet.org 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Facebook's Free Basics: Free in India?, in the dynamic environment Basics Internet.org has struggled to respond to the nimble upstart competition. Basics Internet.org has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the segment, Basics Internet.org 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.
No frontier risks strategy
– After analyzing the HBR case study Facebook's Free Basics: Free in India?, it seems that company is thinking about the frontier risks that can impact Global Business 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's Free Basics: Free in India? 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 Basics Internet.org 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Facebook's Free Basics: Free in India? 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 Basics Internet.org has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Basics Internet.org 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. Basics Internet.org 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.
Opportunities Facebook's Free Basics: Free in India? | 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's Free Basics: Free in India? are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Basics Internet.org 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, Facebook's Free Basics: Free in India?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Basics Internet.org can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Basics Internet.org 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.
Building a culture of innovation
– managers at Basics Internet.org 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 Global Business segment.
Using analytics as competitive advantage
– Basics Internet.org 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's Free Basics: Free in India? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Basics Internet.org to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Basics Internet.org is facing challenges because of the dominance of functional experts in the organization. Facebook's Free Basics: Free in India? 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Basics Internet.org in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Basics Internet.org has opened avenues for new revenue streams for the organization in the industry. This can help Basics Internet.org to build a more holistic ecosystem as suggested in the Facebook's Free Basics: Free in India? case study. Basics Internet.org can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Basics Internet.org to increase its market reach. Basics Internet.org 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.
Loyalty marketing
– Basics Internet.org 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.
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 Basics Internet.org in the consumer business. Now Basics Internet.org can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Basics Internet.org 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 Basics Internet.org to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Basics Internet.org 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's Free Basics: Free in India? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Facebook's Free Basics: Free in India? are -
Stagnating economy with rate increase
– Basics Internet.org 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.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Basics Internet.org.
Consumer confidence and its impact on Basics Internet.org 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.
Environmental challenges
– Basics Internet.org 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. Basics Internet.org can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Basics Internet.org 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's Free Basics: Free in India? .
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. Basics Internet.org needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
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.
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's Free Basics: Free in India?, Basics Internet.org may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
Regulatory challenges
– Basics Internet.org 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 Global Business industry regulations.
Technology acceleration in Forth Industrial Revolution
– Basics Internet.org has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Basics Internet.org needs to keep up with the evolution of technology in the Global Business 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.
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.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Basics Internet.org can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Basics Internet.org with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Facebook's Free Basics: Free in India? 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's Free Basics: Free in India? 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's Free Basics: Free in India? 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's Free Basics: Free in India? 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's Free Basics: Free in India? 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 Basics Internet.org needs to make to build a sustainable competitive advantage.
