Facebook (in 2013): Will Wall Street Hit the "Like" Button? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Facebook (in 2013): Will Wall Street Hit the "Like" Button?
The case opens with Sheryl Sandberg finding herself in the role of chief operating officer for Facebook alongside the 28 year-old Founder/CEO, Mark Zuckerberg. She just watched Zuckerberg deliver a keynote speech about the company's latest product, Graph Search, which empowers users to search the social network for specific information regarding their connections.
Swot Analysis of "Facebook (in 2013): Will Wall Street Hit the "Like" Button?" written by Frank T. Rothaermel, Seth Taylor includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Zuckerberg Facebook facing as an external strategic factors. Some of the topics covered in Facebook (in 2013): Will Wall Street Hit the "Like" Button? case study are - Strategic Management Strategies, Corporate governance, Entrepreneurship, Innovation, Internet, Leadership, Social platforms and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Facebook (in 2013): Will Wall Street Hit the "Like" Button? casestudy better are - – technology disruption, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, supply chains are disrupted by pandemic ,
competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, etc
Introduction to SWOT Analysis of Facebook (in 2013): Will Wall Street Hit the "Like" Button?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Facebook (in 2013): Will Wall Street Hit the "Like" Button? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Zuckerberg Facebook, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Zuckerberg Facebook 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 (in 2013): Will Wall Street Hit the "Like" Button? can be done for the following purposes –
1. Strategic planning using facts provided in Facebook (in 2013): Will Wall Street Hit the "Like" Button? case study
2. Improving business portfolio management of Zuckerberg Facebook
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Zuckerberg Facebook
Strengths Facebook (in 2013): Will Wall Street Hit the "Like" Button? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Zuckerberg Facebook in Facebook (in 2013): Will Wall Street Hit the "Like" Button? Harvard Business Review case study are -
High brand equity
– Zuckerberg Facebook has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Zuckerberg Facebook to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Zuckerberg Facebook in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Zuckerberg Facebook 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
– Zuckerberg Facebook is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Zuckerberg Facebook is one of the leading recruiters in the industry. Managers in the Facebook (in 2013): Will Wall Street Hit the "Like" Button? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Zuckerberg Facebook 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 Zuckerberg Facebook is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Facebook (in 2013): Will Wall Street Hit the "Like" Button? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Zuckerberg Facebook has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Facebook (in 2013): Will Wall Street Hit the "Like" Button? 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
– Zuckerberg Facebook is one of the most innovative firm in sector. Manager in Facebook (in 2013): Will Wall Street Hit the "Like" Button? 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
– Zuckerberg Facebook 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 (in 2013): Will Wall Street Hit the "Like" Button? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Facebook (in 2013): Will Wall Street Hit the "Like" Button? firm has clearly differentiated products in the market place. This has enabled Zuckerberg Facebook to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Zuckerberg Facebook to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Zuckerberg Facebook has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Zuckerberg Facebook 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.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Zuckerberg Facebook digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Zuckerberg Facebook 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.
Weaknesses Facebook (in 2013): Will Wall Street Hit the "Like" Button? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Facebook (in 2013): Will Wall Street Hit the "Like" Button? are -
Low market penetration in new markets
– Outside its home market of Zuckerberg Facebook, firm in the HBR case study Facebook (in 2013): Will Wall Street Hit the "Like" Button? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Zuckerberg Facebook has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Facebook (in 2013): Will Wall Street Hit the "Like" Button?, is just above the industry average. Zuckerberg Facebook 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.
Interest costs
– Compare to the competition, Zuckerberg Facebook 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.
Capital Spending Reduction
– Even during the low interest decade, Zuckerberg Facebook 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Frank T. Rothaermel, Seth Taylor suggests that, Zuckerberg Facebook 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.
Aligning sales with marketing
– It come across in the case study Facebook (in 2013): Will Wall Street Hit the "Like" Button? 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 (in 2013): Will Wall Street Hit the "Like" Button? can leverage the sales team experience to cultivate customer relationships as Zuckerberg Facebook is planning to shift buying processes online.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Facebook (in 2013): Will Wall Street Hit the "Like" Button? 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 Zuckerberg Facebook has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Zuckerberg Facebook is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Zuckerberg Facebook needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Zuckerberg Facebook to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Facebook (in 2013): Will Wall Street Hit the "Like" Button?, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship 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.
Skills based hiring
– The stress on hiring functional specialists at Zuckerberg Facebook 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.
Opportunities Facebook (in 2013): Will Wall Street Hit the "Like" Button? | 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 (in 2013): Will Wall Street Hit the "Like" Button? are -
Developing new processes and practices
– Zuckerberg Facebook can develop new processes and procedures in Innovation & Entrepreneurship 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.
Better consumer reach
– The expansion of the 5G network will help Zuckerberg Facebook to increase its market reach. Zuckerberg Facebook 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.
Learning at scale
– Online learning technologies has now opened space for Zuckerberg Facebook 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.
Manufacturing automation
– Zuckerberg Facebook can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Zuckerberg Facebook is facing challenges because of the dominance of functional experts in the organization. Facebook (in 2013): Will Wall Street Hit the "Like" Button? 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
– Zuckerberg Facebook 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Zuckerberg Facebook can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Zuckerberg Facebook 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Zuckerberg Facebook 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. Zuckerberg Facebook 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Zuckerberg Facebook 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.
Creating value in data economy
– The success of analytics program of Zuckerberg Facebook has opened avenues for new revenue streams for the organization in the industry. This can help Zuckerberg Facebook to build a more holistic ecosystem as suggested in the Facebook (in 2013): Will Wall Street Hit the "Like" Button? case study. Zuckerberg Facebook can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Zuckerberg Facebook can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Zuckerberg Facebook 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.
Threats Facebook (in 2013): Will Wall Street Hit the "Like" Button? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Facebook (in 2013): Will Wall Street Hit the "Like" Button? are -
Stagnating economy with rate increase
– Zuckerberg Facebook 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 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. Zuckerberg Facebook needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Regulatory challenges
– Zuckerberg Facebook 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 Innovation & Entrepreneurship industry regulations.
Environmental challenges
– Zuckerberg Facebook 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. Zuckerberg Facebook can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Zuckerberg Facebook with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 (in 2013): Will Wall Street Hit the "Like" Button?, Zuckerberg Facebook may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
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 Zuckerberg Facebook business can come under increasing regulations regarding data privacy, data security, etc.
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Zuckerberg Facebook can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Zuckerberg Facebook is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Zuckerberg Facebook 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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Zuckerberg Facebook in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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.
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.
Weighted SWOT Analysis of Facebook (in 2013): Will Wall Street Hit the "Like" Button? 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 (in 2013): Will Wall Street Hit the "Like" Button? 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 (in 2013): Will Wall Street Hit the "Like" Button? 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 (in 2013): Will Wall Street Hit the "Like" Button? 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 (in 2013): Will Wall Street Hit the "Like" Button? 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 Zuckerberg Facebook needs to make to build a sustainable competitive advantage.
