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 - – increasing commodity prices, central banks are concerned over increasing inflation, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices,
challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, 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.
Analytics focus
– Zuckerberg Facebook 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 Frank T. Rothaermel, Seth Taylor 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.
Operational resilience
– The operational resilience strategy in the Facebook (in 2013): Will Wall Street Hit the "Like" Button? 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.
Ability to lead change in Innovation & Entrepreneurship field
– Zuckerberg Facebook 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 Zuckerberg Facebook in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Zuckerberg Facebook
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Zuckerberg Facebook does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
Low bargaining power of suppliers
– Suppliers of Zuckerberg Facebook in the sector have low bargaining power. Facebook (in 2013): Will Wall Street Hit the "Like" Button? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Zuckerberg Facebook to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
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.
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.
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.
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 -
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Zuckerberg Facebook is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Facebook (in 2013): Will Wall Street Hit the "Like" Button? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Zuckerberg Facebook products
– To increase the profitability and margins on the products, Zuckerberg Facebook needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the segment, Zuckerberg Facebook 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.
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.
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.
Slow to strategic competitive environment developments
– As Facebook (in 2013): Will Wall Street Hit the "Like" Button? HBR case study mentions - Zuckerberg Facebook takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Need for greater diversity
– Zuckerberg Facebook 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.
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.
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.
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 Zuckerberg Facebook supply chain. Even after few cautionary changes mentioned in the HBR case study - Facebook (in 2013): Will Wall Street Hit the "Like" Button?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Zuckerberg Facebook vulnerable to further global disruptions in South East Asia.
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 -
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Zuckerberg Facebook 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 Zuckerberg Facebook to hire the very best people irrespective of their geographical location.
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 Zuckerberg Facebook in the consumer business. Now Zuckerberg Facebook can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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.
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.
Using analytics as competitive advantage
– Zuckerberg Facebook 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 (in 2013): Will Wall Street Hit the "Like" Button? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Zuckerberg Facebook to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
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.
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.
Buying journey improvements
– Zuckerberg Facebook can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Facebook (in 2013): Will Wall Street Hit the "Like" Button? 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Zuckerberg Facebook in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Zuckerberg Facebook can use these opportunities to build new business models that can help the communities that Zuckerberg Facebook operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
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 -
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.
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.
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.
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 .
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 Zuckerberg Facebook in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Zuckerberg Facebook 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.
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.
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.
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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Zuckerberg Facebook 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 (in 2013): Will Wall Street Hit the "Like" Button? .
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.
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.
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.