Facebook Inc is an American online social media and social networking service company with over 2billion monthly users. The social media industry has been at the forefront of privacy and data safety throughout much of 2018.
Using Pestel, this report examines the various macro factors that are shaping the social networking industry and the growth of Facebook including data safety regulations, the Cambridge Analytica scandal, emergence of 5G network technology, and Beijing’s decision to block Facebook in China, all affecting the business environment of Facebook.
Some of these external factors such as the rise of 5G technologies are market opportunities while others like the Cambridge Analytica scandal are threats. For Facebook, the key is in identifying key drivers of change that are market opportunities while mitigating against those that present a serious threat to its business model as revealed in this Facebook external environment analysis.
Facebook Strategy Case Study
Key Learning Outcomes
- Understand the broad macro-environment of Facebook and the social networking sector in terms of political, economic, social, technological, environmental and legal factors (PESTEL/PEST/STEEPLE).
- Use our swot analysis example to gain an overall understanding of Facebook's strengths and weaknesses and strategic options arising from the opportunities and threats that have been identified from the Pestle analysis example on it's business environment.
- Apply strategy business models and frameworks such as Pestle/Pest/Steeple, Swot etc to real company cases.
Analyse the macro and micro environment of Facebook and the social media industry using Pestel and the impact of external factors followed by a Facebook Swot and Porters five forces analysis.
1.0 INTRODUCTION
Facebook is an American social media and social networking company with its headquarters in Menlo park, California, United States. It was founded in 2004 by Mark Zuckerberg and co-founders Eduardo Saverin, Andrew McCollum, Dustin Moskovitz and Chris Hughes (Barr 2018).
Subsidiaries include Instagram, WhatsApp, Oculus VR, Onavo, LiveRail, among others. In 2017, Facebook recorded annual revenue of $40.65 billion, up from $27.64billion in 2016 according to Statista (2018c) with profits of $15.934billion profit in 2017, up from $10.217billion in 2016 (Statista 2018d).
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