Facebook SWOT Matrix
Facebook SWOT Matrix
Facebook is one of the biggest players in the online advertising market as well as the social media market. Some of its strengths include high revenues, strong brand image, and large customer base. More importantly, Facebook has been translated into more than 70 languages. Facebook has strong relationships with other companies like Microsoft and Amazon, which has helped develop profitable business ventures. Facebook can be used easily; thus, has been able to gain as well as retain subscribers (Clark et al., 2008). Its large customer base is attributed to the company’s strategy that allows the users to register for free.
Facebook has numerous weaknesses; for instance, its services and products can be imitated easily. Besides that, the company suffers from low business diversification and its source of income (online advertising) negatively affects the user experience. The low diversification aspect is attributed to the fact that most of Facebook’s incomes are sourced from its social networking website and associated mobile applications. The never-ending updates sometimes frustrate the users.
There are numerous opportunities that Facebook could access to expand its social media business globally. For instance, the company could diversify beyond its core advertising as well as social media business. Further diversification could help reduce Facebook’s business risk. Another opportunity for Facebook is finding ways to innovate more products, which are complementary to its mobile apps and social networking website. Revenues and membership could be enhanced by market penetration as well as development.
One of the major threats is imitation bearing in mind that many companies can develop mobile apps and social networking websites almost the same as that of Facebook. Another threat is the increased risks of cybercrime, which has somewhat reduced the attractiveness of Facebook (Young, 2017). Recently, it was revealed that a data analytics firm known as Cambridge Analytica (CA) had extracted data from approximately 50 million Facebook accounts. Considering that Facebook was developed to work at the individual level, it has become apparent that user accounts are being exploited for political purposes. The fact that Cambridge Analytica harvested data from millions of users in Facebook, devoid of the users’ permission, it is clear that cybercrime is a major threat to Facebook (Romano, 2018).
|Strengths (S)||Opportunities (O)|
|Translated to various languagesIncome sourced from different data, games, ads and many othersIncreased number of usersSustainable competitive advantageContinuous system upgrades||Online ad revenue is increasing substantiallyCompetitors still struggling Increasing e-commerceMarket penetration and development|
|Weaknesses (W)||Threats (T)|
|Problems related to securing the platformMonetization challengesUsers frustrated by continuous upgradesIncreased need for data storage low diversification||Increased demandIncreased competitionLegal issues related to privacy issuesCybercrime (Fair, 2012).|
OS ‘Maxi-Maxi’ Strategy
- Facebook earns from retail sales by partnering with Amazon and eBay (O3, S2, and S4)
- Increase advertisements globally (O1 and S1)
TS ‘Maxi-Mini’ Strategy
- Eliminating competition threat by developing key industry partners (T2)
- Deal with challenges through system upgrades (T1 and S5)
- Solidifying market position (T6 and S5)
- Engaging users through continuous innovation (S3 and T3)
- Addressing privacy and legal concerns (T3, T4 and S5)
WO ‘Mini-Maxi ‘Strategy
- Capitalizing on the mobile advertisement revenue opportunities and streams (O1 and W2)
- Espousing the ecommerce model (O3 and w2)
- Partnering with other firms to maintain platform and address storage and security issues (O4, O2, W1, W4 and W5)
- Concentrate on revenue development (O1, O3 and W5)
TW ‘Mini-Mini’ Strategy
- Reduce the number of account registration (T1, W1, and W4,)
- Limit innovation or system changes and address privacy-related issues (T3, T4 and W3)
- Grow mobile in order to retain advertisers (T2 and W2)
Clark, W., Loksha, I. & Ornelas-Kuh, M., 2008. Facbook and the Emerging Social Networking Industry. [Online] Available at: https://www.mcafee.cc/Classes/BEM106/Papers/2008/Facebook.pdf [Accessed 4 April 2018].
Fair, L., 2012. Facebook may be in the lead, but there’s a storm in the forecast. Research Paper. Sydney, NS: Cape Breton University.
Romano, A., 2018. The Facebook data breach wasn’t a hack. It was a wake-up call. [Online] Available at: https://www.vox.com/2018/3/20/17138756/facebook-data-breach-cambridge-analytica-explained [Accessed 4 April 2018].
Young, J., 2017. Facebook Inc. SWOT Analysis & Recommendations. [Online] Available at: http://panmore.com/facebook-inc-swot-analysis-recommendations [Accessed 4 April 2018].