Facebook Porters Five Forces Analysis 2019
Prudence is part of our roster of professional writers with a regular contribution to our business strategy sample collection. As a Market Research Analyst by profession, Prudence brings her training in business analysis as well as real life expertise from the world of professional business consulting, to our case study solutions. The result is a robust collection of superb premium business strategy case studies tailored for student revision, faculty and researchers.
Latest posts by Prudence K. Magezi(see all)
Facebook boasts some incredible statistics that highlight why it has been very successful. A Porters five forces analysis of Facebook shows that the California based social network wields immense power over vertical five forces primarily Facebook buyers and suppliers whose bargaining power is low or moderate at best. This is predominantly because Facebook has achieved strong network effects from economies of scale and scope, which have ensured the social media network continues to enjoy high switching costs and strong lock-in effects over users.
But while these factors have ensured Facebook’s dominance over rivals in the social media industry, the company remains vulnerable to the 3 horizontal forces of competition namely substitutes, new player entry and intensifying rivalry between current players. As a Facebook porters five forces analysis revealed, the social media industry is highly competitive with a rising number of substitute services such as Reddit, Digg, EyeEm, Next Door, or Family Wall, many of which can offer similar performance benefits such as sharing photos, videos and messages even though they are not direct competitors of Facebook.
So though Facebook has created barriers that currently protect its market share, it remains vulnerable to new players who could take advantage of its privacy issues to exacerbate an exodus of more than 3 million teens that’s already underway in the core markets of the UK and US. It is already locked out of the world’s most populous country, a situation exacerbated by China-USA trade war tensions. So while Facebook still wields power over the forces of vertical competition (power of buyers and suppliers), the horizontal forces of competition (competition from rivals, substitutes and new entry) exert enough pressure on the industry to limit profitability and further dominance of Facebook in the future.
HARVARD
Magezi, K. P., & Kush, K. Jonathan (2019) "Facebook Porters Five Forces Analysis 2019" 123 Writing [Online] at https://www.123writing.com/sample/facebook-porters-five-forces-analysis-2019
Magezi, K. P., & Kush, K. Jonathan (2019) "Facebook Porters Five Forces Analysis 2019" 123 Writing [Online] at https://www.123writing.com/sample/facebook-porters-five-forces-analysis-2019
APA
Magezi, K. P., & Kush, K. Jonathan. 2019. Facebook Porters Five Forces Analysis 2019. 123 Writing. Retrieved from https://www.123writing.com/sample/facebook-porters-five-forces-analysis-2019
MLA
.........................
CHICAGO
........................
Facebook Strategy Case Study
Key Learning Outcomes
By the end of the case, students should be able to:
- Use Porters five forces model to analyse an industry on the basis of the five competitive forces.
- Analyse the global social networking industry and how the five forces have affected Facebook and rival firms and the impact on industry structure, attractiveness, and profitability.
- Understand how Facebook has managed to defend against intense competition and the strategies it uses to create 'blue oceans' that are defensible, helping it capture market share and maintain competitive advantage.
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). The social media giant also recorded $15.934billion profit in 2017, up from $10.217billion in 2016 (Statista 2018d).
In the following sections, we examine Facebook Porters five forces to try and understand how even though Facebook has created barriers that currently protect its market share, it still remains vulnerable to new players who could take advantage of its privacy issues to exacerbate an exodus of more than 3 million teens that’s already underway in the core markets of the UK and US. It is already locked out of the world’s most populous country, a situation exacerbated by China-USA trade war tensions. So while Facebook still wields power over the forces of vertical competition (power of buyers and suppliers), the horizontal forces of competition (competition from rivals, substitutes and new entry) exert enough pressure on the industry to limit profitability and further dominance of Facebook in the future.
Services We are Offering
We are more than a free study and revision tool.
We also provide
on demand research and custom writing services.
123 Writing is the #1 exam revision and assignment study platform in the UK.
Get unlimited access to answered student essays, assignments, past exam questions and sample coursework written by qualified academic writers & tutors.
Our Standard subscription typically retails for £299.88 a year.
Today, you can join at 80% discount.
Here’s a full breakdown of everything you get as a Standard or Premium subscriber...
» Get access to our database of more than 5,770 answered premium strategy case studies
Get unlimited access to a robust database of premium business strategy case studies including more than 5,770 fully answered sample strategy frameworks and tools such as pestle, value chain, value matrix, porters five forces, Ansoff’s matrix, etc., authoritatively written and tailored for student revision, assignment preparation and transformative business research. Our strategy case studies are especially suited for university students wishing to apply strategic frameworks to real-world situations, company cases or simulations. All our strategy case studies come with teaching notes and learning outcomes, making them effective as coursework revision, and essay study help tools.
» Free access to past exam & assignment answers
Revise and prepare for exams and coursework with our fully answered exam notes and sample assignment papers. Furthermore, get quick on-demand answers to past exam question and assignment questions from our writers. Exam answer notes come with personalized lesson plans, and detailed study notes complete with detailed explanations of each answer, for maximum exam revision and assignment preparation. This tool is perfect for readers struggling with exam preparation & assignment study.
» Get extra assignment related help from our writers & tutors
Achieve high grades with a little extra assignment related support. Get extra help with your essays, assignments and general coursework, from our knowledgeable writers and tutors who will provide extra assistance when required for all academic related tasks including proofreading, grammar editing & correction, citations, referencing, etc. at no extra cost for standard and premium subscribers. All our standard and premium subscribers receive free proofreading services, which will include a check for punctuation, grammar, sentence formation, typographical errors, formatting, errors and other consistency issues (broadly).
» Get free assignment & essay writing help worth up to 7K words
Commission an on-demand essay, or assignment title from our knowledgeable writers and tutors on any subject matter. Get up to 7,000* words in on-demand custom assignment help from our writers who can assist with difficult topic in classical business literature. (* 7,000 free word credit exclusive to premium members).
» Fast & speedy answers to on-demand case solutions & assignment questions
Make use of your available free word credit (up to *7,000words) to commission on-demand custom case solutions, case study assignments and receive fast & speedy personalised answers. Receive timely and fast plagiarism-free answers to assignment questions or case solutions in as little as 1-2 business working days. Topics include Strategic Management, Marketing, Business Management, Economics, Operations Management, Organization Studies, International Business & Management, Human Resource Management and more. (* Exclusive to premium members).
» Get exclusive Q&A sessions with our subject matter writers
Ask our qualified, vetted and knowledgeable writers up to *12 essay, assignment and coursework related questions annually and receive accurate, clear, and detailed answers including step-by-step explanations briefs that are easy to follow. (*Exclusive to premium members).
» Free access to test bank questions & answers, study notes and practice quizzes
Test your knowledge on any subject with our quick quizzes and test banks for maximum retention after revision and studying. Test Bank contains questions in a variety of formats including multiple choice, true/false, short answer, and essay questions.
» Free access to video tutorials & study packs
Get free access to exclusive video tutorials to common subject topics. Our subject matter video tutorials, study notes and study packs have been created to help students learn and understand basic course module materials, as well as prepare students for their coursework assignment questions, essays and exams. Our video tutorials, study notes and study packs can be organized by topic, textbook or Question &Answer.
» Access to textbook chapter reviews and answer solutions
Get access to chapter reviews of popular business books, broken down in easy-to-understand simple concepts with simplified English. If English is not your first language, this service will make revising for essay assignments and exams as easy as 123 (Exclusive to premium members).
