Among social media companies, Facebook stands out for its longevity and ability to monetize the significant data collected from its users. Facebook is currently the largest social media brand with a significant market share among young and middle-aged people. Facebook has several strengths that cement its strong industry position; one of these strengths is a strong brand image; over one billion people use Facebook’s services all over the world daily, this translates into a strong brand image. Facebook has been able to venture into greater profits because of the expansion of the brand image.
Another key strength of is its enormous user base of more than 1.8 billion monthly active users; this makes the company the undisputed leader in social media and the preferred choice for advertisers. The significant number of monthly active users means Facebook is in a position to make billions in profits that it reinvests to improve its market position further and buy out the competition.
Despite the fact, Facebook is the most successful company at engaging users and monitoring the data provided by users, several weaknesses, if not adequately addressed could signal the end of the enterprise. One of the weaknesses is low diversification of their core business. Facebook makes the bulk of its money from advertising on its social network site; this makes it overly dependent on the social networking site and vulnerable to changes in consumer preferences. The increase in popularity of applications such as Snapchat show that consumers are hungry for a different form of engagement; if Facebook fails to diversify, it will experience loss of market share to competitors (Malhotra, Birks, and Wills, 2013).
Another weakness is that Facebook is a large company inadequate to compete with more nimble competitors who are capable of responding to consumer changes. In recent, years, Facebook has taken to buying rival companies such as Instagram and WhatsApp instead of innovating; Facebook’s lack of innovation is a major weakness that the company should address.
As the biggest social media company in the world, there are plenty of opportunities for Facebook to improve its market position and innovate. One of the actions for Facebook is connecting the world’s last batch of nations and people not connected to the internet; among western countries, Facebook has achieved near market saturation, growth for the company now lies in connecting the world’s unconnected people. Facebook has several projects aimed at connecting the unconnected world including a solar-powered plane that beams the internet to unconnected towns. Another opportunity for Facebook is market diversification. Facebook is currently very profitable, and it generates considerable volumes of cash; the company should use its dominant market position to innovate and provide new experiences that the market desires and appreciates, this ensures the longevity of the enterprise.
Fierce competition is one pertinent threat that Facebook faces. Companies such as Google have the resources, expertise, and initiative necessary to create a viable rival product that can take away market share from Facebook. Intense competition means that Facebook should always be on its toes or risk ceding market share to more nimble competitors such as Snapchat. Another threat that Facebook faces is market saturation in the United States of America and other western countries, the company risks becoming complacent and basking in its significant market share. It is necessary for Facebook to continue innovating so that it remains relevant and generates value for consumers (Babin & Zikmund, 2015).
Several technological factors affect the operation of Facebook. One of the significant technological trends is the growth of mobile computing through devices such as smartphones, smartwatches, and an increasing array of connected devices. The increase in mobile computing presents opportunities and threats for Facebook, on the one hand, it presents the company with new ways of creating value for consumers while on the contrary mobile computing gives other companies the opportunity to outdo Facebook (Facebook).
In its last financial report, Facebook reported over 1.8 billion monthly active users, which represents a seventeen percent increase from 2016. The Majority of Facebook’s users are adults between the ages of 25 to 39; this makes Facebook a coveted advertising platform by advertisers. Facebook’s financial report also shows that 76% of its female users and 66% of its male users are daily active users (Facebook).
The demographic data about its users that Facebook provides shows that it attracts a coveted segment of the population; adults between the ages of 25 and 39 are more likely to have disposable income; this makes Facebook the chosen advertising platform for advertisers. The trends also show that Facebook is failing at attracting a younger crop of users below the age of 25.
Babin, & Zikmund. (2015). Exploring marketing research. Cengage Learning. Facebook. (n.d.). Facebook FORM 10-K. Retrieved from UNITED STATES SECURITIES AND EXCHANGE COMMISSION: https://www.sec.gov/Archives/edgar/data/1326801/000132680116000043/fb-12312015x10k.htm Malhotra, Birks, & Wills. (2013). Essentials of marketing research.