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SWOT Analysis: Facebook

Introduction to Facebook Facebook, a technology company and a platform of social media has been founded on 04th Feb, 2004. It has almost 2.89 billion users globally. It is founded by Chris Hughes, Dustin Moskovitz, Mark Zuckerberg and Eduardo Saverin. Facebook having 44942 workers is public limited company. The headquarters are in California, United States. Company is earning 70.7 billion$ as revenue annually and out of this its net income is about 18.5 billion dollars. Some of the products or services offered by Facebook are Instagram, Messenger, Lasso, stories, WhatsApp, Workplace, Oculus, Marketplace, Calibra, Watch, newsfeed, Facebook dating and the social media platform. In a variety of categories, Facebook has many rivals. For instance, Snapchat, Twitter, Pinterest and LinkedIn, the messaging and social media rivals; Amazon and Google in the category of advertisement, Tik Tok and YouTube in videos and in business category, Microsoft, Zoom and Slack however in electronic payment category Venno, Paypal are the main rivals.

Strengths of Facebook Following are the strengths of Facebook: Well Established Brand: Facebook is at top position compared with other social-media platforms. Facebook has been ranked 5th global leading brand having 88.9 billion US $ net worth, according to an estimate by Forbes in 2019 end. These numbers indicate that Facebook is not only stable but sustainable brand also in long-term (Copuš and Čarnogurský, 2017). Offers Diverse Products/Services: The main reason behind company’s success in the rapid technological era is because it has not restricted itself to only one product. Company has kept diversifying itself with time and due to this it is financially stable by spreading risk. If Facebook was only one platform, people would be bored that’s why company continued adding various products for facilitating users such as Instagram, Oculus, WhatsApp, Messenger etc. Strong Market Position: In accordance with the estimate of Statista on 31st Dec, 2019, Facebook and its products have 2.6 billion active customers approximately. Advertisers as well as marketers can easily be attracted by these figures (Chandel, Sethi and Mishra, 2017).

Loyal Users: Facebook’s regular users that are about 40% of population worldwide consider company’s product portfolio unbeatable. This is due to creativity, stability and diversity over time. These features make people loyal to Facebook. Customer loyalty indicates that you will have more monthly active customers. If this ratio falls it will indicate customers are moving to other platforms (Ben-Shaul and Reichel, 2018). Strong Leadership: Mark Zuckerberg, because of his visionary leadership has made Facebook successful in a short time period. Mark Zuckerberg’s never-ending fight for creativity and innovation has brought Facebook up to this level. He has laid the basis of an innovative culture where new ideas can be learned daily (Gerbaudo, 2017).

Research & Development: We live in a technical era where success is defined by long-term continuity. If you are a leader who is tech innovative, it indicates that you should continue to deliver creativity and innovativeness through R&D. While talking about R&D, the Facebook is market leader. According to estimates, Facebook invested 19.1 percent of its annual sales on research and development in year 2019, amounting to 13.6 billion USD (Turel and Serenko, 2020). Advertisement and Marketing: The major income source of Facebook is advertisement. In accordance with an estimate in year 2019, 98.5% revenue of Facebook comes from ads. Now, the main concern is why advertisers like Facebook advertising, it is because the platform has over 2 billion active users globally. The Facebook marketing tool is easy and effective, and it enables you to select your target audience.

Weaknesses of Facebook Internal weaknesses of the Facebook are described below; Privacy Issues: While Facebook is a social networking site where individuals can share photos as well as other ideas with their friends and loved ones, however, it has currently come to the notice that user data on the platform is not safe. Because of the privacy concerns, Facebook is losing its popularity in various corners of world. However, if it is not noticed by the management, then it will cause the Facebook users to fall. A recent survey published by the Edison Research Data showed that the firm has lost 15 million consumers since 2017 (Esteve, 2017). Relying on Ads: Facebook’s business model is frail; it only depends on customers’ advertisement and traffic. Facebook would lose its main income source if its customers’ traffic is lost in future. Ad revenue accounts for approximately 98.5 percent of total revenue. Other paying services should be sought by the company. Fake News: For spreading the information that is misleading, fake news, Facebook has become playground in the recent years. It's surprising that Facebook hasn't really been able to deal with and monitor such content. Serious people would quit Facebook forever if things remained the same (Guess, Nagler and Tucker, 2019). Conflict among Management: There was controversy that was widely reported in the US media, alleging that Russia tried to interfere in the election of 2016 using data of Facebook, and this is how Donald Trump got elected. The company's top management refused to accept blame as soon as this news became public. Rather, they continued to point their fingers at each other.

Opportunities for Facebook Facebook can use following external opportunities; Paid Services: Among the chief reasons behind Facebook’s popularity is the diverse portfolio that it offers. However, company earns mostly through advertisement. If it starts offering the paid services for instance, Facebook dating, it will enable the firm to have one more income source for itself. Platform Expansion: As company has well-reputed legal brand name as well as great number of customers and also it is involved in different other businesses. Its management must take into account competing with the other brands such as Apple, eBay and Amazon etc. (Nieborg and Helmond, 2019). Integrate with other Applications: Integration can be a perfect way to link information from one platform to the information from another. If company allows other things such as games, reviews, websites, e-commerce stores and blogs etc. It can attract the new customers and can strengthen existing customers’ loyalty. Diverse Audience: The great number of Facebook users are from the demographic category of young and tech savvy people and if Facebook adds more features for business-minded, senior people as well as the adults then company can grab more customers for itself. New Acquisition: WhatsApp and Instagram are two examples of Facebook's active acquisitions of well-established sites to expand its product range. Entrepreneurs and the Young start-ups do not have enough capital for their platform expansion into next, so then Facebook acquires it in huge amount. For both of the parties, it is a win-win situation. Exploit New Trends: Nowadays customers use the social-media sites in their cell phones as they are flexible and easy as well. Facebook can also earn by adding the extra feature of advertisements on the cell phones. An estimate showed that these advertisements can increase by almost 26 percent and they won’t cost the company a bit (Dolata, 2017).

Threats to Facebook Facebook must avoid following external threats; New Competitors: The company's potential power has been undermined by the success of new platform such as Tik Tok amongst the younger generation. In order to compete with Tik Tok and draw young people, Facebook has launched a video channel called ‘‘Lasso”. More Regulations: Latest Laws and policies concerning user protection and data privacy presents a serious challenge to the firm such as data breach, violent content, spam, drugs, hate speech, sexual harassment and terrorist propaganda. These laws are intended to

hold Facebook transparent and accountable. This shows that users will migrate to some other platform for convenience and versatility, and the business will lose the market share (Hoffmann, Proferes and Zimmer, 2018). Countries Banned Facebook: False and easy information in the country which is democratic, is acceptable, however, to dictatorial regimes, they are a huge threat. Countries such as China, Russia, and North Korea have banned Facebook recently in their countries. User Data Hacked: For hackers in order to steal the personal data from users and use the data for the negative purposes, Facebook is goldmine. In the December 2019, hackers gained access to Facebook's servers, exposing the personal information of approximately 267 million users. More Taxes: European Union and UK has launched new category of the digital tax which will make the company to pay the taxes. If other countries levy similar digital taxes, the business would be hit hard (Reddick, Chatfield and Ojo, 2017).

Conclusion According to Facebook's SWOT analysis, company is doing better and has significant market share. Whereas, management must keep in mind the hackers’ threats, rivals such as Tik Tok, privacy issues and new regulation. If Facebook does not make the new radical transitions, then company’s future would be in the great jeopardy.

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Turel, O., & Serenko, A. (2020). Cognitive biases and excessive use of social media: The facebook implicit associations test (FIAT). Addictive behaviors, 105, 106328....