Porter's 5 forces, thefacebook, Facebook, WhatsApp, Intasgram, Eduardo Saverin, Dustin Moskovitz, Chris Hughes, Mark Zuckerberg, social media, Harvard University, Snapchat, TikTok
Today, Facebook is known to all and is an integral part of our lives. It all started on February 4, 2004, at Harvard in the USA. When it was created, only Harvard University students had access to and the right to use it. Over time, students from other American and Canadian universities could also enrol. It was only in 2006 that Facebook would be open and accessible to everyone.
[...] This will allow Facebook to acquire long-term profitability vis-à-vis internet providers. A. Threat of New Entrants Generally, the internet arena is characterised by low barriers to entry. Indeed, it is easy to create websites and internet applications. However, a lot of resources are required for marketing, brand promotion as well as brand recognition. This reinforces the barriers to entry. New entrants to this sector usually bring innovation through new ways of doing things. Hence, Facebook is under pressure, as these new entrants offer lower prices, cost reductions, etc. [...]
[...] Starting from Messenger, WhatsApp, Instagram, Facebook and all the people who advertise on these different platforms, they are all at the service of Facebook. If a user withdraws from one Facebook platform, the likelihood of using other Facebook platforms is low. Buyers are often in large numbers and they are looking to buy the best deals available at affordable (lowest possible) prices. Facebook needs to work seriously to make people willing to use its services. This could mean cutting back on announcements or investing in research and development. In the long term, this weakens Facebook's profitability. [...]
[...] Our study, therefore, reveals that Facebook must continually put in place strategies and a management system allowing it to satisfy customers. This will allow Facebook to maintain its customer base as well as gain market share. Porter's 5 forces allow Facebook to identify the changing trend in the market early on and exploit it. Understanding these 5 strengths in detail can allow Facebook executives to harness them in their favour. Bibliography and references -https: //www.investopedia.com/articles/markets/111615/analyzing-porters-5- forces-facebook.asp -http: //panmore.com/facebook-inc-five-forces-analysis-recommendations- porters-model -https://www. [...]
[...] It will reduce the cost per unit. - Invest in research and development. If Facebook redefines industry standards regularly through its research and new entrants will have difficulty entering an industry that is very dynamic. New entrants will have a hard time making a profit resulting in discouragement, and Facebook will have eliminated the threat. B. Threat of Substitute Products The social networking industry is constantly evolving and if it were to be overtaken, Facebook will lose many customers. Setting up applications to share information (photos, messages, etc.) only with the family or groups in complete safety could reduce the use of Facebook. [...]
[...] The idea is to have a company that has low bargaining power compared to Facebook. E. Intra-Sector Competition Facebook competes with several other social media like Google Plus or Twitter. Facebook is able to compete directly with the competition because it has multiple platforms. Indeed, younger users prefer WhatsApp or Snapchat. However, professionals are turning to Facebook or LinkedIn pages. Strong competition between existing companies in the sector leads to lower prices, which also reduces profitability. Facebook operates in a highly competitive sector. [...]
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