FACEBOOK

Corporate Level Strategies

1. Growth Strategy
● Horizontal Growth
Facebook uses concentric diversification as a supporting intensive
strategy for growth. The main objective in this intensive growth strategy is to
enlarge the production portfolio by adding new innovations that fully utilize
the existing features and technologies of the company. An example of this is
how Facebook used Oculus VR to offer virtual reality technology that
complements social networking services. Through concentric diversification,
Facebook’s strategic objective is to purchase or establish new subsidiaries or
businesses to increase revenues and market reach. The cost leadership
generic competitive strategy involves cost minimization that supports the
implementation of this intensive strategy.

2. Stability Strategy
● No-change Strategy
Facebook shows no-change strategy as they mostly just add minimal
changes in their system but not major and noticeable ones and when they do,
it doesn’t happen usually. No-change strategy is demonstrated by a
management choice to continue current operations and policies for the
foreseeable future. Facebook only implements major changes when there is
an issue that teeters to the edge of criticality like solving the privacy issues
with redesigning Facebook by adding a separate application for messaging
only. Other than that, Facebook Inc. just continues with their operations with
the decision of not adding anything new to maintain stability. It is the mindset
of moving less instead of too much to avoid unnecessary changes that might
threaten the website more.

3. Retrenchment Strategy
● Turnaround Strategy
Turnaround strategy emphasizes the improvement of operational
efficiency when a corporation’s problems are pervasive but not yet critical.
Facebook used this strategy as a solution for the rampant privacy issues in
the website. At Facebook’s annual developer conference on April 30, founder
and CEO Mark Zuckerberg laid out a major change for the social media
platform: a shift to privacy. Facebook’s redesign, which was first announced in
a blog post in March, aims to prioritize private, encrypted messaging (on
Facebook Messenger as well as Facebook-acquired WhatsApp and Instagram’s
Direct Messaging) and Facebook groups over the more public “town square”-
style News Feed that has been the cornerstone of the platform since its

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 founding. Private messaging, Zuckerberg argued, is the future of social media
communications.

SWOT (Weaknesses)

1. User’s privacy concerns and issues

Facebook is facing backlash over its negligence in the protection of

user’s privacy, with the company experiencing a decline in popularity in some
regions across the world. If the company does not address users’ privacy
concerns promptly and effectively, it risks losing its popularity.

According to Edison Research data, Facebook has lost about 15 million

users since 2017.

2. Overdependence on Advertising

Facebook's business model relies heavily on advertising for its

revenues. About 98.5 % of its annual revenue comes from advertising. In
2019, Out of $70.70 billion annual revenue, $69.66 billion was its advertising
revenue.

3. Spreading of Fake News

Facebook has been under a lot of criticism for spreading fake and
misleading information. Facebook's inability to control misleading information
can be very detrimental to society at large.

4. Friction in Management

Consecutive scandals have been disintegrating the harmony that

existed between top-level management since the company was founded. The
need for accountability is turning into a weakness as top executives point
fingers and seek to distance themselves from major scandals such as the
Russia meddling scandal.

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 References:

Greenspan, Roberta. (May 23, 2018). Facebook Inc.’s Generic Strategy & Intensive
Growth Strategies. Retrieved from: http://panmore.com/facebook-inc-generic-
strategy-intensive-growth-strategies

Kareeda Kabir, Ilari Papa. (October 27, 2019) Focusing on Privacy Won’t Solve
Facebook’s Problems. Retrieved from: https://www.lawfareblog.com/focusing-
privacy-wont-solve-facebooks-problems

Gupta, S.K. (April 28, 2020). Facebook SWOT Analysis 2020. Retrieved from:
https://bstrategyhub.com/facebook-swot-analysis/

Management Lesson Learned

In covering this research, we learned that Facebook really utilizes their

corporate level strategies well. The management really excels in maintaining their
growth, stability and retrenchment strategies. They use the strategies well and
know when to stop when they feel like they’re overdoing it. Facebook is still sitting
as one of the largest social media platforms in the world and this is due to their
carefully laid out strategies in order to maintain this position in the hierarchy of
surface websites.

Positive factors aside, Facebook seems to have an issue when it comes to

privacy. The users are usually complaining with the multiple fake accounts, the
spreading of fake news and breach of privacy. Facebook seems to deal with this by
improving their privacy settings and features and with adding a separate application
for messaging to prioritize private, encrypted messaging. However, the tactic seems
to be not enough as it only lessened the issues to it and the users are still actively
complaining about the same problems regardless of the laid-out solutions.

Facebook is known by everybody; it has been a catalyst when it comes to

social media platforms. It is proved how Facebook is a great way to communicate
and as a pastime to everyone as it caters all audiences. Regardless of the negative
issues that it is facing right now, we can see that the website will continue to thrive
and gain users as time goes by.

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