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Dec 6, 2023
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1.
Porter’s Five Forces (Industry Analysis)
In the world of social media and messaging apps, Snapchat is known for its unique features and approach to engaging users. By applying Porter's Five Forces framework, we can understand the competitive dynamics that influence Snapchat's industry. Snapchat has a balanced position in the social media world, with both opportunities to stand out and challenges from external factors.
a.
Threat of New Entrants:
Snapchat is a social media and messaging app. It faces a moderate threat from new competitors. The barriers to entering this industry include the need for capital to develop the app, establish a brand, and attract users. Snapchat stands out because of its special features like disappearing messages and AR filters, which make it difficult for it’s competitors to copy.
b.
Bargaining Power of Buyers:
The bargaining power of buyers in the social media industry is high. Users have a lot of choices, and switching costs are generally low. Snapchat must continue to innovate and address user concerns to retain its user base. The availability of substitute platforms and the ease with which users can switch between them puts pressure on Snapchat to provide unique and valuable features.
c.
Bargaining Power of Suppliers:
Suppliers, also referred to as content creators, advertisers, and technology providers, can influence Snapchat's ability to negotiate favorable terms due to its market position. Content creators may have moderate power, particularly if they are highly influential. Advertisers might have some bargaining power based on the effectiveness of Snapchat's ad platform.
d.
Threat of Substitute Products or Services:
The threat of substitutes is high in the social media industry. Users can easily switch to other platforms offering similar services. Snapchat must continuously update its features and user experience to stay competitive and reduce the threat
of substitutes.
e.
Intensity of Competitive Rivalry:
Competition in the social media industry is fierce. Snapchat competes with platforms such as Instagram, Facebook, and TikTok. The industry is known for its
fast-paced innovation, frequent copying of features, and the constant need for user involvement. For Snapchat to stay ahead, it is important to differentiate itself
with unique features and remain innovative.
2.
Company Strategic Position and Key Drivers of Competitive Strategy:
As Snapchat competes in the social media industry, its success depends on important resources and unique features that drive its competitive strategy. In this
analysis of Snapchat's strategy, we explore the Resource-Based View to uncover
the key elements that maintain its competitive advantage. From its technology and brand recognition to its growing user base, Snapchat strategically uses a variety of resources that contribute to its ongoing success.
a.
Resource-Based View:
Snapchat relies on several key resources to maintain its competitive advantage. These resources include its technology infrastructure, brand recognition, and user base. One of Snapchat's most valuable resources is its unique features, such as Stories and AR filters. These features set Snapchat apart from its competitors and contribute to its popularity among users. In addition to its features, Snapchat's data analytics capabilities play a crucial role in its success. By analyzing user behavior and preferences, Snapchat can better the user experience and deliver targeted advertisements. Overall, Snapchat's key resources, including its technology infrastructure, brand recognition, unique features, and data analytics capabilities, are essential for its continued growth and success.
b.
Sources of Advantage:
Snapchat stands out from other social media platforms because it focuses on temporary content also known as stories. This unique approach, along with its focus on younger audiences and partnerships with content creators, gives it a competitive advantage. Snapchat's Discover feature lets media companies share
content, which attracts users and advertisers. The short content feature allows users to share moments without worrying about them being saved forever. This appeals to younger people who value privacy and authenticity. By partnering with content creators, Snapchat ensures a constant flow of different kinds of content, which strengthens its position in the social media world.
c.
Timing:
Snapchat became successful because it entered the market at the right time. The
company introduced the concept of disappearing messages and capitalized on the growing trend of visual communication among younger users. Snapchat has also shown the ability to adapt to trends, like the rise of short-form video content, it shows it is flexible.
3.
Current Target Customer Base for the Company:
Snapchat’s current target customer base is centered around a younger demographic with a focus on users age 13-34. This age group represents the platform’s core audience and Snapchat has tailored its features, content, and marketing strategies to the preferences and behaviors of this demographic. Here are some key aspects of Snapchat’s target customer base:
Age Demographics: Snapchat gained popularity among teenagers and young adults due to its unique and innovative approach to social media. The platform's design and features, like
disappearing messages and Stories, appealed to the younger audience’s that were seeking a more private and visually engaging content.
Visual Communication Preferences:
Snapchat's focus on visual communication, like photos, short videos, and filters, fits the preferences of its target audience. Snapchat understands that visual and expressive forms of communication are becoming more popular, setting it apart from text-heavy or status-filled social media sites.
Augmented Reality (AR) and Filters: Snapchat's focus on augmented reality (AR) filters and interactive lenses are a key attraction for its users. The playful and creative nature of these features appeals to younger audiences, encourages them to engage with the platform.
Content Consumption Habits:
Snapchat's Discover feature lets media companies and influencers share content
that suits the content consumption habits of its target audience. It serves as a hub for short videos, news, and entertainment, offering a wide range of content that matches the interests of young users.
Influencers and Content Creators:
Snapchat works closely with content creators who appeal to its target audience. This partnership helps Snapchat stay relevant and appealing to younger users who frequently follow and interact with the content made by their favorite influencers.
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SCRIPT: Industry Analysis (Porter’s Five Forces) Threat of New Entrants
Snapchat is a social media and messaging app. It faces a moderate threat from new competitors. The barriers to entering this industry include the need for capital to develop the app, establish a brand, and attract users
Bargaining Power of Buyers
The bargaining power of buyers in the social media industry is high. Users have a lot of choices,
and switching costs are generally low. This puts pressure on snapchat to provide unique and valuable features. Bargaining Power of Suppliers
Suppliers, in this market also known as content creators, advertisers, and app developers have moderate power.
Threat of Substitution
The threat of substitutes is high in the social media industry. Users can easily switch to other platforms offering similar services. Snapchat must continuously update its features and user experience to stay relevant.
Intensity of Competitive Rivalry
Competition in the social media industry is fierce. Snapchat competes with platforms such as Instagram, Facebook, and TikTok. The industry is known for its fast-paced innovation, frequent copying of features, and the constant need for user involvement.
Company Strategic Position and Key Drivers of Competitive Strategy Resource-Based View:
Snapchat relies on several key resources to maintain its competitive advantage. These resources include its technology infrastructure, brand recognition, and user base. One of Snapchat's most valuable resources is its unique features, like Stories and augmented reality (AR) filters. Snapchat analyzes user behavior and preferences, which makes the user experience better and delivers targeted advertisements. Source advantage: Snapchat stands out from other social media platforms because it focuses on temporary content
like stories, and disappearing messages. This attracts younger audiences that value their privacy. Snapchat also has a discover feature that lets media companies share content, which attracts users and advertisers.
Current Target Customer Base
Age demographics: Snapchat tailored its features and content to a younger demographic, gaining popularity among teenagers and young adults seeking a private and visually engaging social media experience.
Visual Communication Preferences:
The platform's focus on visual communication through photos, short videos, and filters aligns perfectly with the preferences of its target audience. Augmented Reality (AR) and Filters:
Snapchat's emphasis on augmented reality (AR) filters and interactive lenses adds a playful and
creative dimension, appealing to younger audiences and encouraging engagement