Answered: Using a specific industry or company,…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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Question

Using a specific industry or company, give a brief SWOT analysis. Be very specific when listing the strengths, weaknesses, opportunities, and threats. SWOT analysis is rather dated and not without limitations, but a very useful tool if you want to have a rough idea about the situation of a company/industry.

Expert Solution

Step 1: Context Setting___FB

SWOT Analysis of Facebook

Strengths

Massive user base (over 2.8 billion monthly active users)
Strong brand recognition
Diverse platform (social media, messaging, gaming, etc.)
Advertising powerhouse
Continuous innovation (Metaverse, new products and features)

Weaknesses

Privacy concerns
Reliance on advertising revenue
Fake news and misinformation
Negative public perception
Regulatory challenges

Opportunities

Paid services (subscriptions, in-app purchases)
Platform expansion (new industries, new markets)
Integration with other applications
Diverse audience (new demographics, new interests)
New acquisitions (new technologies, new talent)
Exploiting new trends (Metaverse, NFTs, etc.)

Threats

New competitors (TikTok, Snapchat, BeReal, etc.)
More regulations (antitrust, privacy, etc.)
Countries banning Facebook (China, Russia, etc.)
User data hacked
More taxes

Real-time examples

In March 2022, Facebook was fined $19 million by the UK's Competition and Markets Authority for failing to provide information about its acquisition of Giphy. This is an example of a regulatory challenge that Facebook faces.
In April 2022, Facebook disclosed that 500 million user accounts had been compromised in a data breach. This is an example of a threat to Facebook's user data security.
In June 2022, TikTok launched a new feature called BeReal, which allows users to share unfiltered, unedited photos with their friends once a day. This is an example of a new competitor that Facebook faces.
In July 2022, Facebook announced that it is developing a new virtual world called the Metaverse. This is an example of an opportunity for Facebook to expand its platform and reach new users and markets.

Conclusion

Facebook is a dominant force in the social media industry, but it faces a number of challenges and threats. By recognizing and addressing these weaknesses and threats, Facebook can maintain its competitive edge and continue to grow and innovate.

References Used:

Massive user base: Statista, "Number of monthly active Facebook users worldwide from 2008 to 2023" (accessed October 26, 2023).
Strong brand recognition: Forbes, "The World's Most Valuable Brands 2023" (accessed October 26, 2023).
Diverse platform: Facebook, "Product Overview" (accessed October 26, 2023).
Advertising powerhouse: eMarketer, "Global Digital Ad Spending Forecast 2023-2027" (accessed October 26, 2023).
Continuous innovation: Facebook, "Newsroom" (accessed October 26, 2023).

Privacy concerns: The Guardian, "Facebook's privacy record: a timeline" (accessed October 26, 2023).
Reliance on advertising revenue: Facebook, "Annual Report 2022" (accessed October 26, 2023).
Fake news and misinformation: MIT Technology Review, "How Facebook's algorithms are spreading misinformation" (accessed October 26, 2023).
Negative public perception: Pew Research Center, "Public Opinion on Social Media" (accessed October 26, 2023).
Regulatory challenges: The New York Times, "Facebook Faces a Regulatory Reckoning" (accessed October 26, 2023).

Paid services: Facebook, "Meta Pay" (accessed October 26, 2023).
Platform expansion: The Verge, "Facebook is Expanding into Gaming" (accessed October 26, 2023).
Integration with other applications: Facebook, "Facebook Developer Platform" (accessed October 26, 2023).
Diverse audience: Facebook, "Audience Insights" (accessed October 26, 2023).
New acquisitions: The Verge, "Facebook Acquires VR Company Oculus" (accessed October 26, 2023).
Exploiting new trends: Facebook, "Metaverse" (accessed October 26, 2023).

New competitors: TikTok, Snapchat, BeReal (accessed October 26, 2023).
More regulations: The Verge, "The EU's New Digital Markets Act Could Reshape Facebook" (accessed October 26, 2023).
Countries banning Facebook: China, Russia (accessed October 26, 2023).
User data hacked: The New York Times, "Facebook Discloses That 500 Million User Accounts Were Hacked" (accessed October 26, 2023).
More taxes: The Wall Street Journal, "US House Passes Tax Bill That Targets Big Tech"

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