Essay Sample on Business Environment of Facebook Corporation

Paper Type:  Essay
Pages:  4
Wordcount:  952 Words
Date:  2022-11-07


The Facebook Company is a game changer in the modern communication space of social media. Launched in 2004, the Company has grown to become one of the most effective tools of communication, shaping global trends and carving out new markets for digital marketer (Zoonena et. al., 2018). The general environment of the Facebook Company is shaped by various economic and socio-cultural aspects within which it operates. Factors of the macro-environment sphere such as the rate of inflation, savings and foreign exchange greatly influence the aggregate and demand for investment in an economy (Hothi & Prakash, 2015). Factors of the macro-environment like the norms of competition influence the firm's competitive advantage. Facebook users vary in culture, demographics and geography as it is a multinational company that operates beyond borders. Therefore, different cultures have varying impacts on the business environment of Facebook Corporation.

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Environmental Scanning Strategy

The major competitor to Facebook is Twitter, Snapchat and LinkedIn. To sustain competitive advantage and create value, the Facebook Company must scan the environment in which it operates to comprehend the trends that control the industry and predict their implications. Facebook Company gathers demographic information about its users and creates an understanding of their preferences (Hothi & Prakash, 2015). The internet and the website is an excellent tool for the company to measure the volume of users it gets every month compared to its competitors. It can gather such information as the number of visitors per month, the number of account holders, the number of active users and the number of inactive users as a way of determining the level of satisfaction (Hothi & Prakash, 2015). The company can juxtapose such information with similar demographics from its competitors and examine the kinds of features on offer, their website layout as well as segmentation.

Facebook's External Environment and Forces that Drive Competition

The Facebook Company tops the list of companies associated with positive corporate social responsibility activities, and because of that, it has a strong brand name. External factors are considered as the elements that affect the company from the outside together with the operations and functions. One of the primary external elements that affect the Facebook Company is the rapidly expanding electronic commerce within the world of business (Kim & Kim, 2018). The business of Facebook Company is connected to the political landscape of the jurisdiction in which it operates. Political movements have the power to influence entire industries and the progress of certain businesses like social media marketing. Thus, political stability in the developed western nations acts as an advantage for the company whereas popular global support for technological innovation acts as an opportunity in the environment.

Three of the five forces that drive competition in the Facebook Company's external industry environment include the threat of new players in the market, risk from auxiliary products and competition among the current players. Due to the threat from existing players like Twitter and that from new entrants into the digital marketing sphere, the company has created a subsidiary called Instagram that runs on almost the same business model even though it is centred on video and picture sharing as opposed to information. Google's YouTube is a major competition, and it is centred on video sharing on a large scale basis and allows users to create content and share it on their channels (Kim & Kim, 2018). New entrants bring innovation and new ways of doing things threatening the place of Facebook as the leader in the social media space. Existing alternatives offer other options that the company does not have and threaten to take away its share of the market.

Facebook's General Environment

The Facebook Company operates in a general environment that allows it to increase the penetration of the market in the developing world with the gradual stabilization of the economies. The rapid growth of the economies of these countries leads to an improvement in the infrastructure and this includes the telecommunications networks. Developing countries are increasing their disposable incomes allowing users the capacity to devices and access the company's services and this expands the business (Hothi & Prakash, 2015). The influence and global reach of the company is under the impact of social conditions. It has the chance to improve its social media business as a way of increasing sustainability aimed at satisfying the concerns of the natural environment.

Facebook's Industry Operating Environment

The digital marketing sphere within which Facebook Company operates is one that has only recently began emerging as a major player in the online advertising industry. Unique from the competition and what sets aside the Facebook Company lies in the way it creates a place for people to hang out and update the world about what they do on a daily basis. The Company the posts advertisements alongside the users' status update. The company has to strike a balance between competing interests (Kim & Kim, 2018). It has to get people to share more of their lives on social media and also determine how to filter out only the interesting aspects of their lives. Such information is then customised to satisfy every individual's needs so that they may find it innovative and not intrusive. While social networks create content regarding posts and updates, the Facebook Company sells commercials targeting either the person or the content.

Works Cited

Hothi, H., & Prakash, S. (2015). Experiencing Company's Popularity and Finding Correlation between Companies in Various Countries Using Facebook's Insight Data. Procedia Computer Science, 50(1), 433-439.

Kim, B., & Kim, Y. (2018). Facebook versus Instagram: How perceived gratifications and technological attributes are related to the change in social media usage. The Social Science Journal, 1(1), 118-133.

Zoonena, W., Bartels, J., Prooijen, A.-M., & Schouten, A. (2018). Explaining Online Ambassadorship Behaviors on Facebook and LinkedIn. Computers in Human Behavior, 87(1), 354-362.

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