Facebook Inc. utilizes cost leadership generic strategy, which involves minimizing the costs of conducting business. The strategy enables the company to competitively reduce its prices as it continues to broadly provide social media services to billions of users across the globe. When it comes to differentiation strategy, Facebook Inc's product is one of the most unique in the world in terms of features, design, quality, and customer service. For this reason, it has been the most used social media platform in the world. To maintain a competitive advantage, Facebook Inc complemented its social networking website by developing mobile apps. Such an innovation attracts more users as well as advertisers, and the two groups are the company's source of income. Most of Facebook's users range from age 14 to 34, and this enables the company to focus on their interests narrowly (Dudovskiy, 2017). For example, between the ages of 14 to 23, most people are into outdoor activities, which makes Facebook the most reliable platform to post pictures and interact with their friends. As the individuals approach the ages of 25 to 34, all of them have various jobs, with some venturing into business activities. Again, Facebook becomes a crucial tool for the marketing of products and services for such individuals.
Facebook is a social media platform that enables individuals and businesses to get in touch with friends as well as potential customers. At the moment, the product portfolio encapsulates items like Messenger, events, videos, search, pages, groups, profiles, and News Feed (Dudovskiy, 2017). There are different levels of accounts that one can create, depending on preference and the goal in mind. For instance, one can have an account as a person with friends, a page with followers, an event that has potential attendees, and a group comprising of interactive members. Apart from such accounts, Facebook also allows companies and business persons to create pages to advertise and sell their various products and services. There are several ways that Facebook makes money, some of which include self-serve and targeted advertisements. A recent study revealed that 85% of the total revenue that Facebook Inc makes comes from Ads (Dudovskiy, 2017). Through Ad Manager, Facebook enables anyone to creates an ad while offering granular tools to make sure that the advert reaches the relevant and targeted audience. When it comes to targeted advertisements, Facebook holds large amounts of users' data, most of which include their age, hobbies, careers, political affiliations, and preferences, as well as gender. Consequently, the company can sell advertising space to business entities that want to reach out to users with a similar preference. In doing so, Facebook Inc generates millions of dollars in revenue.
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Facebook Inc achieves growth through intensive strategies such as market penetration, where the main objective for this is the maximization of the current market share. An example of this strategy at work is how the company forms alliances with other telecommunication companies. In doing so, Facebook increases the number of users who age granted access to its social media platforms, courtesy of the mobile app. Such a strategy is in line with Facebook Inc's competitive strategy of cost leadership through the maximization of market reach by using the already available assets. For business growth, Facebook Inc uses a secondary intensive strategy called market development. The main reason for such a strategy is to allow Facebook to penetrate new markets. Market development aligns with Facebook's corporate mission, which is to give people the power to build community and bring the world closer together. For this reason, the company strives to work with governments across the globe to make social networks accessible to citizens.
Facebook Inc has expanded from its original product line through the acquisition of other companies. To begin with, the company acquired Jibbigo, which is a language translation app in 2013 (Dudovskiy, 2017). The corporate strategy enabled the company to reach out to more customers as they could now use the original platform in a preferred language. In the same way, Facebook Inc purchased Atlas Solutions from Microsoft, which also happened in 2013 (Dudovskiy, 2017). The application enabled Facebook advertisers to monitor their various outreach programs successfully. In the social media industry, technology is a quintessential part, and companies that embrace technological change gain a competitive strategy. This was the case for Facebook Inc in 2014, where it purchased Oculus VR (Dudovskiy, 2017). The corporate strategy was a genius move that substantiated its place in the VR technology and market. What this means is that Facebook can now reach specific consumers like video games, marketers in ways that were impossible before. Facebook Inc has also diversified its products through the purchase of other social media platforms like Instagram and WhatsApp, both of which happened in 2014. The purchase of WhatsApp, for instance, was at $19 billion, which made its acquisition the biggest one that Facebook has ever made to date (Dudovskiy, 2017). It is a widely popular instant messaging app that Facebook has not figured how to use to reach out to more audiences. Nonetheless, the company is ramping up a new business model to charge advertisers every time they use WhatsApp to reach out to potential customers.
Facebook Inc has a matrix corporate organizational structure, and this addresses its core needs, particularly those revolving around innovation and creativity (Lombardo, 2018). Some of the main features of the structure include geographic divisions, product-based divisions, and corporate function-based teams. The corporate teams that the company maintains are based on business functions in operational management throughout the corporate structure. The strategy, hence, is based on social media needs. The main function-based teams that Facebook Inc has include operations, finance, accounting, privacy, legal, security, investor relations, marketing, product management, human resource, and technology (Lombardo, 2018). When it comes to geographical divisions, Facebook Inc experiences differences in social networking as well as advertising market dynamics across different regions. For example, European users and advertisers differ from their Latin America in the way they use Facebook. Such issues can cause unnecessary complications in an already complex corporate structure. Facebook Inc Facebook Inc, however, does not have senior executive teams for each region around the globe and instead uses the function-based teams. Additionally, the regions which include North America, Latin America, Asia, and South Pacific, Europe, Middle East, and Africa share resources (Lombardo, 2018). Based on the corporate structure, Facebook's operations focus on potential expansion, diversification, and social networking services. The company's corporate structure has the product-based divisions, which include Central Product Services, Family of Apps, and New Platforms and Infrastructure (Lombardo, 2018).
Through the use of a corporate matrix structure, Facebook Inc acquires flexibility that enables it to carry out its business operations. Such flexibility is advantageous as it helps the company timely respond to market changes and technological trends. Moreover, the corporate structure helps Facebook Inc maintain its control and determine the direction of its operations on a global scale. Such control is relevant in business as it ensures that Facebook's business operations are in tandem with its mission statements. What is more, it enables the company to maintain its competitive advantage as well as its massive market share. Managing a global company difficult, and this makes Facebook's corporate teams' strategy a key determinant in the success of business operations. Such teams aid the company in breaking down business goals and objectives to be achieved across all regions.
References
Dudovskiy, J. (2017, January 3). Facebook Business Strategy and Competitive Advantage . Research-Methodology . https://research-methodology.net/facebook-business-strategy- and-competitive-advantage/
Lombardo, J. (2018, September 8). Facebook Inc.'s Organizational Structure (Analysis) . Panmore Institute . https://panmore.com/facebook-inc-organizational-structure-analysis
