The online social networking industry is growing rapidly with a variety of both personal and business oriented applications emerging tapping into the global marketplace. Some of the major applications include Facebook, Myspace and LinkedIn. There are also many niche applications popping up, such as those targeting a specific geographic region (e.g. Cyworld in Asia), industry (e.g. the Accounting Network) or customer group (e.g. PartnerUp for entrepreneurs).
Abby Hunter, a former high school classmate, recently approached you with a new social networking website that she has designed. She is excited about the possibility of entering the industry and taking advantage of the growing demand for social networking. Yet, although Abby has an extensive technical background and the ability to build most any feature into her website, she is unsure of what strategic direction to take it. For instance, should she focus in on a specific niche or keep it more mainstream? What features should she add? What clientele should she market the website to and how can she best reach them? How should she approach pricing? How can she best compete?
Given your background and management expertise that you've built from your MBA class work, Abby would like to offer you a share of the ownership in exchange for helping develop and implement a strategic plan to get the new venture off the ground. This involves presenting the plan to a group of venture capitalists in order to obtain funding to launch the website.
In your initial discussions, you explain to Abby the importance of examining the external environment. Discuss how at least one macro level factor in the external environment has already or could in the future impact the structure of the online social networking industry in the global marketplace.
//To enter into the online social networking business, the entrepreneurs are required to have complete knowledge of the external business environment. For this purpose, the strategic plan can be helpful for the business owner. With this plan, the external factors like pricing and product features, competitive approaches and target customers can be identified by the owner to have a favorable start of the business. This has been explained under the given heading.//
Importance of Examining the External Business Environment:
The external environment of the business is the surrounding in which a business exists. For different kinds of businesses, the external environment behaves in different ways. The online social network industry is also a new field of business which is not known to most of the market segments yet. To examine the external environment is very important to understand the requirements of the particular business in the immediate ...
The response addresses the queries posted in 565 words with references. External business factors are thoroughly examined in the context of creating a social networking strategic plan.