Explore BrainMass

Facebook: Innovation Strategies

This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

Please help me analyze the case study (Facebook in 2011 by Arar Han. Case: E-406. Stanford Graduate School of Business. https://www.gsb.stanford.edu/faculty-research/case-studies/facebook-2011) based on the questions below:

1. How was Facebook able to stay ahead of competitors like Twitter, Instagram and LinkedIn over the last 5 years? What strategies did they implement to give them that competitive advantage?

2. Describe the weaknesses of Facebook's privacy policies and features. What factors contributed to those weaknesses? Did Facebook overcome this issue? If so, how?

3. What steps should Facebook take to increase the confidence of users, analysts and investors in its innovation strategies?

4. As the social media industry continues to expand, what measures should Facebook take to fend off new and innovative companies from entering the market?

© BrainMass Inc. brainmass.com March 22, 2019, 3:36 am ad1c9bdddf

Solution Preview

Step 1
Facebook was able to stay ahead of competitors such as Twitter, Instagram and Linkedln over the past 5 years by using several strategies. First, Facebook issued its IPO in 2012 by selling stock to public and trading on the NASDAQ. This gave Facebook the financial strength to compete and stay ahead of rivals. Further, it has used its financial strength to buy small or medium-sized companies to expand its reach. Some of its subsidiaries include Instagram, WhatsApp, Oculus VR, PrivateCore, and Messenger. One of the key focus of Facebook has been to increase its user base. The user base has now reached $1.65 billion monthly active users. This gives Facebook competitive advantage. More and more advertisers rush to Facebook. The company actually reduced the number of ads it displayed to increase the price of advertising. Advertising prices on Facebook increased substantially.

There were several tactics used by Facebook to increase is user base. For example, in 2013, it launched Graph Search which gave users a precise answer instead of providing them with a link to an answer. Its question for a higher user base did not end there. Facebook spread its appeal to mobile users by launching Facebook Home an interface for android users in 2013. HTC First, a smart phone with pre-loaded Home page was launched in the same year. Facebook has used collaboration to stay ahead of Twitter, Instagram and LinkedIn during the last five years. For example, Facebook entered into an alliance across 19 states with the National Association of Attorneys General , to provide teenagers and parent with information on tools to manage social networking profiles. Facebook has during the last five years introduced features that have made social networking easy for users and this has kept it ahead of Twitter, Instagram and LinkedIn. For example, Facebook introduced clickable hash-tags to help users follow trending discussions or search what others are talking about on a topic.

Facebook was able to see the growing market of mobile phone users early and by 2013 it had 945 million mobile users. Facebook was quick to understand the needs its users and acquired resources that fulfilled their needs. In 2014 it acquired the mobile messaging company Whatsapp for $19 billion. Similarly, Facebook penetrated emerging markets and underdeveloped economies to expand its user base. It acquired Pryte, a mobile data plan firm that made it easier for mobile phone users in underdeveloped parts to use wireless internet apps. For facilitating the sale of video inventory across devices, Facebook acquired LiveRail, an online video advertising company. The strategy that has kept Facebook ahead of competitors is differentiation. ...

Solution Summary

This solution explains how Facebook creates value through innovation strategies. The sources used are also included in the solution.