Case 12: Facebook
All questions are given 1 point except Qn 7.
1. Definition and characteristics of social networking (services).
-Definition: social network collects any information that individuals share in network and connect the dots of personnel who have similarities building social relations based on the power of connection.
-Characteristics: Social network services carries three main purposes, which are advertising, employee and idea screening and application development and gaming.
Advertising is the main revenue resource that social network generates profits from. Social network gives an opportunity to the firms who wish to catch the user’s needs to promote their ...view middle of the document...
New entrants may come up with an idea to differentiate their product but it is highly uncertain that the strategy might be tempting for users to sign in their websites or not. Therefore, I think it has high barriers to entry.
-Bargaining power of suppliers (low): Widgets and apps providers are usually small developers with little bargaining power
-Industry Rivalry (high) : There are more and more IT based startup companies emerging fueled by venture capital and speculative valuations. Social networking does not require high volume of expenditure compared to manufacturing business.
-Threat of Substitutes (low) : most of well-known social network websites have their unique mission and serve individually different purpose to connect the users.
-Buyer power (high) : switching costs are minimal. The amount of data of users is the most important asset to the social network services companies. As the social media emphasizes the invasion of privacy in social network, more and more users are not willing to expose themselves online. The social trend tend to make major impact on the decision of users to join their websites or not.
-In conclusion, I think it is profitable industry because there might be high risk of failure but even in failure, the damage in capital is minimal. If you have insightful idea of how to attract many users to join the website, I think it is highly recommended market to be successful.
3. Briefly summarize the competitors of Facebook in a table format.
|Google Plus |They already have high infrastructure from 100million google service users. Since the number of |
| |users is the key success to the social network service, google plus maybe the most competitive |
| |potential opponent against facebook |
|Twitter |Twiter’s strength is “quick and simple posts from mobile.” Its quick and simple posts make mobile ...