This article discusses corporate competitive strategy at several levels, corporate government, and the value proposition of Facebook, Inc. A focus of the discussion is how Facebook has used acquisitions as an effective competitive strategy in the face of pressing increased market share by Google and Twitter. Also, some discussion is devoted to the IPO and Facebook's shaky relations with customers due to privacy issues.
¶ … global social networking company, Facebook, Inc. has developed the standard for an interface platform that is user friendly. Facebook's developers have fully integrated the programming for Web and mobile applications. The company continues to expand ways for Facebook users to connect, discover, communicate, and share with other users across mobile and conventional digital devices. The mobile-to-mobile messaging application is available on both Android and iOS phones, and the Facebook platform integrates with Instagram. The Instagram Website and mobile application lets users customize the photos and videos they take with filter effects and the like, and share the photos and videos directly with friends and acquaintances or post them in a photo feed. At the end of fourth quarter 2013, Facebook had 1.23 billion monthly active users.
Competitive Strategy. Facebook employs a broad differentiation competitive strategy. A primary factor in the differentiation, according to David Kirkpatrick, author of The Facebook Effect, is that Facebook was based on genuine identities. Facebook's differentiation from other social networking sites, such as MySpace and Friendster, is the fact that the platform is based on authentic email addresses that are tied to people's real identities. This established a tenor of authenticity that encouraged people to engage with their friends and make new friends on the platform. Moreover, Facebook was designed by people with high technical skills who favored an elegantly simple interface, which made it easy to use. The Facebook developers come from the high tech world, according to Kirkpatrick (2011), which meant that they had an intuitive sense that the platform and services must continually change.
Facebook earnings come from advertising and commissions when software developers sell virtual goods on the Facebook Website. Until it's Initial Public Offering (IPO), Facebook was a closely held company that did not disclose its financials. Earnings prior to the IPO were believed to be more than $2 billion before interest, taxes, depreciation, and amortization. Facebook does not charge viewers to use the site as revenues are derived from the media publication of advertisements and commissions. In fact, this revenue-generating stream has recently been transformed from a behind the scenes approach to one that is embedded in the Facebook interface stream of posts. This tactic for using a generic strategy enables Facebook to treat the targeted advertisements as a convenience to Facebook users, and is testing the placement of posts that conform to the typical posting conventions but that are generated specifically as advertisements -- that is, ads masquerading as posts.
Facebook competes through the use of corporate-level strategies that increase their user base through keen differentiation. Accomplishing broad differentiation requires a strong and unique value proposition, a feat that Facebook has been able to accomplish through its visionary development of corporate alliances and focus on customer-centric growth strategies. Facebook's acquisition of Instagram is an example of a corporate-level strategy that strongly enhances the Facebook customer experience (Rusli, 2011).
Evaluation and Control. Naturally, Facebook measures goal attainment in terms of monthly users of the Facebook platform and revenue generated from targeted ads placed on the Facebook platform by enterprises and organizations. Facebook's recent IPO did not go as well as the company had hoped or anticipated. Some of the issues related to the IPO difficulties were artifacts of Facebook's disregard for user privacy and continual updates of the platform that benefitted advertisers, but required hyper-vigilance on the part of Facebook's users to prevent information from being made public, and that re-set their privacy settings without their knowledge.
Facebook seems to have a vivid memory of having burned customers and been burned in return -- on post after post on its own platform. With the acquisition of Instagram, Facebook announced loudly and clearly that it will retain the features of Instagram that current customers enjoy, and that this will include " the ability to not share your Instagrams on Facebook if you want, and the ability to have followers and follow people separately from your friends on Facebook" (Rusli, 2011).
Facebook's acquisitions are designed to improve the design of the site, ensure service reliability, and particularly to advance the mobile features of the platform in order to compete effectively with Google and Twitter. An improved platform interface means more people will spend time on the site, access the platform on their mobile devices, and make purchases from advertisers. In 2011, Facebook made 13 acquisitions, many of which are intended to increase its market share in the social networking arena.
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