BUSINESS

SWOT Analysis of Facebook: How it Became a Media Power House

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SWOT analysis of Facebook or of any organization is an evaluation of its strengths, weaknesses, opportunities, and threats. SWOT is an acronym for strengths, weaknesses, opportunities, and threats. The strengths are the advantages, the unique selling proposition, the competitive advantage, the cost advantage you have over your competitors.

The weaknesses of your organization are what you have been doing wrong or what your competitors are doing better than you. These can be in the form of high costs, lack of research and development, low customer loyalty, lack of finance and so on. Opportunities are the chances available to the organization to make profits or gain any sort of benefit out of it, if properly exploited. Threats are the potential dangers for the organization. They can be major threats such as international competitor entering the market or a minor threat such as a small labor strike.

Strengths and weaknesses are the internal matters of the organization. The management has direct control over them. Management can capitalize on their strengths and avoid and minimize their weaknesses. On the other hand, opportunities and threats are mostly the external matters of the organization. They are not under direct control of the organization’s management. However, the organization can catch on to the opportunities and capitalize on them. Management can avoid the threats and eliminate them.

SWOT Analysis of Facebook

Facebook, a social networking website, was launched in 2004 by Mark Zuckerberg and Eduardo Saverin. Currently, Facebook owns big social networking websites including WhatsApp, Instagram, Onavo and so on. The company has a worth of more than $500 Billion. Facebook is,no doubt, a huge company, but it operates in a highly competitive one. Amidst the big competitors of the likes of Twitter and Snapchat, Facebook does have many strengths, weaknesses, opportunities and threats which we will be evaluating here.

Strengths

As one can imagine about a huge firm, there are several strengths under the SWOT Analysis of Facebook which it can capitalize on and using which it is extremely successful recently in capturing such a huge number of users. Facebook has several strengths, and the first and the biggest is its brand image.

Facebook has such a strong brand image that people literally identify social media market with Facebook’s name. Adding to this, it has a very strong loyal customer base which means customers regularly check their accounts, update their information on it and interact with people there. Another strength under the Facebook swot is an integrated system of frequently used applications which are owned by Facebook. Users can share their things among these applications, they can link accounts and they can also login directly to any other application if they have Facebook logged in already. Facebook is also famous for having a highly creative and innovative workforce which helps Facebook come up with trendy ideas such as electronic birthday cards on every user’s birthday.

Weaknesses

There are several weaknesses under the SWOT Analysis of Facebook. One of them was very recent. Facebook asks its users to provide personal information, so following the recent allegations on Facebook of selling users’ personal information, Facebook is facing a crisis from its users where the users are now reluctant to provide personal information. Without personal information, the user experience is not that rich and complete as it is with the personal information. Adding to this, Facebook earns revenue from advertisements. These adverts come on users’ home screens while using Facebook. This can have a negative impact on user experience if the user gets irritated by continuously popping adverts on his/her wall.

Opportunities

There are several opportunities too under the SWOT Analysis of Facebook. One of the recently taken over opportunity of Facebook was the acquirement of Oculus VR which is a technology company producing virtual reality devices and games. These devices also compliment the Facebook application. Diversifying its interests in other fields is also a very interesting opportunity for Facebook given that it is the third biggest website and has the capital and other resources available to do so. One great chance of diversifying for Facebook is to enter the mobile phone devices manufacturing market just like Google did recently.

Facebook can launch mobile phones under its own brand names. This would not only increase direct revenues for Facebook. Their devices would also compliment the original Facebook applications. By the end of 2015, the daily average mobile phones’ users increased by about 25%. This increase in the mobile users opens up the opportunity of mobile advertisement for Facebook. Adding to this, the company can also step ahead in the target audience marketing. Facebook has the personal information of users and knows their ages, interests, hometown, and connections.

Threats

The most major threat for under the SWOT Analysis of Facebook is the competition from other social media websites including Snapchat, Twitter, LinkedIn and Google+. These websites are growing as much as Facebook daily. Especially Twitter; it has an advantage over Facebook that a huge number of celebrities prefer Twitter over Facebook. Celebrities influence their fans to join Twitter and start using it at the place of Facebook.


Another threat under the Facebook SWOT is an increasing rate of cybercrime around the world. Facebook plays a major role in these activities, because people may use Facebook as a measure to do these crimes. Many people stop using Facebook getting scared after hearing stories of cybercrime from other people. No doubt, Facebook does not approve of these crimes happening. The problem is that it can track literally everything that is going on and might be able to stop it. However, this is not an easy job.

Another huge threat under the SWOT Analysis of Facebook is the market saturation. As a huge chunk of the entire world’s population already uses Facebook or any other social media networking site. Another threat for Facebook is the blocking and hiding of the advertisements by users. Users do not want to see the adverts during their use. Therefore, they use external procedures to avoid those adverts. If this continues, Facebook will start losing clients who use Facebook to advertise their products and services.

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