Facebook In 2013: Will Wall Street Hit Like the Like Button? Harvard Case Solution & Analysis

Facebook In 2013: Will Wall Street Hit Like the Like Button?

Question 1  

Facebook’s resources and capabilities

The most important resources of the Facebook include its users, advertisers, developers that create new games and other applications for the Facebook users, easily accessibility and the Facebook team. These resources play an important role in the evolution and achievements of the Facebook worldwide. The strong user base, innovation capability and powerful image are the intangible resources of the company.

Moreover, Facebook has the great capabilities in identifying new advertising methods in order to improve the user engagement and targeting. The Facebook has the innate potential to allow advertisers to attract potential buyers. Furthermore, Facebook in order to increase its valuation and to further expand has acquired Instagram for $ 1billion. The constant innovation in the service offerings of the Facebook is also an important capability.

The sharing of photos is one of the core capability of the Facebook which has been a vital factor in the success as well as in its ability to drive user engagement. However, introduction of Facebook has enhanced the capabilities of the advertisers in term of attracting customers and growth. The Facebook has formed the Strategic alliance with the Microsoft in order to compete directly with the Google on various fronts.

Facebook’s strategic capabilities

The devotion of the company in evolving the capabilities that help in order to connect the world by providing high quality services and building better user experience also in the long term. The company should need to focus its strategic capabilities on the development of the platform on the areas such as on the security and privacy of the users as well as on the monetization. Whereas, company has effective resources and capacities that have the ability to provide the Facebook with the competitive advantage in term of services offerings and revenue.

Furthermore, strategic capabilities should also focus on the constant use of the latest technology in order to enhance and innovate the features of its service offerings to retain the user base .As well, it is very important for the company to develop effective distinctive capabilities in order differentiate itself from those of competitor’s offerings that may result in sustainable competitive advantage.

VRIO Analysis

Resources, Capabilities and Core Competencies

Valuable

Rare

Costly to imitate

Exploited by the organization

Competitive Implication

Performance implication

No

Competitive Disadvantage

Below Normal

Yes

No

Competitive Parity

Normal

Yes

Yes

No

Temporary Competitive Advantage

Temporary Above

Yes

Yes

Yes

Yes

Sustainable Competitive Advantage

Sustainable above normal

 

VRIO Analysis signifies that the Facebook lies in the third quadrant. In addition to this, the current strategy of the company provides a temporary competitive advantage and the temporary above performance. Allowing the ability to socialize to billions of users around the world by building excellent user experience is the valuable resource for the Facebook that gives it temporary competitive advantage over other competing sites in the industry. Also, it provides the free of cost service of socializing that increases its value.

Furthermore, socializing of the people is a valuable resource  by providing better services and user experience of the company that helps the large number of users to interact with each other in order to share information, photos and make connections.

Also, this is the rare quality that is provided by the Facebook as it is the world’s largest social networking site which provides different and innovative features to their users. However, it provides few services that are not provided by any website in the industry and also differentiate it from other social websites by giving temporary competitive advantage over its rivals.

This capability of the Facebook is not costly to imitate as it can be easily be duplicated by the major competitors of the Facebook with an investment. Additionally, these services are cost effective so, they are not very costly to imitate. Despite the fact that Facebook is the largest social interaction platform for the people, Twitter has given tough competition to the Facebook by adding more user-friendly features that allow professional connections surrounded within social interactions.

Question 2

SWOT Analysis

Strengths

Strengths of the Facebook include:

  • Facebook is fastest growing social site around the world in term of revenue and customer base.
  • Another strength of Facebook is the excellent user experience and strong customer base.
  • Facebook is most popular brand around the world that provide the strong platform to make new connections as well as maintain their connections in long term with the people.
  • Facebook’s another strength is its understanding of customer preferences and behaviors that help them to make innovations in the site.

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