Swot analysis

Running Head: FACEBOOK MOVES INTO E-COMMERCE
Facebook Moves into E-Commerce
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Institution
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FACEBOOK MOVES INTO E-COMMERCE
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To facilitate a solution for the Facebook’s bridge to e-commerce, hence the SWOT
analysis was used in assessing the strengths, weaknesses, opportunities, and weaknesses of
the company, to focus on their relationship with generating advertising revenue in the
evolving market of the e-commerce. The information generated from this analysis would help
the firm capitalize on the internal factors, which compasses of the strengths and
opportunities, whereas being aware of the external factors including the weaknesses and
threats.
One of the strengths of the company includes the fast-growing client base, lucrative
database, developing user engagement, and the sustainable financial performance for all the
advertising strengths of the firm. This is attributed to its ability of catering for its users’
preferences that is essentially appealing for its younger adult customers (Young, 2018).
Further, the company ahs taken advantage of its grasp on the young demographic and caters
advertisements to all the people to attain a substantial revenue per user with mobile
advertisement. further, the company has data it generates for all its users and turns it into
information that can be utilized to inform decisions concerning which advertisements the
clients might be interested in or more probably to interact with. Facebook collects
information concerning its users and, in turn, the data is analyzed to customize every user’s
home page with relatable advertisements. Also, the number of other factors have recently
contributed to the client’s enhanced experiences on the social platforms. for instance, the
company in 2016 launched the Facebook Sport Stadium, that dedicate space to experience
sport in the real-time with friends and the world. Finally, the company caters to the lucrative
database offering value to advertiser and developers. Hence, the people who have Facebook
account connect to sign into other social media sites that have partnered with the firm rather
than requiring the user to separately register a new ID and password.
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Although the company’s strengths seem to be promising foundation for its success,
Facebook have exposed itself to numerous risks in being core dependent on the advertising
revenue. Other organizations that utilize Facebook for advertising could not fit for their
respective budget, especially, marketers do not have a prolonged advertising commitment
with the firm and most of their advertising budget spend merely a small portion. Also, since
the company rely on the short-term advertisement commitments, there is not a guaranteed
prolonged advertising objectives for the firm. This has created certain issues for the firm
because the market is continuously evolving. Hence, as the market evolves, there is an
increment of the users shifting to smartphones faster than the company’s ad revenue coming
in (Young, 2018). Also, this shift forms a possible loss in the ad dollars because of the users
swiftly increasing whereas the ad revenue is not used to its potential.
There are numerous promising opportunities that the company can implement to
ensure its continued success. The market has been developing mainly in mobile advertising,
and the industrial wide increase in the in-app purchase, to capitalize on such opportunities,
the firm continues to provide new and exciting product offerings. The mobile advertisements
have showed no indication of slowing down, hence the ability of firms like Facebook to
target particular demographics have driven this growth (Jurevicius, 2021). The digital
advertising market within US is expected to develop at the compound annual growth rate of
about 11.3% between 2015 and 2019 to reach 103.3% billion in 2019. Further, while the
company continues to develop with mobile advertising, in-apps purchases are emerging as
another source of the firm’s revenue growth.
With the several opportunities that the company has, there are always risks associated
to implementing them. The company has dangerous regulatory environment and intense
competition. Due to the firm’s immense audience globally, it is subject to the laws both at
home and abroad. The firm offers its client numerous regulations they face, like privacy and
FACEBOOK MOVES INTO E-COMMERCE
data protection, information retention and deletion, advertising and marketing distribution
among others. As Facebook and its subsidiaries continue to develop, it has become a subject
to additional laws and regulations, unintentionally unlawful actions, or increasing the risk of
penalty (MBA Skool Team, 2021). Moreover, since the present laws surrounding the social
media are new, it is unsafe to presume that they would be applied and interpreted the same
around the industry. Although the company should be careful about the regulations, the
immense competition it faces is a bigger threat. With the booming social media setting, the
firm has a unique challenge to stay ahead of the curve.
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References
Jurevicius, O. (2021). SWOT Analysis of Facebook. Strategic management insight. Retrieved
from: https://strategicmanagementinsight.com/swot-analyses/facebook-swot-analysis/
MBA Skool Team. (2021). Facebook SWOT Analysis, Competitors & USP. Mba skool.
Retrieved from: https://www.mbaskool.com/brandguide/media-andentertainment/1220-facebook.html
Young, J. (2018). Facebook Inc. SWOT Analysis & Recommendations. Panmore Institute.
Retrieved from: http://panmore.com/facebook-inc-swot-analysis-recommendations
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