Businessand corporate strategy: Facebook Incorporation
Question1: Main industry
FacebookIncorporation is a public company that offers social network servicesand its head offices are located in Menlo Park in the state ofCalifornia. Facebook Incorporation operates in the internetinformation providers industry, where it specializes in providing itsclients with a platform to connect and socialize without meetingphysically (Yahoo Finance 1). Although Facebook was among the firstcompanies to join the internet information providers industry with aspecialty in social networking, other competitors (such as Twitter,LinkedIn, and Instagram among others) have joined the sector. Thispaper will address Facebook’s business-level strategies andcorporate-level strategies, and determine whether these strategieshave changed in the recent past.
Question2: Business-level strategy
Business-levelstrategies are methods and plans that a company uses in order toconduct different functions in its operations. Facebook’sbusiness-level strategies are designed in a way that will help thecompany support its liquidity while preserving its capitalrequirements (Facebook Incorporation 20). In the company’s 2014annual report, the management stated that Facebook’s businessstrategies for the financial year 2015 onwards would include theaddition of complementary companies, specialized employees,technologies, and products (Facebook Incorporation 20). Some of thebasic elements that will help Facebook pursue its business-levelstrategy include the development of social products that will enhanceengagement, enhancing user experience, enhancing the ad product,reliability, and the ease of use.
Question3: Corporate-level strategies
Corporate-levelstrategies are often connected with company’s strategic decisionsand affect the entire organization. The main corporate-level strategythat Facebook has been pursuing is value-creating strategy. Thismeans that the company’s main objective has been to increase boththe perceived and real value of its services and products. Facebookstill maintains its objective to grow and increase its market share,but more resources are being allocated towards innovation with theobjective of developing new features that will improve users’experience instead of establishing unprofitable businessrelationships and acquisitions (Facebook Incorporation 18). Inaddition, the management of Facebook announced that it will seek toincrease the shareholder value starting from the financial year 2015by establishing an improved ad revenue sharing model that will targetpublishers (Sikka 1). This indicates that Facebook seeks to add itscorporate value by improving content on its site and diversifyinginto new and profitable products. These strategies will help Facebookincrease its market share and enhance its competitive advantage.
Question4: Change in strategies
Facebookhas focused on increasing its market share through the acquisition ofsimilar companies for several financial years. However, the companyannounced that it will change its growth strategies by evaluatingother growth avenues and stop acquiring other firms. In its 2014annual report, the company cited numerous factors that justified thechange of growth strategy, which include the lack of suitablecandidates for acquisition and the fear acquisitions might affect thecompany’s liquidity in a negative way (Facebook Incorporation 20).
Facebookis a U.S. based public company that operates in the internetinformation provider industry. The company pursues a well craftedbusiness-level strategy that aims at helping it protect its liquiditywhile retaining its capital requirements. In addition, Facebookpursues a value-creating corporate-level strategy that seeks toincrease its entire corporate value. It also allocates more resourcestowards innovation and diversification of services in order toexploit new avenues of corporate growth.
FacebookIncorporation. FacebookAnnual Report 2014.Menlo Park: Facebook, 2014. Print.
Sikka,P. Facebook changes ad revenue strategy to attract publications.MarketRealist Inc.5 May. 2015. Web. 22 October 2015.
YahooFinance. Facebook, In. (FB). YahooFinance.21 October. 2015. Web. 22 October 2015.