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MGMT 588


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  • 1. 0 FACEBOOKGM 588 Managing Quality/Week 7 Leading, Building, and Sustaining Performance ExcellenceKeller Graduate School of ManagementApril 14, 2011Introduction
  • 2. 1 Facebook is the largest worldwide social network, as of January 2011 it has over 600million users, founded by a Harvard undergraduate named Mark Zuckerberg, in February of2004, (CrunchBunch). It began by connecting Harvard students and then surrounding colleges,but later opened its service to the general public. Microsoft powers the sites Web search andprovides its search ads. Members post photos and information about themselves, share videosand connect with one another through online profiles. It provides messaging services to its usersand mobile applications to Java-powered feature phones. Following are interesting facts: Type of industry: Internet Information Providers Product or service: Technology Size of company: 2,000 + Facebook’s headquarters is located in Palo Alto, California, with sales offices throughEurope and Asia. Its international headquarters is located in Dublin, Ireland and sales office inHong Kong, Hamburg, Hyderabad, London, Madrid, Milan, Paris, Singapore, Selangor,Stockholm, Sydney, and Toronto, (CrunchBunch). The Mission: “Facebook mission is to give people the power to share and make the world more open and connected." (Facebook.com) Considering that Facebook is a relatively new organization, it is still leading, buildingand sustaining performance excellence as it keeps ahead of its hefty competitors such as GoogleInc., MySpace Inc., and Twitter Inc. tomention a few. Last year in November 2010, Facebooksurpassed Google in “pageviews” and it accounted for 1 in every 4 pageviews in the US(brandchannel.com 2010). Plus as, based on its estimated value of $41 billion, it is the thirdlargest web brand in the US behind Goolgewith$192.9 billion and Amazon at $74.4 billion,
  • 3. 2alsoit is important to note that eBay lags in fourth place behind Facebook with 39.3 billion(brandchannel.com 2010). By comparison in 2007, Facebook was said to have been valued at$15billionranking5thmost valuable US Internet company (Arrington, M. 2007). Facebook’s growth is a testament to their high quality management and leadership intheindustry.WithComments like this one from Forrester’s analyst Augie Ray says Facebook "hasin fairly short order—just a couple of years—gone from being a very niche site to one where themajority of Americans spend a great deal of their online time."(brandchannel.com 2010) showthe magnitude of what Facebook has achieved in such a short time. In the process of growing, Facebook has kept their mission right on target. Facebook hasnot blinked at the huge monetary offers it has consistently received since its inception, starting in2004 when they were offered $10 million to as much as Yahoo’s offer in 2006 of $1 billion andViacom’s for $750 million. Plus other multiple attempts from Google and Microsoft to acquirethem.(brandchannel.com 2010).Facebook has accepted millions of dollars form investors inorder to keep with their Mission of “giving people the power to share and make the world moreopen and connected”.Identified Problems and use of Quality Management (North America) Global competition has forced many organizations to satisfy the ever-growing demandsof the customers. It’s a well-known fact that no business can exist without customers. Facebookneeded to retain existing customers while targeting non-customers as well. They formed strategicpriorities and examined their business practices to evaluate how to meet the challenges in facingcompetition in domestic and international markets. Ituses a management system that is acustomer focused organization that involves all employees in continual improvement of allaspects of the organization. The structured system for meeting and exceeding customer needs
  • 4. 3and expectations created company-wide participation in the planning and implementation ofbreakthrough and continuous improvement processes. It integrates Facebook’s business plan andhas had a positively influence on customer satisfaction and market share growth. A new survey from the Pew Internet & American Life Project finds that some 65 percentof U.S. Internet users have opened up their wallets and paid for online content, whether that ismusic, videos, software, games, or other items (Duncan, 2010). Most online buyers spend on theorder of $10 per month the equivalent of just a few cups of coffee (Duncan, 2010). Buckle downbecause the digital spending habit is here to stay. The industry is taking jobs from localcommunities adding to the unemployment numbers.
  • 5. 4 Another problem for Facebook is security risks increase as users become more and moreenthusiastic to try out new features: shopping, new games, add-ons, and of course, the Facebookfan pages. Of the most dreaded Facebook security problems is that there is plenty of room forusers to enter their information. Most of the users go on to enter all their details including theirphotos, real names, addresses, and even phone numbers. This makes it easy for bad guys to targetthese users for identity theft. Another facet of protecting your identity comes from potentialemployers, spouses, and business prospects can read these posts and get a strong opinion aboutyou. You would not like to lose a business contract just because you posted a stupid message orcomment. You can easily create friend groups in a way to restrict access of who sees what. Thisway you can allow your nearest friends to see everything you post while restricting access topeople in other groups. The highest probabilities among Facebook security problems are phishing attacks anddownloading malware. If you are befriending a stranger, you are at a greater Facebook securityrisk as you might be inviting someone who wants to siphon off all the info s/he needs to hackyour computer or to steal your identity or something even more dangerous. Always rememberthat it is easy for anyone to create a fake profile on any social network and Facebook is noexemption. A cute lady can actually be one of your enemies who may lead you into dialogs thatruin your online and offline reputation. Before accepting or sending a friend request, check outthe profile of the person. If you find anything suspicious, it is better to stay off the person. An additional interesting feature of Facebook is that it allows user to create customgames and add-ons. These are an easy way to send in malware to your computer or mobilephones. When you allow a third party application to gain access to your profile, it may not onlymisuse the information (yours and of those in your friends too) but also download any kind of
  • 6. 5malware into your computer. In simple language, using third party applications such as games,ads, or any add-on can increase Facebook security risks. Facebook has over 500 Million users giving them the control of several different markets(Yasmine, 2011). The notoriety has decreased the amount of feedback answers to issuesprovided by its customers. Facebook introduce a new feature or functionality, Facebook userswant to contact Facebook support for the feedback. Urge to contact Facebook support is morewhen a new feature is not liked by users at large. Facebook is a big concern and contacting themdirectly is not easy. Most easy way to contact Facebook is by using contact forms for specificFacebook features. Facebook is set up as a business. It has its customers’ interests to serve so that it can be aprofitable company and return its investors’ money and provide a return for its financialstakeholders. The problem is that Facebook users are not the customer. They are the product thatis sold to the actual customers who (I suspect) are advertisers. Thus, Facebook’s values aren’tnecessarily aligned with their users, which mean, almost inevitably, privacy is not Facebook’skey concern. So if with Facebook, the users are the product, what are they actually selling? The socialgraphs its users create, along with the logged minutiae of their lives, could just be the productthat Facebook is, and will continue, to sell to advertisers. Your privacy is Facebook’s product.Your social graph has value to advertisers.
  • 7. 6Opportunities in International Perspective CEO Mark Zuckerberg gave an interesting story of seven radical militants’ in Lebanon.Their perspective about Western world has changed by the impact of “social networks’ andinternet’s global bridge… Javier Olivian, international manager at Facebook, states 500 million of Facebook users’60% are from outside of United States and Canada. Facebook is in 89 languages. Internet, socialnetwork and globalization are common terms, but Facebook gained loyalty, trust and brandimage by providing lingual prerogatives to its members all over the world. An additional opportunity that Facebook gets from international expansion is attractingadvertisers, audiences, new markets, acquirers and investors. According to Research CompanyPingdom Facebook generated user adoption. Members increased 153% and growth wasastronomical in Europe, Asia and Middle East. Respectively Turkey, Britain and South Africarecorded the highest membership numbers in one year. In this sense Facebook needs to improve technology driven international strategy.“Rather than launch local-language versions of Facebook for new markets, complete with alocal Facebook bureau, Facebook opted to provide translation tools [BusinessWeek.com,5/14/08] that let users take the existing site and personalize it in their own tongue. The tools,which users can tweak to create more accurate translations, helped Facebook roll out in newcountries faster than many rivals, giving it an early presence in local markets that grewexponentially as users encouraged friends to join the site. "It was a very scalable process," sayscomScore senior analyst Andrew Lipsman. "They have gotten these things up and going quicklyand the audiences are up." (Holahan, 2008)
  • 8. 7 Another international opportunity for Facebook could be adding a new feature toFacebook applications and creation of an “employment” network. LinkedIn shows incredibleresults in global business terms. People find jobs, recommend facilities, people, jobs, companies,opportunities, data; people enlarge their vision about employment and companies by LinkedIn’sglobal network. Since many companies realized in global competition they have to cooperatewith social networks and number one is Facebook. Companies look for new targets markets;even do their market segmentation by Facebook. Especially textile, media, technology, restaurantand entertainment industry created and attracted audiences by the benefits of social network.Social networks become major communication channel between business and end customers.Internet and Facebook are on top for marketers to reimburse their integrated marketingcommunications. When there is very intense traffic of business’ global popularity competition,an international social-employment network facility of Facebook could create benefits forcustomers and businesses. “Nearly 28% of college students plan to seek employment using LinkedIn, up from 5%last year, according to a survey out today from employee recognition provider I Love Rewardsand career-services network Experience. Slightly more than 7% plan to use Facebook, up from5%.” (USA Today, 2011). Especially new grads look comments and updates of companies’Facebook pages and career services recommend job seekers an intense relationship with socialnetworks such as Facebook. In this environment and with these trend parameters Facebook couldgain opportunities with employment related facilities, as LinkedIn does.
  • 9. 8Recommendations and Solutions Face book overall customer service is terrible because it fails to help membersresourcefully when it comes to accessing their account. The issue was users were not able toaccess their accounts for several days. Facebook did not report that it was “down formaintenance” The representative stated that it was an issue with the data base. He gave the usersa 24 hour time period to fix the problem, it took longer than expected. This type of performanceis detrimental for the business because users can easily decide to leave Facebook for good.Mainly, some user’s accounts were deleted and their contact was lost as well. The best methodwould b to create features people can use to save contact and profile information in case of anerror occurring. Even though, the Face book is free it is essential to treat people like a payingcustomer. Consequently, without the users Facebook will not be successful. This company has not succeeded in obtaining best practices when an individual accountis hack. In this situation the software was not the issue, it actually what temporary suspended.Paul was told by friends that his Facebook setup was change. The bad part about the situationwas the user not being able to see exactly what was occurring with the account because he waslocked out the account. Facebook solution to this sort of problem is to give the user a Facebooktest. This is not really accurate because the user must identify a photo of friend they witheraccepted or asked to be friend wit. The issue Paul has was not remembering exactly who was afriend. Facebook is a website where you meet a lot of individuals for the first time; therefore, itwould not be a good idea to use this method to allow users to get back within their account. Forthe simple fact an individual would probably have a difficult time choosing the right name of thephoto display randomly. It would be hard to figure out if the individual is not one of the userclose friends. Another method Facebook uses is security questions; the only problem is Paul did
  • 10. 9not remember the answer. A good recommendation would be to allow the Facebook to obtaincustomer support. Paul stated in the article there was not live customer support in Facebook. Heeventually solves the test in got back within the account. His complaints were they had slowresponses to his email, however, did apologize for the situation. The best thing to do to sustainFacebook is to treat the users like paying customer, because this will continue their usage.Remember MySpace was once the major website people network on the most in the pass. Do notallow something better with better service to take Facebook position as one the most popularwebsite. Facebook has failed to implement strategies to protect children from cyber bullying.Facebook has fail at incorporating a button for individuals to click upon to report any cyberbulling. A good recommendation for Facebook to establish is the same button Bebo’s websiteincorporated within their website (F a c e b o o k f a i l s , 2 0 0 9 ). This allows the individual toreceive access to child protection officers in order to help the individual with their situation. Anindividual from Child Exploitation and Online Protection Centre name Jim Gamble was appallthat the Facebook did not feel an extreme need to incorporate the button on the website.Recommendations would be for Facebook to consider the duty of care every organization shoulduphold. Many young people especially are using this site. It practical is a simple solution becauseit is a button that is small and does not take up much space. It has been said by Facebook’sspokesman that the number one priority is for individuals to be safe firstly. Facebook hasinstilled a robust reporting system; this system actually supports 300 million individuals who usethe website (F a c e b o o k f a i l s , 2 0 0 9 ).
  • 11. 10Conclusion As we conclude our report, we can all agree that Facebook is the product of a Harvardprodigy: Mark Zuckerberg. His idea of linking Harvard University students and staff expandedto a world wide Internet social network, beyond his wildest dreams. This concept hastransformed the way we communicate, live, and share personal information, today. Facebook is arelatively young organization and who knows how far they will go. What we do know is thatthey are toppling the charts with popularity, exponential growth, and have the potential ability tosustain itself for many more years to come. Let’s recap on some of Facebook’s statistical facts:Competitors: o MySpace o Twitter o Bebo o Friendster o LinkedIn o Tagged o Hi5 o Piczo o Open SocialEstimated value: o Google: $192.9 Billion o Facebook: $75 Billion as of March 14, 2011, SecondMarket o Amazon: $74.4 Billion o eBay: $39.3 BillionEmployees: 2,000 +
  • 12. 11Members: over 500 Million, 65% overseas Facebook is leading, building, and sustaining performance excellence by managing itscustomer volume, range, and management systems in customer focus that involves all employeesin continual improvement mode. This organization has seventy-five members in differentcapacities to support Mark Zuckerberg, CEO from Board of Directors, VP of Advertising andGlobal Operations, CTO. COO, CFO, Hacker, Engineers, VP Product, VP Human Resources,Recruiting, to Director of Public Policy, just to mention a few. Zuckerberg is well equipped witha team that is super- charged with success, talent and opportunities in the national and globalarenas, (CrunchBase). Since its inception in February 2004, Facebook has built its popularity largely through thedesire of people wanting to share personal information with family and friends within seconds.Of course there are issues that Facebook has to face such as security breaches, privacy concernsand public safety. They will definitely have to work with Homeland Security to safeguard users,but this will be a continuous dilemma as hackers become wiser and sneakier in performing theirdevious acts. The large volume of customers also multiplies the number of trouble shootingFacebook faces with login issues, inability to access accounts, and what will they do withcustomers’ information. Facebook will have to continue evaluating its services as it continues toexpand globally, install updates, implement changes, and satisfy customers’ demands.
  • 13. 12
  • 14. 13 ReferencesACSI (July 2010). Quality Digest. Com ASCI Study: Customer Rate Social Media and Online Portals.http://www.qualitydigest.com/inside/quality-insider-news/acsi-google-s-score- dips-sharply facebook-myspace-bottom.htmlArrington, M. (October 25, 2007). TechChrunch.com. Perspective: Facebook is Now 5th Most Valuable U.S. Internet Company. Retrieved from: http://techcrunch.com/2007/10/25/perspective-facebook-is-now-5th-most-valuable-us- internet-company/Crunchbase, Facebook Company Profile retrieved March 7, 2011 http://www.crunchbase.com/company/facebookDigital Trends (2010) Geoff Duncan, Survey: Nearly two-thirds of U.S. Internet users have bought content. Retrieved from:http://www.digitaltrends.com/mobile/survey-nearly- two-thirds-of-u-s-internet-users-have-bought-content/Holahan, C. (2008). Facebook: No.1 Globally. Business week, p4-4.Leonard, K. (2010). Businesses woo customers through Facebook, Twitter. Pittsburgh Tribune Review (PA).Shayon, S (Nov 23, 2010). Brnadchsnnle.com: What’s Shaking in FacebookVille: Coca-Cola, FIFA, Tesco and more. Retrieved from: http://www.brandchannel.com/home/post/2010/11/23/Facebook- Watch-112310.aspx
  • 15. 14TNW (2011) FatemaYasmine. Facebook’s Known Issues Page: Helps with Facebook problems FIFA, Tesco and more. Retrieved from: http://www.brandchannel.com/home/post/2010/11/23/Facebook-Watch-112310.aspx