Social Media Industry Evolution Analysis

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Presentation assessing the competitive environment in which the social media industry participants compete. Includes historical evolution of the industry and the key issues facing participants in the industry now. Also illustrated are the changes in the environment, competitors, customers, and suppliers that have impacted the strategy, business model, and profitability of the industry players.

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  • Growth of mobile devicesShift in marketing strategiesIncrease of online presence and activity
  • Customer loyalty combined with expanding closed ecosystem. While at first Apple’s closed ecosystem was a weakness for the business, this has now changed. First, Apple now has a full range of apps, software and products that are interlinked and support each other. Second, new products and supplements will be released soon (iTV), hence expanding the ecosystem. Third, Apple has a strong customer loyalty, which increases due to Apple’s closed ecosystem, which, in turn, is supported by customer loyalty. So the combination of Apple’s expanding closed ecosystem and customers’ loyalty increases firm’s competitive advantage.Strong financial performance ($10,000,000,000 cash, gross profit margin 43.9% and no debt). Apple’s financial performance is one of the best among many companies. Company currently (end of 2012) holds about $10,000,000,000 in cash, which can be used for acquisitions, buying back company shares and other matters. It also has higher gross profit margin than its main competitors, which is equal to 43.9%. Company has no debt and is not directly affected by interest rates or credit markets.Brand reputation. Apple has a reputation of highly innovative, well designed, and well-functioning products and sound company performance. Apple brand is valued at $76.5 billion and was the second most valuable brand in the world in 2012.
  • Customer loyalty combined with expanding closed ecosystem. While at first Apple’s closed ecosystem was a weakness for the business, this has now changed. First, Apple now has a full range of apps, software and products that are interlinked and support each other. Second, new products and supplements will be released soon (iTV), hence expanding the ecosystem. Third, Apple has a strong customer loyalty, which increases due to Apple’s closed ecosystem, which, in turn, is supported by customer loyalty. So the combination of Apple’s expanding closed ecosystem and customers’ loyalty increases firm’s competitive advantage.Strong financial performance ($10,000,000,000 cash, gross profit margin 43.9% and no debt). Apple’s financial performance is one of the best among many companies. Company currently (end of 2012) holds about $10,000,000,000 in cash, which can be used for acquisitions, buying back company shares and other matters. It also has higher gross profit margin than its main competitors, which is equal to 43.9%. Company has no debt and is not directly affected by interest rates or credit markets.Brand reputation. Apple has a reputation of highly innovative, well designed, and well-functioning products and sound company performance. Apple brand is valued at $76.5 billion and was the second most valuable brand in the world in 2012.
  • Customer loyalty combined with expanding closed ecosystem. While at first Apple’s closed ecosystem was a weakness for the business, this has now changed. First, Apple now has a full range of apps, software and products that are interlinked and support each other. Second, new products and supplements will be released soon (iTV), hence expanding the ecosystem. Third, Apple has a strong customer loyalty, which increases due to Apple’s closed ecosystem, which, in turn, is supported by customer loyalty. So the combination of Apple’s expanding closed ecosystem and customers’ loyalty increases firm’s competitive advantage.Strong financial performance ($10,000,000,000 cash, gross profit margin 43.9% and no debt). Apple’s financial performance is one of the best among many companies. Company currently (end of 2012) holds about $10,000,000,000 in cash, which can be used for acquisitions, buying back company shares and other matters. It also has higher gross profit margin than its main competitors, which is equal to 43.9%. Company has no debt and is not directly affected by interest rates or credit markets.Brand reputation. Apple has a reputation of highly innovative, well designed, and well-functioning products and sound company performance. Apple brand is valued at $76.5 billion and was the second most valuable brand in the world in 2012.
  • Customer loyalty combined with expanding closed ecosystem. While at first Apple’s closed ecosystem was a weakness for the business, this has now changed. First, Apple now has a full range of apps, software and products that are interlinked and support each other. Second, new products and supplements will be released soon (iTV), hence expanding the ecosystem. Third, Apple has a strong customer loyalty, which increases due to Apple’s closed ecosystem, which, in turn, is supported by customer loyalty. So the combination of Apple’s expanding closed ecosystem and customers’ loyalty increases firm’s competitive advantage.Strong financial performance ($10,000,000,000 cash, gross profit margin 43.9% and no debt). Apple’s financial performance is one of the best among many companies. Company currently (end of 2012) holds about $10,000,000,000 in cash, which can be used for acquisitions, buying back company shares and other matters. It also has higher gross profit margin than its main competitors, which is equal to 43.9%. Company has no debt and is not directly affected by interest rates or credit markets.Brand reputation. Apple has a reputation of highly innovative, well designed, and well-functioning products and sound company performance. Apple brand is valued at $76.5 billion and was the second most valuable brand in the world in 2012.
  • Customer loyalty combined with expanding closed ecosystem. While at first Apple’s closed ecosystem was a weakness for the business, this has now changed. First, Apple now has a full range of apps, software and products that are interlinked and support each other. Second, new products and supplements will be released soon (iTV), hence expanding the ecosystem. Third, Apple has a strong customer loyalty, which increases due to Apple’s closed ecosystem, which, in turn, is supported by customer loyalty. So the combination of Apple’s expanding closed ecosystem and customers’ loyalty increases firm’s competitive advantage.Strong financial performance ($10,000,000,000 cash, gross profit margin 43.9% and no debt). Apple’s financial performance is one of the best among many companies. Company currently (end of 2012) holds about $10,000,000,000 in cash, which can be used for acquisitions, buying back company shares and other matters. It also has higher gross profit margin than its main competitors, which is equal to 43.9%. Company has no debt and is not directly affected by interest rates or credit markets.Brand reputation. Apple has a reputation of highly innovative, well designed, and well-functioning products and sound company performance. Apple brand is valued at $76.5 billion and was the second most valuable brand in the world in 2012.
  • Growth of mobile devicesShift in marketing strategiesIncrease of online presence and activity
  • Growth of mobile devicesShift in marketing strategiesIncrease of online presence and activity
  • Growth of mobile devicesShift in marketing strategiesIncrease of online presence and activity
  • Growth of mobile devicesShift in marketing strategiesIncrease of online presence and activity
  • Mobile ad revenueJob search and recruitment marketSocial JobsGraph SearchOnline DatingGraph Search
  • Mobile ad revenueJob search and recruitment marketSocial JobsGraph SearchOnline DatingGraph Search
  • Mobile ad revenueJob search and recruitment marketSocial JobsGraph SearchOnline DatingGraph Search
  • Social Media Industry Evolution Analysis

    1. 1. SOCIAL MEDIA INDUSTRY evolution ANALYSISAaronLoyal|
    2. 2. INDUSTRY HISTORY• Before 1995 • Discovery of 6 Degrees of Separation • Bulletin Board System•1995-2003 • Demise of Bulletin Board System • World Wide Web • America Online (AOL)• 2003-Present • Social Media Giants • Gaining revenue from users
    3. 3. BIG THREE• Facebook • ~1 billion active users • $5 billion revenue in 2012 • Business model: incremental revenues, ads• Twitter • 500 million active users • $9 billion estimated value • Business model: sponsored tweets• Google+ • 343 million active users • $40 billion revenue in 2012 • Business model: highly personalized ads
    4. 4. COMPETITIVE LANDSCAPE: 5 forces Threat of New Entrants Buyer Intra- Supplier Bargaining Industry Bargaining Power Rivalry Power Threat of Substitutes
    5. 5. COMPETITIVE LANDSCAPE: 5 forces Bargaining power of consumers • Brand equity • Many substitutes available • Low/moderate switching costs - HIGH -
    6. 6. COMPETITIVE LANDSCAPE: 5 forces Threat of new entrants • Saturated market • Moderate customer loyalty • Low initial investment costs • Difficult user accumulation and retention - MODERATE -
    7. 7. COMPETITIVE LANDSCAPE: 5 forces Bargaining power of suppliers • High availability of hardware & storage providers • Equal supplier concentration to firm concentration ratio • Minimal supplier differentiation - LOW -
    8. 8. COMPETITIVE LANDSCAPE: 5 forces Threat of substitute products • Large number of substitutes • Decreasing perception of differentiation • Brand reputation. - HIGH -
    9. 9. COMPETITIVE LANDSCAPE: 5 forces THREAT OF industry RIVALRY • Many substitutes available • Constant need for innovation and differentiation - HIGH -
    10. 10. INDUSTRY trends• Growth of Mobile Devices• Shift in Marketing Strategies• Increase of Online Presence and Activity
    11. 11. INDUSTRY CHALLENGES•Data Privacy•Monetization of Mobile Content•International Censorship•Measurement of ROI and Value•Distribution of Profit
    12. 12. INDUSTRY CHANGES•Revenue Gain Strategies•Connecting Businesses with Consumers•Transition from Private to Public
    13. 13. IMPACT ON STRATEGY | BUSINESS MODEL | PROFITABILITY Impact on Industry Strategy, Business Model & Profitability Mobile Device Growth • Opportunities for mobile monetization ↑ • More businesses using Facebook ads and greater data volume Trends Marketing Strategies Shift from users → Profitability ↑ • More mobilephone apps Online Presence & Activity • More advertisements Growth Data Privacy Mobile Monetization • Bad reputation for lack of data privacy-decrease of users Challenges • Difficulty monetizing mobile → Profitability ↓ International Censorship • Difficulty expanding overseas (China)→ Profitability ↓ • The top social networks will continue to grow but struggle ROI & Value Measurement with competing with each other because they are hard to compare Profit Distribution Revenue Gain Strategies • Opportunities for revenue from users (in addition to businesses) ↑ Changes Connecting Businesses with • Seamless ad integration  increased buyer intent  Consumers Profitability ↑ • Difficulty meeting shareholder and Wall Street demands Transition from Private to Public
    14. 14. FACEBOOK FUTURE STRATEGIES• Mobile Ad Revenue • #1 popular app in US but underwhelming mobile ad revenues • Large amount of mobile apps• Job Search & Recruitment Market • Social Jobs • Graph Search• Online Dating • Graph Search
    15. 15. twitter FUTURE STRATEGIES•Breaking intoE-Commerce Partnership with AMEX• International Expansion into Brazil
    16. 16. Google+ FUTURE STRATEGIES• Advertising Revenue• Sync Google+ with all Google-relatedServices• Community Focus• Google Hangout
    17. 17. ADDITIONAL QUESTIONS

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