This document analyzes Facebook's strategic position using several frameworks: - PESTEL and Porter's Five Forces analyses examine the external environment in areas like politics, technology, competition and more. - Facebook's main competitors are mapped based on pace of innovation and user interaction. - The business model relies on advertising revenue and a huge user base/network effects. Key resources include capital, users and an ability to acquire competitors. - The strategy focuses on innovation, product integration, and process improvements to search/algorithms to maintain competitive advantage.

1. : Strategic analysis
Summary
• PESTEL Analysis and Porter‘s Five Forces Analysis
• Industry Structure
• Main Competitors and Strategic Mapping
• Business Model
• Resources and Capabilities
• Competitive Advantage
• Business Strategy & Innovation

2. : Strategic analysis
PESTEL Analysis
POLITICAL FACTOR
P E
• Stable political situation
• Facebook ban
ECONOMIC FACTOR
• Recovery after a major
economic crisis
SOCIO-CULTURAL FACTOR
• Link between people
• Addiction
TECHNOLOGICAL FACTOR
• Smartphone and tablet era
• Mobile advertisement
ENVIRONMENTAL FACTOR
• Pollution: CO2-emissions
• Climate change
S
E T
LEGAL FACTOR
• Law suits in U.S.
• Privacy issues in Europe L

3. : Strategic analysis
Porter 5 forces analysis
Threat of Entry:
• Small initial investment
• Sector of innovation
• Start-ups go mobile
Power of Suppliers:
• Users‘ activity = info
• Switching to anoter
network
Power of Buyers:
• Revenue from mobile
platform
• Important advertisers
Threat of Substitutes:
• No perfect substitute
• WhatsApp, Skype
Rivalry:
• Google+
• How active are users?
• High revenue from Ads
MED/HIGH MEDIUM
SMALL
HIGH SMALL

4. : Strategic analysis
Main Competitors & Strategic Mapping
high
Facebook Main
competitors
Q4- 2013
Pace of innovation
low
low
high
User
interaction

5. : Strategic analysis
Business Model
Revenue stream :
•Advertising
•30% cut on facebook credits
NETWORK
EFFECT
model
BRAND
ADVERTISING
model
• Facebook
apps and
game
developers
Key partners
Key activity
• Platform
development
and
maintenance
• Smart people
and technology
• Huge brand
• Huge user base
Key resources
Customer
relationships
• Long-term ,
sticky
relationship
• Network effect
• Everyone on the
internet
• SME , micro
advertisers
• Facebook Apps
and Games
developers
Customer
segments

6. : Strategic analysis
Resources and Capabilities
Resources:
• Capital
• Technical Equipment
• 1.2 billion users
Capabilities:
• keen sense of which
firm to acquire
(Instagram, WhatsApp,
face.com, etc.)

7. : Strategic analysis
Competitive Advantage
Sustained
competitve
advantage
Organized
Costly to
to imitate
capture
VaRluaarbele

8. : Strategic analysis
Business Strategy
Innovation
• Key factor for success!
• Product innovation: time line, privacy settings, spotify
• Integration  Focus on differentiation
• Learning Curves
integration,...
• Process innovation: new search engine (improved
algorithm)