FACEBOOK CASE STUDY
By MTiPO:
Desiree Fabunan
Yee Han Kuan
Svyatoslav Mishchenko
Patrick Lin Ngai Lung
Wenhan Zhou
DECISION

Problem:


Proposed Solutions:
1.
2.
3.

Growth/Expansion Strategy
To Grow Internationally
To Enter Different Market Segments
To Concentrate On Increasing Per-User Revenue
Assumptions:
1.
2.
3.
4.
User base higher priority than revenue
Significant number of countries with small Facebook user base
Facebook has the capability and resources to localize
Growth is viral
2
SWOT ANALYSIS
Strengths
•
•
•
•
Truly compelling product
Continual viral growth
Virtually unlimited feature set
High user retention
Opportunities
• To grow internationally
• To open up different segments
• To concentrate on increasing
company revenue
Weaknesses
• Low revenue per user
• Currently only support English
(limited market)
• Inexperienced in overseas market &
culture
• High learning curve for new users
Threats
• Emergence of better social
networking websites
• Lose its appeal to users
• Privacy issues
• Financial threat due to impending
lawsuit (ConnectU)
3
ANALYSIS –ECONOMIC ANALYSIS
Improve Revenue
Source in Existing
Markets
Target New
Segment in
Existing Markets
ApproachExisting
New
Projected Number of Users
250,000
Products
New
New
International
Expansion
Existing
Customers
Number of Users (thousands)
Existing
200,000
150,000
100,000
50,000
0
2007
2008
2009
Year
No International
International (worst)
International (best)
4
Decision: To Grow Internationally.
HOW TO GROW INTERNATIONALLY

Challenge:
1.
2.

How to Grow in other markets
1.
2.
3.

It may find it hard to displace the dominant local competitors.
Local resistance to foreign culture.
Localization through Language
Spread Facebook through Evangelist
1.
Overseas Student
2.
Early Adopters
Use Bowling Alley Effect
Characteristic of a Suitable Initial Overseas Market
1.
2.
3.
4.
Competing Product is technically weak or clone
User base comfortable with Social Networks
Users verse in both English and their Mother tongue
I.e (Mexico, India, Sweden, Germany, France, China)
5
REALITY TEST
Risk
Mitigation Strategy
Contingency Plan
Severity
Probability
Market
Facebook does not gain To hire local talent to localize the
a foothold in overseas
website.
market
Target Initial Segment to
Students whom have are
returning from overseas studies
Establish a
High
partnership with
local social network
Medium
Team
Inexperienced in
oversea culture &
management
To hire someone with experience
taking a website internationally
Buyout local
Medium
networking website
High
Technology
Emergence of superior
social networking
website
Improve the facebook feature to
ensure it remains appealing to
the users
Adopt & learn from Medium
other competitors
Low
Financial
Substantial Marketing
Investment required
expanding into
overseas market
Improve advertising model.
Seek other
sources of
revenue
Low
Decreased in
revenue/user in
international market
High
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