Facebook, Inc. is an American multinational company that focuses on social media and technology. Its headquarters are in Menlo Park, California. It was found in 2004 by Mark Zuckerberg while he was studying at Harvard along with a few other friends. The social media website was initially launched on the campus only and slowly spread into other colleges, outside of colleges, across the United States, and then into other nations. Facebook is one of the four large technology companies in the world. It is also one of the world’s most valuable companies (Facebook, 2018). Over the years, the company has acquired various other social media platforms such as WhatsApp, Instagram, and others. In 2018, the company earned a revenue of $55.838 billion and had more than 43000 employees (Facebook, 2019)
Following are the four dimensions of the Ansoff Matrix for Facebook:
Market Penetration
Market penetration strategies aim at promoting current products in current markets. Current markets hold great value for Facebook. The first strategy that Facebook uses is strategic alliances with telecom companies across the globe to provide data packages that motivate their users to increase their use of Facebook. The various functions and services of Facebook are also shared through ads in front of current users while they are online. Another strategy that Facebook uses is that it acquires various other social media platforms to gain greater market share. As it acquires these fellow companies, its number of users also increases along with profits. The company also works to improve the services it offers on its social media platform to motivate current users to increase their use. It also offers various discounts to business users that use Facebook ads services. The leadership of Facebook also actively participates in social activities to improve company reputation. All of these market penetration strategies work to increase the dominance of Facebook in the social media industry.
Market Development
Market development is done through the introduction of existing products in new markets. Facebook is already being used in almost every country in the world. Therefore, geographic expansion into new markets is not an option for Facebook. Facebook develops its markets by launching new products that target new market segments in its existing markets. It works with governments to help more people gain access to the services of Facebook. It offers various apps, online features, and other functions that make it attractive for new segments. It also offers different pricing policies for corporate users to motivate them to use Facebook ads for their business marketing needs. These efforts help the company gain more revenue.
Product Development
When new products are launched in existing markets, it is called product development. The research and development teams of Facebook are highly active and often launch new products or functions that make Facebook even more attractive for users. For example, it launched its app, its messenger services, the new layout of the Facebook website, and various other products from time to time. The new products are designed to attract more users and advertisers helping the company gain viewers and revenue (Greenspan, 2018). The various products the company already offers are also improved regularly to enhance user experience. The web and app development teams of Facebook make use of user data and create changes and new products that are designed to meet consumer needs and desires. These are technological changes to the website and its functions that play a vital role in the development of Facebook as a social media platform. The innovations are often creative and interactive forcing users to appreciate them. All of these activities lead to company growth and improvement in revenues.
Diversification
The company has already diversified into various services. It acquired WhatsApp and Instagram to dominate the calls, video, and image social media platforms. It acquired Oculus VR to enter into the virtual reality technology industry. All of these diversification efforts complement the social networking services the company offers. The company can also further diversify horizontally by steeping into consumer electronics, software, and various other industries. These hold great potential for the company to gain further success. It can also diversify into unrelated industries such as shoes, apparel, textile, broadcasting, and so on. The successful brand name and strong cash flows can help the company succeed.
References
Facebook, 2018. Give people the power to build community and bring the world closer together. [Online] Available at: https://about.fb.com/company-info/ [Accessed 08 Jan. 2020].
Facebook, 2019. Facebook Reports Third Quarter 2019 Results. [Online] Available at: https://s21.q4cdn.com/399680738/files/doc_financials/2019/q3/FB-Q3-2019-Earnings-Release.pdf [Accessed 08 Jan. 2020].
Greenspan, R., 2018. Facebook Inc.’s Generic Strategy & Intensive Growth Strategies. [Online] Available at: http://panmore.com/facebook-inc-generic-strategy-intensive-growth-strategies [Accessed 08 Jan. 2020].