Research Portfolio. Facebook Venture into Crypto-Currency (Essay Sample)
3. Assessment Task 3 - Research Portfolio (1200 words)
Assessment Task 3
The purpose of Assessment Task 3 is to have students undertake a strategic analysis that demonstrates an understanding of strategic principles and the application of strategic methods of analysis.
The task will be assessed within the following sub-tasks:
1.A background to the study
2.An analysis describing the external environment in which the organisation operates;
3.A discussion of the latest and most public venture in which the organisation is involved;
4.An explanation of the barriers to entry for the organisation in this venture;
5.An analysis comprising your considered position regarding the potential for the success of this venture.
Engagement with the Body of Knowledge must be demonstrated:
1.There must be at least onerelevant reference from a peer reviewed journal article per 150 words, with a minimum requirement of 8 references;
2.No article may be referenced more than twice;
3.The subject text book must be referenced at least twice.
Discuss Facebook's current strategic positioning and its proposed venture into crypto-currency. In your discussion, explain the barriers to entry Facebook will encounter.
You are to provide in approximately 1200 words (+/- 10%):
1.An introduction and background to the study;
2.A section titled - Facebook External Environment;
3.A section titled – Crypto-Currency Strategic Intent;
4.A section titled – Crypto-Currency Barriers to Entry;
5.Conclusion to the study
The bibliography, title page, and any diagrams or models are not considered within the word count for this item.
Facebook Venture into Crypto-Currency
Date of Submission
Facebook Venture into Crypto-Currency
Social media platforms have gained tremendous momentum for the past two decades, providing people all over the world with sites to interact and exchange various ideas at reduced fees. While there are several social media platforms, Facebook Inc. has managed to outcompete its rivals such as Twitter Inc. and LinkedIn Corporations, in terms of the number of users and revenue. Hanson et al. (2016) suggest that a robust business strategy gives a company a competitive edge over its rivals. Facebook business strategy emphasizes the use of market penetration as the main tool to move the business to the next level. Besides, the company uses merger approach to expand its presence in different segments and platforms, which has further boosted its revenues. For instance, it has acquired various social media platforms such as WhatsApp, Instagram, and Oculus over the past few years. The company is also diversifying into other areas such as crypto-currency with the aim of providing financial services to its users all over the world. The current paper examines the external environment in which Facebook operates and its crypto-currency strategic plan.
Facebook External Environment
There are several external factors such as politics, economy, social, and legal affecting how Facebook operates its business. Political factors such as freedom of speech, political stability, and human rights, among others, have a huge influence on how Facebook operates in different countries (Koshy, 2013). These factors affect the company either directly or indirectly. In some countries such as China and Arab nations, Facebook has faced a number of political obstacles that have had an adverse impact on its operations. Some governments are accusing Facebook Inc. of providing people with a platform to perpetuate political propaganda. Millions of people all over the world use Facebook and other social media platforms to voice their disagreement with the government’s corrupt practices and poor policies. For instance, the Chinese government blamed Facebook for the Urumqi riots because it believed that activists used the platform to incite violence. Following this, the company’s operations in China were shut down in 2009 (Zucchi, 2019). Besides, political stability in various countries affects how the company operates. Thus, social media platforms operate in a highly tense political environment compared to companies in other industries.
Facebook business is also affected by economic factors such as strengthening and weakening of the US dollar. For instance, strengthening of the US dollar has a negative effect on Facebook revenues as a result of the global scale of its business. Studies indicate that economic factors may influence the survival of a business (Hanson et al. 2016). Moreover, the income of social networking platforms is affected by tax rates, inflation, human resources costs, and the overall macroeconomic climate in a given country. Similarly, advertisers in different industries use social media platforms to promote their brands, which means that Facebook earns huge revenues from these marketers. A favorable economy will promote establishment of more companies, which will have a positive effect on Facebook’s revenues and vice versa.
In addition, a number of social factors affect how Facebook operates its business across the world. Unlike in the past, more and more people, including middle-aged are now using smartphones (Cha, 2010). Furthermore, the number of people using smartphones is expected to rise significantly in the next ten years. Consequently, Facebook has massively improved its income a...
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