SWOT analysis of Facebook
The best known fact about Facebook is its number one position as a social network. The network of 1.5 billion visitors is most popular among the social media users. Number of visitors on Facebook has grown faster than any other social networking site. Apart from it Facebook’s revenue from ads has also grown fast. In this area, Facebook emerged as a powerful competitor to Google. It also made a number of useful acquisitions to further extend its brand presence and to grow its membership.
Instagram and Whatsapp are two of the most well-known names it has acquired. There are several reasons that it is the most favored social network of the millenials. Its like and share and other features are better than most other social networks. However, the brand has also faced a few issues related to privacy in the recent years. The Year 2015 ended on a strong note for the social media giant. Apart from high profits and revenues, it saw a sharp growth in the number of users worldwide.
Name of CEO: Mark Zuckerberg
Competitors: Twitter, VK, Google plus, Linked In, Tumblr, pinterest, Snapchat, Flickr
- FACEBOOK SWOT ANALYSIS
Strengths:
- A well known brand name
- A series of valuable acquisitions related to social media and marketing.
- Very high number of users.
- Most popular among social networking sites
- Growing ad revenue
Facebook’s strong position in social media world is based on a well-executed strategy. The brand has enjoyed very high popularity right since its release. Over time its popularity graph has risen fast. Apart from being the favorite of its users, it has become the favored choice of the marketers. In this regard Facebook made a number of acquisitions that have proved valuable and added to its large user base. The size of its user base is about 1.5 billion. In the series of valuable acquisitions made by Facebook, most well-known names are WhatsApp and Instagram. Facebook also acquired Oculus VR, a leader in virtual reality technology.
The Moves App by Facebook is like an automatic diary that records how much somebody moved during a day. It is a pedometer that records how much a person walked a day and helps at keeping one’s fitness record. While its total revenue was 5.8 billion for 2015, 5.63 billion of it was from advertising. This was better than what WallStreet had estimated. Particularly, the brand’s performance in mobile ads was very strong.
Weaknesses:
- Weak conversion rate of ads
- Heavy reliance on ad revenue
- Privacy issues
The click through rate of Facebook ads is low. Compared to it, the performance of Google adwords has remained better. While Facebook has a large audience to offer, Google adwords is still considered a better option for the marketers. Moreover, Facebook’s main source of income are the online ads. It does not have another major stream of revenue. In the past it has also faced issues related to user privacy. While it has updated its privacy policies, the personal information posted on Facebook might still be vulnerable.
Opportunities:
- Growing number of mobile device users
- Increase income through complete monetization of instagram and whatsapp
- Diversification
The growing number of mobile device users presents a major opportunity for Facebook. Its revenue from mobile ads has grown sharply in 2015. Mobile ads constituted for 80% of the total revenue Facebook generated from ads. Since the number of mobile devices users is growing every year, Facebook’s revenue from the mobile ads might keep growing. Apart from that the income of Facebook could also grow by monetization of Instagram and Whatsapp. Diversification could also be a great option for Facebook to increase its revenue. If the products from Ocular were to grow popular in the future, this could provide Facebook with new sources of revenue.
Threats:
- Growing use of adblocks
- Strong dollar worldwide
- Data breaches
- Heavy competition from Google and other social networking sites
The growing use of adblocks can be a threat for Facebook’s revenue. A few years ago it cost Facebook heavily, resulting in a severe loss of revenue from desktop ads. A stronger dollar worldwide also affects Facebook’s revenue and profits. Data breaches are another major threat before it. Recently, it started efforts to ramp up the security and started requesting users to reset passwords. Another major threat before the social media giant is the severe competition it faces from Google’s adwords as well as the social networking sites. Google still reaps the lions share in online ads. Other social networking sites like Twitter are also making efforts to grow their share in online ad revenue.
Recommendations:
The growing use of mobile devices could be a highly profitable trend for Facebook. Its share in mobile ads has grown and with that its total revenue and profits as well. Monetization of Instagram and WhatsApp could also bring extra revenue for the social media giant. Apart from it, Facebook can try diversifying into new lines of business to reduce its reliance on ad-revenue.
Check out the swot analysis of other top brands: Pepsi, Coca Cola, Google, COSTCO, Apple, Nike, Walmart, Microsoft, Toyota, BMW, Dabur.