SWOT analysis of Facebook

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SWOT analysis of Facebook

This article is about a detailed SWOT analysis of Facebook. It examines the strengths and the weaknesses of Facebook. It also examines the opportunities and the threats facing the company. Facebook is a California-based online social media and social networking service company. Mark Zuckerberg and co-founders Dustin Moskovitz, Chris Hughes and Eduardo Saverin launched Facebook on February 4, 2004. Mark Zuckerberg is the current Chairman and Chief Executive Officer of the company.

Strengths of Facebook

It goes without saying that Facebook is the biggest social media network on the Internet, both in terms of brand recognition and total number of users. As of March 2018, Facebook has 2.20 billion monthly active users (Facebook, 2018). In addition, millions of businesses of all sizes use Facebook for advertising purposes.

Facebook is one of the largest companies in the world by market value. The market value of the company in 2018 is 541.5 billion U.S. dollars. Facebook has a strong financial position as well. Its revenue grew from 7.87 billion in 2013 to 40.7 billion US dollars in 2017 (Statista, 2018). It is worth mentioning that most of Facebook’s revenue comes from advertising.

Facebook is an extremely versatile social networking site. What can you not do on Facebook? Connecting with friends and families, exchanging messages, sharing photos, links, and videos, receiving notifications of the activities of others are some of the things you can do on Facebook! In fact, the list of what you can do with Facebook is quite big!

Rapid expansion is a strength of Facebook as well.  Facebook has taken over a number of big and small companies including WhatsApp and Instagram over the years. These mergers and acquisitions have helped the company increase its span of operations even though the costs have been very high.

Weaknesses of Facebook

Facebook got caught up with a number of controversies over the years. For example, recent data breach has affected millions of users. Facebook admitted that the personal information of up to 87 million users may have been improperly shared with political consultancy Cambridge Analytica (The Irish Times, 2018). Facebook has also been accused of not having a rigorous control on fake news, hate speech and depictions of violence.

While advertising is the main source of revenue of Facebook, the click-through-rate (CTR) is a problem. Compared to many major websites, Facebook has a lower CTR. In addition, many advertisers allocate a relatively small advertising budget for Facebook.

Opportunities for Facebook

Facebook has completed a number of mergers and acquisitions over the years. For a company like Facebook, opportunities for inorganic growth through mergers and acquisitions are always out there. Likewise, Facebook has the ability and opportunity to increase the number of active users. Another opportunity will be adding new features to the site that can increase the number of users and the frequencies of use.

Threats to Facebook

Threat is the last element to address in the SWOT analysis of Facebook. Unsurprisingly, a good number of social networking sites have already come into the market challenging Facebook. Twitter, Google plus, Linked In, Tumblr, pinterest, Snapchat, and Flickr are some of the competitors of Facebook. However, it is worth mentioning that the social networking sites currently available are not anyway near to Facebook, particularly in terms of brand recognition and number of users. Other threats to consider are cyber crimes, legal challenges, and other online vulnerabilities.

Hope the article on the SWOT analysis of Facebook has been useful. You may also like reading:

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Last update: 19 June 2018

References

Facebook (2018) Our History, available at: https://newsroom.fb.com/company-info/ (Accessed 18 June 2018)

Statista (2018) Facebook’s annual revenue and net income from 2007 to 2017 (in million U.S. dollars), available at: https://www.statista.com/statistics/277229/facebooks-annual-revenue-and-net-income/ (Accessed 18 June 2018)

The Irish Times (2018) Facebook data breach affected up to 87 million users, available at: https://www.irishtimes.com/business/technology/facebook-data-breach-affected-up-to-87-million-users-1.3450735 (Accessed 17 June 2018)

Photo credit: Pixabay

Author: M Rahman

M Rahman writes extensively online with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He is a graduate of Leeds Metropolitan University and London South Bank University.