SWOT Analysis of Facebook: How has it survived for so long?

PESTLEanalysis Team
PESTLEanalysis Team
Table of Contents
Table of Contents

A SWOT analysis of Facebook means examining the strengths, weaknesses, opportunities, and threats affecting the company.

A SWOT analysis of Facebook means examining the strengths, weaknesses, opportunities, and threats affecting the company. It currently remains the King of Social Media with over 2 billion monthly active users, despite repeated controversies over the last year.

How has it survived for so long? And will it continue? This SWOT analysis answers those questions and more.

Strengths of Facebook: The largest social media platform in the world

Facebook remains the leading social media platform in the world. Once just a way for college kids to stay in touch, Facebook is now home to profiles from people of all ages. On one side, friends and families share their lives through statuses and comments; on the other side, businesses sell products through Facebook ads and sponsored posts.

Just placing second behind Google, Facebook is the leading social media platform for advertisements. In 2017, Facebook’s ad revenue hit close to $40 billion US. Since Facebook has such a vast audience, it makes sense that it’s the prime location to buy ads compared to less popular platforms like Twitter.

Facebook ads are so popular, consulting and marketing firms specialize in the creation and deployment of these ads. Facebook further encourages ad usage through courses on how to create your own Facebook ad campaign.

Facebook is also the father of several other platforms and products including Instagram and WhatsApp Messenger. Each has their own strengths; Instagram is a platform to share videos and photos; WhatsApp is a texting and calling app with end-to-end encryption to safeguard the privacy of messages.

Considering both of these platforms have millions of active daily users, it’s no wonder Facebook bought and cultivated their growth over the years. Now, to capitalize on this vast user outreach, Facebook is considering bridging messaging platforms (combining Instagram direct messages, Messenger, and WhatsApp) into one single messaging app.

In only a few years, Facebook’s popularity has skyrocketed. The number of active users is over 2 billion and still rising. This remains a strength even despite the major controversies surrounding CEO Mark Zuckerberg.

Weaknesses of Facebook: Loss of stocks, users, and faith

A rising problem for all technology-based companies is data breaches and privacy concerns. Facebook’s name is never too far behind in any of these articles.

In 2018, Facebook hit headlines for data management issues. The company missed revenue goals as users slunk away from the platform. Stocks plunged. And the adoption of the GDPR bill in Europe cost Facebook many European users. Fortunately, the user base in the United States and Canada has remained mostly unchanged.

You can imagine how Facebook’s brand image has tanked with all these controversies. It’s opened eyes to how government parties barely understand data usage, the internet, and user privacy. Where are the policies to protect personal data? How far can and will Facebook go to harvest user information? These are questions many users ask on forums and even on the platform itself.

A tainted brand image is all it takes to destroy a regular business. Facebook isn’t regular though; it’s everywhere. Everyone uses it and for those that don’t, they typically have an Instagram or WhatsApp account. Still, Facebook hasn’t made much effort to regain a positive image. At this point, it’d be difficult if not impossible to achieve. Many users have lost faith not just because Facebook has been in the news a time or two (or ten), but because they haven’t taken any steps to rectify their issues.

Opportunities for Facebook: More acquisitions to reach new audiences

Facebook has diversified its user base by collecting Instagram and WhatsApp under its umbrella. It seems teens and young adults are more likely to frequent Instagram regularly than Facebook. And everyone from families to corporations use WhatsApp. This means Facebook has an opportunity to reach various audiences in different forms.

Facebook may wish to purchase other products in the near future. It has the funds to transform a product from nothing into something, as it did with Instagram. Initially, Instagram had no revenue when Facebook bought it in 2012. And now, seven years later, the platform is worth ten times what Facebook paid for. Facebook can achieve a similar feat with another product, so long as the product offers something different.

Additionally, the company has the opportunity to adopt new offerings on its platform to entice new target audiences. It can add features for older users and businesses. Although Facebook ads are popular, it’s not necessary for all business-types at the moment. Facebook will need to research more into this area to add value for all businesses.

Threats to Facebook: At the mercy of the competition

Just like any business, Facebook is susceptible to competition. Google remains the top ad choice. And Apple, Amazon, and Microsoft have the funds and ambition to keep Facebook on its toes.

Recently, Apple put a stop to the usage of early pre-release app versions of Messenger, Facebook, and Instagram. Why? Because it violated Apple’s terms of use. The beta versions were only to be used by company employees and yet Facebook was pushing these versions out to the public. Clearly, Apple still has sway over the production and usage of Facebook’s critical apps.

Because of data breaches and governmental parties taking a deeper look into internet privacy, regulatory pressures on internet businesses is at an all-time high. Because of the earlier controversies, Facebook is likely the company under the most scrutiny. One wrong move and it’ll wind up in another viral article.

As the amount of users has grown, so has operational costs. The cost of revenue has risen sharply since 2015 — over 40 percent since 2017. The company requires more technical infrastructure to keep everything running smoothly. Users expect Facebook to be operational 24/7, 365 days a year. Should the website drop, not only will it cause a flurry of emotions, it’ll also lead to a drop in profits for the company.

SWOT Analysis of Facebook: Conclusion

Everyone knows Facebook. Either you’re on it or someone you know is. Even if you don’t use the platform itself, you may still use the Messenger app, WhatsApp, or Instagram. All three programs belong to Facebook. And this begs the question, can you really escape Facebook’s influence?

Businesses use Facebook and Instagram Ads; family uses Messenger and WhatsApp to stay connected. Despite the dozens of privacy controversies surrounding CEO Mark Zuckerberg, Facebook remains the top social media platform in the world — whether it should remain King of Social Media is still up for judgment.

Photo by Tim Bennett on Unsplash

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