In-Depth SWOT Analysis of Facebook | Strengths Weaknesses Opportunities & Threats

About Facebook

Facebook is a worldwide internet-based social network, with over 900 million users worldwide. It was founded by Mark Zuckerberg, Eduardo Saverin, Dustin Moskovitz, Chris Hughes, and Andrew McCollum in 2004.

The company moved its headquarters to California in January of 2006, after being headquartered in Silicon Valley for most of its early years. The founders started with a group called the Harvard Connection, located at the Harvard University dormitories. They then transformed into a networking site called Thefacebook.

After finishing their degrees, they met and began working on improving Thefacebook into a full-fledged social networking site, resulting in the creation of Facebook, which was launched on February 4th, 2004. Facebook’s revenue in 2011 was $3 billion.

After a record-breaking initial public offering (IPO) in February 2012, Facebook became a public company. Facebook is the most popular social networking site, with over a billion active users.

The company has been accused of being a cause of cyberbullying in some countries, affecting its popularity among teenagers.

Facebook has also been accused of censoring users from certain countries and for the United States government to use Facebook to spy on its citizens.

Despite these setbacks, Facebook still enjoys immense popularity worldwide. It was estimated that Facebook earned revenue of $40.63 Billion in 2017 with over 2 billion users in the same year.

Despite the increasing success of TikTok and Instagram in 2020, Facebook continues to expand. In fact, in 2020, more than 2.45 billion people will log on to Facebook each month.

The overall revenue of Facebook increased from $7.87 billion in 2013 to $86 billion in 2020.

SWOT Analysis of Facebook

Facebook Strengths Analysis

#1 An excellent user experience. The features on Facebook’s application easily link the website and smartphone users, have several platforms on which it can run, and it integrates itself, it translates into over 111 languages, and is mobile- Facebook is straightforward to use and is open to connecting users on multiple platforms, and translations for both occur over 111 languages.

#2 The social network has a large user base with many active users as well. A large population has the ability to make a larger user base, and the network’s popularity proves this among teenagers. The site will only continue to grow in popularity as more teenagers become active users.

#3 Leveraged Marketing: Facebook makes it easy for businesses to market themselves on its platform, possibly leading to greater revenue if the companies do not need any outside advertising support.

#4 Open & free platform: The strength of the social networking sites is that they are open. It gives consumers easy access to communicate with friends and family all over the world. Corporations can be more effective when they are communicating with a large group of people, rather than only those in one country or city.

#5 Strong competitive advantage. Facebook has a strong competitive advantage over other social media sites. Since they started, they have competed against other social media companies with increased marketing abilities and a large user base.

#6 Facebook holds a strong brand.  Facebook logo is one of the most recognizable logos in the world and has been around for years. They also have a strong intellectual property that people love with its Facebook page. Many people have spent their time on Facebook creating their status updates and sharing photos and videos with all their friends. This is one of the biggest reasons behind Facebook’s success.

#7 Another most obvious opportunity for Facebook is that it is globally the most popular social networking site. It has been able to reach over 3 billion people and has established itself as a cultural catalyst. The fact that it is so widely used means that there are many ways to market a product to these users, and if they become influential in some way, this can have a huge impact on other products.

# 8 Increasing demand: The demand for Facebook users in developing countries is high due to its accessibility through mobile devices and its simplicity of use. This has aided Facebook to expand to many places in the world that would not have had access to it otherwise.

Facebook Weaknesses Analysis

#1 Many Criticisms: Many people have highly criticized the application for being a source of cyberbullying, which could damage its reputation and result in lost revenue. These criticisms could be a leading factor in the company’s financial decline in the future.

Facebook has also been accused of being a cause of cyber-bullying, where it is used as an outlet to silence or to cause bullying, with the new feature “that’s so funny” where users are able to turn on an automatic function and tell people whom they want to be quiet for ten minutes.

#2 Facebook is also faced with problems of censorship on its site. The company has been accused of boosting certain posts based on its agenda and blocking posts from certain countries, resulting in a loss in revenue if the issue continues.

#3 Many Allegations:  There are also allegations of the United States government spying on citizens through Facebook. The government could use this information to gain an advantage over other countries, resulting in a decline in the user base for Facebook, thus hurting its revenue and reputation.

Facebook Opportunities Analysis

#1 There will always be an advertising opportunity: Despite the decline in revenue, advertising will always be a large part of their business model. Facebook has an established brand that they can continue to leverage for their advertising power. For years, Facebook has been the most popular choice for social networks, so it is expected that the same trends will continue forward

#2 Expansion: The company could expand the number of people it can socialize with by adding more Facebook users. With more users, Facebook will be able to reach a larger number of potential customers.

#3 Another opportunity for Facebook is to use an activism tool to pressure governments for action. This could lead to an increased in government responsiveness, which would be shared with the social network. However, the opportunity may not be utilized by the government due to negative publicity around Facebook.

#4 More companies are advertising on Facebook: Facebook is in a strong position and can be purchased by other social media companies who need a bigger presence.

#5 Facebook will still remain the largest social media company: There is no reason people stop using Facebook anytime soon. The network effect of the business will keep them at the top of their field.

Facebook benefits from the network sharing effect, which creates positive feedback loops that reinforce growth in the number of users.

#6 Facebook is in a dominant position in the social networking industry. They are able to leverage their large user base to leverage their advertising power and clients’ internal business interests. With Facebook, a company can easily target its audiences and has instant access to them.

#7 Facebook is not only a social media company but a business. This business has two main areas of focus: advertising and sales. The revenue per user as a whole is declining, especially among the younger demographic who do not want to spend money on their social networking sites.

However, the trend will likely change as more companies begin to market on Facebook in order for it to grow more rapidly.

As stated above, advertising is an integral part of their revenue model. This could be increased from both internal and external sources.  Facebook needs to figure out a better way to make money from Messenger: The messaging service is one of the most popular features on Facebook, but it is not generating enough revenue for them.

#8 increase security features: One of the biggest opportunities for Facebook is the ability to place and increase security on their site. There are still many people who do not have a real need for a social media account, and it is assumed that there are more out there than they are aware of. For these people, Facebook could become an easy way to join and get their friends involved in whatever they have going on.

#9 Video & Live streaming; Another huge opportunity would be the increasing capacity every social media website has to provide video feeds. Most users are tired of the same boring ways that they are able to post videos, and this opportunity would allow Facebook to stand out from its competitors.

#10 More customized features: The biggest opportunity Facebook could provide would be through being able to bring a new feature that no one else could. This was the reason behind many of their features, which helped them succeed so quickly when they first started.

#11 Facebook is being pushed to be more collaborative: The product market has been changing in the last few years, and more collaboration is expected.

Facebook Threats Analysis

#1 In some countries, such as Russia and China, there have been accusations of censorship. Facebook is accused of censoring its users and for blocking their access to certain websites while allowing access to others.

#2 Facebook has had issues with privacy: Consumers have always been concerned about information that the company is collecting on them and how it is used. It is going to be very hard for Facebook to continue expanding both internationally and domestically without facing backlash from the public due to privacy concerns

#3 Facebook’s revenue per user is declining: With many other social networks on the rise and people spending less time on Facebook, revenue per user falls every year. Facebook’s revenue per user has been declining for a while now. However, this is largely from the ever-increasing competition in the social media industry.

#4 Facebook has always faced a lot of challenges from critics. They have faced lawsuits, controversies, and even backlash from consumers regarding their privacy policies. This hasn’t dampened their growth in any way, and they continue to grow at a steady pace.

#5 Competitors & Facebook’s business model is being threatened by new social networking sites such as Twitter, Tiktok &Pinterest.  It is claimed that Pinterest has a superior user experience and that its search engine will make it the next big thing in technology.

Twitter, for instance, has been forcing people on its platform to create profiles for themselves instead of creating one on Facebook. This has caused many users to use both platforms as their best option.

#6 Escalating Activism: Facebook is at risk due to its involvement in the activism programs like Arab Spring. Due to the region being plagued with instability, people are using Facebook in order to communicate with each other and find out more about what is going on in their countries.

Many activists use Facebook to organize themselves, which has been reported to cause the platform to be used by people who are against the government and those who support it. This will put a damper on Facebook’s popularity due to the involvement of governments and politics.

Conclusion

After taking all of these factors into consideration, the conclusion may be that while Facebook does have a significant number of weaknesses in its operation as of now, the company has a few opportunities that would be able to assist it in continuing to grow and prosper.