Social networking company Facebook has experienced tremendous growth and development over the past decade. The new trends in the economy have shown that their stocks have increased to $38 from $17. Market values of Facebook are more than $200 billion. It has a price-earnings (P/E) ratio of 70.
With such growth tabulations more impressing growth is expected in future. Facebook Company has launched other platforms such as messenger, Instagram, WhatsApp, and Search. The already running platforms have the potential of becoming multibillion-dollar businesses (Trefis.com, 2014).
Facebook is one of the companies that stack up along Porter’s five forces. Social networking market is highly competitive and encounters rapid changes in technology. However Facebook has managed to fight the challenges of bargaining power of customers through continuously bringing new ideas, inventions and innovations to keep its customer satisfaction levels stable. The threat of new entrants in the market has been solved through having a low barrier to entry in the Facebook internet business environment, a situation that leads to intensifying competition within the market. Threats on substitute entry of new businesses in the market have been a major threat to Facebook Company. Internet usage is increasing with other investors bringing new and popular mobile application-ns such as Twitter, and dating social networking platforms like HTWE. Such applications can strongly affect Facebook popularity. The supplier bargaining power is also a challenge to Facebook Company whereby users are having a high potential of shifting to newer applications and sharing data and information through microblogging (Ovidijus, 2013). The suppliers of internet and network facilities are cheap thus making the cost of customers shifting easy and less demanding.
References
Ovidijus J., (2013). Porter’s Five Forces.
Trefis.com (2014) Facebook through the Lens Of Porter’s Five Forces.
Carolyn Morgan is the author of this paper. A senior editor at MeldaResearch.Com in Online Paper Writing Service.
