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Facebook Case Presentation.Back in 2012, Facebook was struggling to transition into a company with a strong mobile presence. Those days are long gone. In a recent financial report, Facebook revealed that 80% of its advertising revenue could be attributed to mobile. In other words, of the $27 billion estimated sales revenue for Facebook in 2016. In other words of the $27 billion Facebook raked in during 2016, about $22 billion came from mobile advertising. COO Sheryl Sandberg said they were pleased with the growth. Sandberg shared that 98 of Facebook’s top 100 advertisers had also advertised on Instagram in the past year – a comment that suggests Instagram could be driving a good chunk of Facebook’s mobile growth.Although there are still growth opportunities in mobile advertising, there is concern that this growth opportunity is beginning to slow substantially. The majority of Facebook’s 1.59 billion monthly users are browsing the platform on mobile devices – 1.44 billion to be exact and the amount of mobile ads that users are exposed to may be reaching a saturation point. So, while Facebook can anticipate more growth from mobile, the company has recognized that they must focus on new, innovative sources of revenue to meet the company growth objectives. Facebook’s business model to date has been to generate revenue and profits primarily through advertising fees rather than subscriptions. It’s the same model used by the major TV networks. Useage rates for Facebook continue to grow more slowly with over 1.6 billion flocking to Facebook and spending more time on Facebook than any other site. However, its advertising revenue, while having grown substantially in 2014, 2015 and 2016, especially from mobile advertising, is pathetic relative to Google. In 2016 Facebook generated approximately $27 billion in sales revenue while Google generated over $88 billion. This case offers you an opportunity to be creative and to consider alternative strategies that could substantially increase revenues either from advertising and/or other innovative revenue generating sources that would still be acceptable to Facebook users. This is a real challenge facing Facebook today. Maybe your marketing skills will make you smarter than they are?Strategic Question: What should Facebook do to increase revenue in 2018 by a hefty 40% from an estimated $39 billion in 2017 to at least $54B in 2018?It is important that you define each alternative with enough clarity so that if you were made responsible for implementing the strategy, we would have a clear understanding of what you would be expected to do. Be sure that each alternative can stand on its own. Ideally, EACH marketing strategy alternative you consider should have the potential to satisfy your sales objective if selected without aspects of other alternatives required too. That means that you may have to package different combinations of tactical efforts within one alternative until you are confident in combination they have the potential to reach your sales revenue objective.As a result of your analysis and team decision-making, my suggestion is that you report your findings and recommendations as a Powerpoint presentation using PPT using 15-20 slides. Be sure to clearly organize, label, and address each section recommended in the suggested case format. That would include the following:Define the Marketing Problem or Opportunity (the Strategic Question)SWOT AnalysisIdentify Alternative Solutions (that are true either/or alternatives with sufficient detail to understand what you are considering as an alternative strategy)Analyze the pros and cons of each Alternative Solution (ideally after each alternative)Marketing Strategy Recommendation (one and only one alternative)Support for your RecommendationDesired Outcomes and Measurement (how will you measure success?)Here is a typical approach for conducting a comprehensive case analysis: (this is the format to use for your comprehensive TEAM case presentation for Facebook)Define the Marketing Problem or Opportunity – Decide on ONE key problem or opportunity or challenge that YOU are going to address by analyzing the information provided in the case or through your internet research. Things such as losing market share, declining sales, etc. are typically symptoms of a key underlying problem. There will typically be several problems or opportunities suggested in a case, but you must select one, and only one, that you determine to be most critical. Remember, this is a marketing course so although some issues may not be related to marketing, try to identify and stay focused on those that are marketing-related. Once you identify the most important or critical marketing problem or opportunity I strongly recommend that you describe it in the form of a strategic question. For example, if you determine that the company has an opportunity to increase market share because a major competitor is going out of business, try to define it and communicate it in the form of a question – What can we do to increase market share by 10% in our current domestic markets? By stating your goal or objective in the form of a question, it makes it very clear what you are trying to accomplish when considering your strategy alternatives. Evaluate the current situation facing the firmWhat are the internal and external factors that might influence marketing decision making? In essence, conduct a brief situational analysis and/or SWOT analysis relevant to the type of marketing decision that must be made. For example, if your objective is to grow your business by 10% next year the key elements of a SWOT analysis would be very different than if your objective was to increase awareness of your brand by 25% in the marketplace.Much of this analysis can come from either the case information provided but most likely will require outside research and review of articles and information on markets, customers, competition, environmental trends suggesting external opportunities and threats;, and company information suggesting strengths and weaknesses. A SWOT analysis is just a method of summarizing your situational analysis and should be limited to listing just key insights that might influence or help guide your decision making.For this case analysis you don’t have to spend a lot of time conducting research but hopefully you can conduct a cursory review of the situation facing the firm and be able to identify at least a few significant factors in your SWOT analysis. For example if you were trying to decide whether to develop and introduce a new product you might easily be able to determine that a key opportunity is a high growth exists in the product market, a strength might be the high brand loyalty that exists in the marketplace, another strength might be the financial resources that the firm can invest, and etc. If Apple were introducing a new virtual reality product offering, I suspect these three examples plus more could easily be identified.Alternative Solutions – Once you have one clearly defined objective or strategic question and you have analyzed the situation facing the firm, you then develop alternative marketing strategies that might be used to address the question and thus solve the problem, capitalize on the opportunity or successfully address the key challenge facing the firm. Normally there is more than one way a problem can be solved or an opportunity pursued. That is why marketing, unlike accounting, is not black and white. Usually there should be no more than three to five viable alternative marketing solutions to consider. Keep in mind that sometimes one alternative might be to keep doing what they are doing now.Clearly describe each alternative marketing strategy being considered in as much detail as possible and include key tactical decisions to support that strategy. Check to be sure that each alternative strategy specifically addresses your strategic question and not some other marketing problem or opportunity. For example, here are some alternative strategies that could be considered when addressing the strategic question mentioned above – What can we do to increase market share by 10% in our current domestic markets? Pursue a market penetration strategy by increasing advertising expenditures and launching a major nationwide advertising campaign to build greater brand awareness and interest.Pursue a market penetration strategy by doubling the size of the sales force in order to call on more retail accounts and to increase the number of retailers carrying our product.Pursue a product development strategy by expanding the number of product variants offered in the product line.Pursue a conglomerate diversification strategy by acquiring a new business not related to our core business that has great potential for growth.Are these all viable alternatives that might have the potential to increase market share by 10%? No! The last strategy alternative, while perhaps a viable growth strategy, does not address how you can increase market share in your current markets. A diversification strategy implies that you are planning to compete in a new market with a new product so that wouldn’t be an alternative for increasing market share in your current market. Marketing strategy alternatives are best if EACH is self-contained solutions that provide mutually exclusive options to address the strategic question.Analyze the Alternative Solutions – Try to come up with some key decision criteria that you will use to evaluate each alternative. Use the case material as much as possible to conduct your analysis. Don’t hesitate to use outside research data and your own experiences to analyze as well. You may have to make assumptions, but indicate when you are doing so. It might help to use a pro-con format but that is up to you.For example, you might try to objectively evaluate each alternative based upon the estimated revenue that could be generated with each alternative, the estimated cost of each, probability of success, opportunity to gain a competitive advantage, and other company resources required to implement each alternative successfully. The key to effective analysis is to be objective and use the same criteria across all alternatives as much as possible. Then you can add other pros or cons of each.Marketing strategy recommendation – Obviously the best solution is the one that balances sales opportunities with risks and costs of failure. “Get more information” or “Do more research” are NOT acceptable recommendations in this course. You need to make decisions based upon the facts you have or have gathered online. Your recommendation should consist of one and only one of your marketing strategy alternatives. Don’t make recommendations that were not already addressed in one of your alternative solutions.Your objective is to select what you determine to be the BEST alternative available if you only had the resources to implement one. Sometimes, your other alternatives, if implemented, might be successful too. Sometimes your alternatives might truly be either/or alternatives where the decision involves only one logical choice. Regardless of the situation, be sure to only make the BEST marketing strategy recommendation.Support Your Recommendation – Clearly explain to management why you selected this alternative over the other alternatives and why you think it will best solve the problem or capitalize on the opportunity. Convince the President!Desired Outcomes and Evaluation - Briefly, what are the desired outcomes from implementing your strategic recommendation and how will success be measured? For example, the desired outcome might be to successfully launch a new product in the marketplace and the method of measuring success is whether the new product launch meets or exceeds revenue projections for the first year sales. The desired outcomes must be measurable.
Solution: Facebook Case Presentation