Analyze the Online Social Networking Industry

Topics: Social network service, Facebook, Twitter Pages: 3 (991 words) Published: May 20, 2012
Analyze the online social networking industry
Online social networking has become one of the buzzing word in today’s world. It has changed how people connect, express their views and communicate with each other without any geographical barriers. With technology and services in social network platform like location based social networking combined with mobile application more and more users are using social networking. According to recent research from comScore back in 2007, social networking represents about 1 out of every 12 minutes spent online, while today it accounts for 1 out of every 6 min spent online. Funder Mifflin Inc. needs to closely understand competition in social networking industry to well establish itself in the global market. The Porter's five Forces of competition analysis model will help Funder Mifflin to understand its strengths and weakness and how it can improve itself to fair well in the market. Porter’s Five Force’s

1.The degree of rivalry between existing competitors
2.The threat of substitutes
3.The bargaining power of buyers
4.The bargaining power of suppliers
5.The threat of entry of new competitors
Five Force Model for Social Network Industry

Competitors: One of the major threat in social network industry is competition among existing players, for instance in December 2008 Myspace saw peak number of unique users 75.9 million compare to Facebook 54.5 million users at the same period but by May 2011 Myspace saw a drop of 50% of visitors (34.0 million), with its new application and design Facebook overtook the market share from Myspace and saw 157 million unique users in the same period. Funder Mifflin Inc needs to analyze few aspects like who are the competitors? What kind of service they are providing to users? Who are target group (users)? What kind technology they are using? Substitutes: There is constant threat of substitutes in social network industry with new application...

References: a)
b) Contemporary strategy analysis 7th edition (Robert M. Grant).
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