Facebook, Strategic Management Analysis

Topics: Natural environment, Facebook, Social network service Pages: 8 (2644 words) Published: July 21, 2013
Business Policy and Strategy

Case Based Component Paper #1

Environmental Scanning


Samantha Stephenson


An environmental scanning refers to the process that systematically uses information about trends, patterns and relationships within an organization’s internal and external environment to determine the future direction of the organization. Through an understanding of the nature and speed of changes in that particular environment, an environmental scan is likely to help identify possible ventures, challenges, and developments that are important to the organization. An organization that could benefit tremendously from strategic planning and especially environmental scanning is Facebook. Facebook is a social network organization that is considered the largest online network in the world (Piskorski, Eisenmann, and Smith, 2013). According to these researchers Facebook reported $1 billion profit in revenue, with 85% of this revenue coming from advertising. However since we are living in an era where technology is constantly upgrading and competition is fierce, it is vital that the managers of Facebook stay abreast of the competition by conducting environmental scanning to determine the trend and weaknesses of the organization to prevent strategic surprises. As competition increases in a particular industry, changes become swifter in the external environment; consequently, information from the external environment contributes important elements to the effectiveness of the long-term plans. In an external analysis of Facebook, three correlated environments are relevant:

Natural Physical Environment

According to Wheelen and Hunger (2012) the natural environment includes physical resources, wildlife, and climate that are a fundamental part of life on earth. It is obvious that in recent years the regularity and severity of storms, tornados, hurricanes, and other extreme weather events have increased in the United States and worldwide, and this trend is likely to continue. Pine (2011) informed us that increase in natural hazards and the rising of sea-level are expected along the coastal areas, therefore it is necessary to understand the nature of coastal natural, social, and economic environments and their interactions in guaranteeing a sustainable future. In the case of Facebook, extreme weather events could result in loss of Internet service, breakdown in telecommunication infrastructure, lifestyle changes, and regional shift in population.

Although the loss of Internet service and breakdown in telecommunication infrastructure due to inclement weather may be perceived as threats to the organization; lifestyle changes and regional shift in population may reveal opportunities for Facebook. A scan of the external environment may lead to the creating of more modern system that is in-tune with the needs of the population. With the movement of people, Facebook media may be used to locate missing relatives and friends. A shift in population could result in an increase in the younger more tech-savy generation who view Facebook as a way of keeping in touch with others. Since mobile phone reception system may experience overcrowding during this time, Facebook could capitalize on this situation to use its “friends and family” network to keep others informed of storms and inclement weather events. Through an environmental scan, the managers may realize that planning is needed to extend their network to accommodate the movement of the population. A scan may also reveal weaknesses in infrastructure that could be modified ahead of weather-related crises to minimize the length of time consumers are out of service where weather situations are predicted but cannot be prevented. Although these factors may present threats to the stability of the organization, there are areas that may be presented as opportunities.

Societal Environment...
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