Facebook, Strategic Management Analysis

Topics: Natural environment, Facebook, Social network service, Environment, Environmentalism, MySpace / Pages: 11 (2644 words) / Published: Jul 21st, 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

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