This thesis is a critical analysis of Facebook’s business model with the aim to develop the future strategy of the company. Facebook is a social network, which is a new type of company with few examples of how to develop and cope with challenges. Facebook has been able to gather 1.1 billion users and is the biggest social network in the world, which gives them a big potential if they can monetize their users, however Facebook has not been able to monetize their many users effectively yet, and need to do so in order to realize their potential as a company. This thesis aims, to research how Facebook through the perspective of business model theory can develop their current strategy and actualize future opportunities for development. In order to research Facebook’s business model, it is first established what business models are and how they can be used to develop a future strategy. This is done through analysis of the business model concept. Business model is often used as generic term, however the analysis of the academic literature shows that the usage and meaning of the term is disparate. Therefore, the concept is further defined as the rationale of how an organization creates, delivers and captures value. The analysis of the business model concept further shows, that the concept has some challenges as an analytical concept, since it is always seen as in relation to strategy. The problem is solved with the introduction of strategic contingency, which induces the concept with abilities to actualize future strategic opportunities for development. A critical analysis of Facebook’s business model shows, that the users of Facebook create network effects, however Facebook cannot be seen as a pure multi-sided platform, since their platform does not create network effects between their user and advertiser segments. Furthermore the analysis shows, that Facebook are vulnerable to several factors, and need to cope with these, in order to be successful in the future. Facebook’s main challenges are identified and reduced to three main challenges. In order to cope with these challenges, there are introduced four strategic alternatives, which copes with one or more of the future challenges, and further develops Facebook as a company. The suggested strategic alternatives are: 1) Re-targeting marketing 2) Hardware production 3) E-business platform 4) Online payment platform.
|Educations||MSocSc in Political Communication and Managment, (Graduate Programme) Final Thesis|
|Number of pages||89|