PowerPoint

Running head: STRATEGIC MANAGEMENT AND COMPETITIVENESS 1

STRATEGIC MANAGEMENT AND COMPETITIVENESS 9

External and Internal Environments of Twitter

KaToya Jones

Dr. Wanda Tillman

Business Administration Capstone

January 28, 2018

Segments of The General Environment That Would Rank Highest in Their Influence of Twitter

Twitter, Inc just like all other business organizations have the same general environment. The general environment consists of the technological, economic, socio-cultural and political, and legal trends that influence a business decision. The general the environment is sometimes referred to as the Macro-economic environment. The general environment consists of forces that exist outside the organizational control, which has a potential to either affects the organization positively or negatively. This means that a company like Twitter has to keep constant watch of such an environment for opportunities and threats. The aim of general environment scanning is to help business organizations in decision making and strategic formulation.

Technological factors are one of the factors that exists in the general environment that affects Twitter as company. Twitter is among the many companies that totally depends on technology for people to use their services (Fitton, Gruen, & Poston, 2009). Services of Twitter can only be accessed through devices such as phones, and computers among other similar devices. This means as a company they have to ensure that such devices that are produces as capable of allowing access of Twitter services. Twitter as a company also have an application through which the services of the company can be accessed. These have application is always in constant update to ensure it contains the latest technologies to support. This means that the company has to keep on checking on the latest technologies to ensure that it stays in a market that is highly competitive.

Socio-cultural and political factors are also part of the factors that exist in the general environment of Twitter as a company. There are certain cultures that are in heavy use of the new technological changes that are being experienced. There are also other societies and cultures that are not much into technology. Twitter as a company has keep on ensuring that these group that is not much is technology such as use of social media is brought on board to increase their market share of on the use of social media. Politics, which also have close relationship with the socio-cultural aspects of the society also affects the general environment of a Twitter. Political campaigns have seen rise in use of social media for such purpose. This means that during political seasons in different countries the use of social media is always increased. This means as a company such have to be taken into consideration. The general environment is dynamic and complex and strategic planning is needed to enable a company such as Twitter adapt to such environmental changes.

Forces of Competition That Are Most Significant to Twitter

Porter in his Harvard Business Review article wrote, “Understanding the competitive forces, and their underlying causes reveals the roots of an industry’s current profitability while providing a framework for and anticipating and influencing competition over time” (Porter, 2008). The biggest threat to a business such as Twitter is competition. There are five forces of competition that exists and they include: competitive rivalry, bargaining power of suppliers, bargaining power of customers, threat of new entrants, and threat of substitute products or services.

Twitter is a social media platform that is used for various purpose ranging for business communication, marketing and social networking. There are also other companies such as Facebook and Instagram that provides almost the same services. Threat of substitute products or service as one of the forces is one that can easily affect Twitter as company. It is very easy for consumers of services of Twitter to switch form their services to that of the competitors such as Facebook and Instagram. The threats of substitutes are always informed by switching of costs, both long-term and immediate, as well as a buyer’s inclination to change. This means that Twitter has to offer their services in a manner that it will be difficult for them to be substitute by the consumers.

Competitive rivalry is another force of competition that affects Twitter as a company. This force examines how intense the competition is in the marketplace. This is determined by the number of existing competitors and what each is capable of doing. For example, a competition is considered to be high when there are just a few businesses equally selling a product or service, when the industry is growing and consumers can easily switch to a competitor’s offering such services at a lower cost. Competition rivalry affects advertising and price, which can sometimes end up hurting a Twitter’s bottom line.

There are many things that Twitter as a company can do to improve its ability to the threat of substitute products or services. There are factors that brings about consumers substituting products or services offered by a company to other products or services from other companies. One of the factors is the quality of products or services that are produced by the company. Another factor is the aspect of price for the services or products that are offered. This means that Twitter to help avoid their services from being substitutes by those offered by other companies such as Instagram and Facebook, they have to improve on the quality of their services, which includes better client services. The company will also have to look at their prices when using such services. As there are a group of price conscious consumers that will go for the service that is offered at the cheapest price.

In regards to what Twitter, Inc can do to improve effects of competitive rivalry, such are very many. Competition requires that a company, in this case Twitter has to remain relevant or it risk being ousted in the marketplace. One of the ways in which the company can go about this force of competition is by increasing their marketing and advertising activities to help create more awareness. This helps the company to remain relevant within the industry they operate in. Pricing is also another factor that has to be taken into consideration when competitive rivalry as a force of competition is being discussed. The pricing should be done in a way in which the consumers can switch to the rivals for similar services as prices in which the consumers can consider fair and better compared to that of the company.

Assessment of The External Threats Affecting Twitter and The Opportunities Available

External threats of a company as those that arise from the external environment. This are threats that the company has to deal with by changing to adapt to such threats as they are not within the control of the company. One of the external threats is the legal changes that always happen in regards to the use of social media by companies. As an external challenge Twitter has only one option of responding to such an external threat. That is by adjusting to meet the legal requirements as laid down by the authorized body. Changes in legal requirements has always acted as one of the greatest threats to social media service provider companies like Twitter among others. Responding to such changes promptly is very necessary as the legal consequences of such failure is always severe to the extent it can lead to the shutting down of such a business as Twitter.

Another external threat is the threat of a new entry into the marketplace. Twitter as a company has no control of who enters the marketplace and when they enter. People have the freedom of coming up with companies to offer services and produce products that already exists. New entries mean that they will want to have a market share by taking a portion of the existing market share of Twitter among other social media companies. When are there are threats of new entrance in the market, the greater the risk of a business’s market share being depleted (Martin, 2017). It is essential that that a company like Twitter puts up what are known to be barriers of entry so that threats of new entrants are neutralized. Some of such barriers include access to inputs, absolute cost advantages, economies of scale, and creation of well-recognized brands.

Having a well-recognized brand for example, help create about customer loyalty to the brand and cannot move to new companies that are offering the same products even if the offers are so good. Economies of scale ensures that the prices of the services and products of a company is always keep low in what cannot be substituted by the new entrant entry price. In most case, when there is no big difference in pricing, they will consider staying with the brands they are used to rather than moving from one brand to another.

Opinion on Twitter’s Greatest Strengths and Most Significant Weaknesses

There is undoubtedly an information overflow around Twitter and its related services. However, just like other companies in the marketplace, Twitter has strengths and weaknesses. Twitter has many strengths that have made it to be where it is today. One of the strength of Twitter is the fact that the company has a strong brand name already. This helps the company to get tons of publicity on a daily basis. Another strength of Twitter is the fact that it provides authentication for other applications. There has been an increase in fake things and people using other peoples name to market themselves or engage in other activities. The authentication aspect of Twitter makes it good people who want ensure they use real and true things. Another strength of Twitter is the fact that it has no ads. Ads is one thing that is making use of social media platform boring. Twitter has realized this and have ensured that there are no ads to its services.

However, with many strengths that Twitter as a company has, there are relatively good number of weaknesses that Twitter as company has. One of such weakness is the fact that it is down more often. There are times when its services cannot be access because it is down. Another weakness is the aspect of unequal distribution od tweets, as 10% of the tweets are coming from the top 10% users of the services. Another weakness is the fact that Twitter has a low retention rate, with such being at only 40%.

There are many things that the company can do to maintain their strengths as mentioned above. One is by sticking to some of their policies as long are such policies are still working. For example, since the policy of no ads has turned out to be a strength, such policy should be maintained to ensure that such a strength of the company never goes away. Apart from maintaining the strengths of the Twitter, it is also important that it improves on its weaknesses to make the company even better in providing of its services. One of the ways in can improves its weakness is by increasing its horsepower, which will help avoid situations when the company is down in terms of offering of services. The company should also increase its retention rate from 40% to a more reasonable figure owing to the success that the company has had in regards to the services that it offers to the public. The distribution of tweets is also another issue that Twitter should look into to make it almost equal among its users, to avoid some users having the feeling of being discriminated.

Determination of The Company’s Resources, Capabilities, And Core Competencies

Twitter can be said to be one the most successfully companies since it was founded in 2006. One is the things that make it be classified as one of the most successful companies is the kind of resources that the company that helps it in provision of its services. The company has hundreds of applications arounds its API, that help to supplement and support the main service that the company provides to the public. Other resources of the Twitter as a company includes: Twitter logo, social icons, logo pairing lockups, and tweet treatments. All this are used in the betterment of the services of the company.

Apart from the resources that Twitter as company has, there are also capabilities that the company has. One is the aspect that it has the capability of creating the bluebird craze. With fakeness being represented in all aspects of society, authenticity is one that each and every individual looks for when purchasing or looking for services. Twitter has the capability of providing authentication for other applications. Twitter also allows for microblogging as it is a thing on its own. There is almost no competition for doing microblogging on Twitter. In fact, bloggers nowadays engage more using Twitter that normal blogs that are created as websites.

There are also key competencies that the company has. One is that it is a social marketing tool. Marketing has been taken to another level with the millennials being their main target owing to the amount of time this group of generation spend on technology. It allows for marketing by as business organizations have accounts that help them market some of their products and services. Another key competency of Twitter is the aspect of it being able to allow businesses to communicate with their customers. Communication with customers for business organizations is very important for maintain good public relations. Twitter can also be said to be a search engine as there are certain searches that can be conducted through Twitter.

Analysis of The Company’s Value Chain to Determine Where They Create Value Using Resources, Capabilities, And Core Competencies of the Company

Value chain can be defined as a set of activities that a frim operating in a specific industry performs in order to deliver a valuable product or service to the market. The history of Twitter is similar to other social or search sites like Google and Facebook in that it was built for web but has matured into a mobile product making use of contextual and real time functions like geolocation, messaging and live events. Twitter has used the “systems thinking” concept to understand how things, such as animals, objects, and business among others, as part of the system influence one another within a whole.

A good example, in understanding an eco-system like a rainforest by analyzing the birds, plants, bugs, and weather among others, in the forest and how they influence on each other. In business, it is important to understand the value chain, the actors in it and the influence they have on one another as they to aspire to create value. For Twitter, the core parts of the system, which is social media advertising are businesses and consumers, social media platforms, third-party developers, advertisers, and content. Twitter’s move to mobile was on the black of creations by third-part developers. Since then however, the pressure has been on the company to monetize and create shareholder value from its platform. This has led to a strategy of closing out parts of the system.

Twitter like other social media platforms have a privileged asset. The company has unique understanding about its users’ identity. It knows what users like and what interest such users. This is done by analyzing who they follow and what they tweet about and this is very powerful. For other social media platforms, this advantage is not there. For example, Facebook only knows “who you are and who you know” and Google know “what you are searching for and when”. This means that the thing that Twitter valuable is its system and not the features on the Twitter platform. It is the knowledge of its user base.

In particular, it is the Twitter identities and the understanding that can be gleaned from how those identities are used and how they interact that matters. With this knowledge and understanding of user base, Twitter could play to win a much more open approach o its system. Such an approach would make Twitter the world largest social media advertiser, with no advertising on its platform.

References Fitton, L., Gruen, M. E., & Poston, L. (2009). Twitter for Dummies. Hoboken: Wiley Publishing. Martin, M. (2017, June 26). Porter's Five Forces: Analyzing the Competition. Retrieved from Business News Daily: https://www.businessnewsdaily.com/5446-porters-five-forces.html Porter, M. E. (2008). The Five Competitive Forces that Shapes Strategy. Harvard Business Review, 134-145.