Tesla Inc. Mission Statement/Business-Level Strategy/Functional-Level Strategy Analysis Assignment

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Present Vision, Mission, Values, and Strategic Goals/Objectives Analysis

Present Vision

Believing in free expression and the thought that every voice has the power to impact the world

(Twitter p. 3).

[A good discussion about the vision’s strengths and weaknesses based on the information in the

Chapter 2/11.4/12.2 Outline.]

Present Mission

The mission we serve as Twitter, Inc. is to give everyone the power to create and share ideas and

information instantly without barriers. Our business and revenue will always follow that mission

in ways that improve — and do not detract from — a free and global conversation (Twitter p. 3).

[The good discussion about the mission’s strengths and weaknesses based on the information in

the Chapter 2/11.4/12.2 Outline.]

Present Mission Elements

I. Present Customer Groups A. Global users that create, consume, discover, and distribute real-time public self-

expression and conversation.

1. Twitter’s primary service was the Twitter global platform for real-time public self-expression and conversation, which allowed people to create, consume,

discover, and distribute content (Twitter p. 4).

2. Key buying industries include the general public who buys products produced by this industry and also uses this industry’s services for socializing (SNS p.

13).

3. Twitter is available in more than 40 languages around the world (Twitter p. 3). 4. Social networking is a global enterprise with U.S. sites attracting visitors from

non-US addresses on a regular basis (SNS p. 13).

B. Global advertisers through Twitter promoted products. 1. Twitter’s promoted products enable its advertisers to launch products and

services and promote their brands, amplifying their visibility and reach, and

connect with Twitter’s audience, while extending the conversation around their

advertising campaigns (Twitter p. 4).

2. Key buying industries include retail trade, telecommunications retailers, and finance and insurance establishments that purchase online advertising (SNS p.

13).

3. Social networking is a global enterprise with U.S. sites attracting visitors from non-US addresses on a regular basis (SNS p. 13).

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II. Present Customers’ Needs A. Global users that create, consume, discover, and distribute real-time public self-

expression and conversation.

1. Socializing (a.k.a affiliation or belonging) is one need fulfilled by Twitter. a. Key buying industries include the general public who buys products

produced by this industry and also uses this industry’s services for

socializing (SNS p. 13).

2. Self-realization is another need filled by Twitter. a. Since creativity is an important aspect of self-realization, users’ ability to

create content helps fulfill this need (Assumed).

3. Information is a third need filled by Twitter. a. Twitter’s primary service was the Twitter global platform for real-time

public self-expression and conversation, which allowed people to create,

consume, discover, and distribute content (Twitter p. 4).

B. Global advertisers through Twitter promoted products. 1. Increased sales of products and services is one need fulfilled by Twitter.

a. Twitter’s promoted products enable its advertisers to launch products and services and promote their brands, amplifying their visibility and reach,

and connect with Twitter’s audience, while extending the conversation

around their advertising campaigns (Twitter p. 4).

2. Enhancing goodwill toward advertisers is another need fulfilled by Twitter. a. Twitter’s promoted products enable its advertisers to launch products and

services and promote their brands, amplifying their visibility and reach,

and connect with Twitter’s audience, while extending the conversation

around their advertising campaigns (Twitter p. 4).

b. Advertising has multiple advantages including the enhancement of goodwill toward the advertising company (Assumed).

3. Educating/informing the general public is a third need fulfilled by Twitter. a. Twitter’s promoted products enable its advertisers to launch products and

services and promote their brands, amplifying their visibility and reach,

and connect with Twitter’s audience, while extending the conversation

around their advertising campaigns (Twitter p. 4).

b. Advertising has multiple advantages including the education of the general public about the advertising company and/or an important issue

(Assumed).

III. Present Company Business Model A. Twitter’s Value Proposition

1. Free of charge platform available to global users for real-time public self- expression and conversation that attracts various advertisers.

a. Twitter’s primary service was the Twitter global platform for real-time public self-expression and conversation, which allowed people to create,

consume, discover, and distribute content (Twitter p. 4).

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2. For sale promoted products that enable its advertisers to launch products and services and promote their brands, amplifying their visibility and reach, and

connect with Twitter’s audience, while extending the conversation around their

advertising campaigns.

a. Twitter’s promoted products enable its advertisers to launch products and services and promote their brands, amplifying their visibility and reach,

and connect with Twitter’s audience, while extending the conversation

around their advertising campaigns (Twitter p. 4).

b. Twitter also solidified its value proposition for advertisers with its “Start With Them” campaign, which highlights that Twitter connects advertisers

with the most valuable audiences when they are most receptive (Twitter p.

6).

B. Twitter’s Profit Formula 1. Revenue Generation: Twitter’s two main revenue sources were from advertising

services and data licensing.

a. Twitter Inc. generated advertising and data licensing revenue as shown in Exhibit 1 by providing mobile advertising exchange services through the

Twitter MoPub exchange, and offering data products and data licenses

that allowed their data partners to search and analyze historical and real-

time data on the Twitter platform, which consisted of public tweets and

their content (Twitter p. 5).

2. Cost Structure: Fixed costs in the industry consist mainly of servers for developers and users and the depreciation expenses of those servers; fixed and

variable costs reflected in research and development spending consisting of

labor and facilities related costs; and variable costs of patents, which are key for

companies protecting their intellectual property, and marketing costs.

a. Depreciation expenses accounted for 11.5% of industry revenue in 2018 because social networking sites must maintain servers for developers and

users which can be expensive (SNS pp 20 – 21).

b. The most significant industry cost is wages, which make up 38.3% of revenue in 2018, up over the five-year period (SNS p. 19).

c. One of the major purchase costs are patent costs which are key for companies protecting their intellectual property (SNS p. 20).

d. Marketing costs made up 6.6% of total industry costs in 2018 (SNS p. 20). 3. Profit Margin: Profitability in the industry is dependent upon generating

sufficient advertising services and data licensing to cover costs and provide

attractive profits.

a. Industry profit margin is estimated to reach 32% in 2018 (SNS p. 20).

Present Core Values

1. “#GrowTogether” is a strategy launched in September 2017 whose mission is to power positive global change by fostering respectful conversations, creating deeper human

connections, and encouraging diverse interactions among individuals and teams, across the

entire organization, and on the platform resulting in a more globally inclusive culture and

more globally diverse workforce (Twitter p. 3).

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2. Free Expression: Twitter believes in free expression and thinks every voice has the power to impact the world.

A. Online Safety: Free expression is a human right unless it becomes abusive or threatening. To keep users safe, Twitter builds tools so users can control what they

see and who they interact with; work with a community of online safety experts to

fight abuse everywhere; and develop and enforce policies to prohibit abusive

behavior (Twitter p. 3).

3. “Twitter for Good”: Twitter’s philanthropic mission is to reflect and augment the power of Twitter and the talents of its employees through direct civic engagement, employee

volunteerism, charitable contributions, in-kind donations, and by harnessing the Twitter

service for good (Twitter p. 4).

4. Transparency: Twitter is transparent about its political activity and contributions. A. Civic Engagement: It engages with policymakers, governmental entities, and civil

society in markets throughout the world to advance public policy issues of

importance to its users, employees, and shareholders.

B. Political Action Committee (PAC): Twitter actively engages in United States policy issues and voter registration initiatives that will impact users, the company, and its

platform.

C. Transparency Report: Twitter shares a biannual Twitter Transparency Report with email privacy practices, legal requests received, and the actions it has taken (Twitter

p. 4).

[The good discussion about the core value’s strengths and weaknesses based on the information

in the Chapter 2/11.4/12.2 textbook and outline.]

Present Goals/Objectives

1. Maximize stockholder wealth over the long term (Assumed) (G/LT). 2. Twitter’s industry-specific revenue is expected to increase an annualized 26.9% to roughly

$1.6 billion in 2018 (SNS p. 26) (O/ST).

3. Increase profitability in 2019 (Assumed) (G/ST). 4. Increase revenue from advertising services to $3.2 billion in 2019 (Assumed) (O/ST). 5. Increase the average stock price to $35 per share in 2019 (Assumed) (O/ST). 6. Increase average active monthly users by 15% in 2019 (Assumed) (O/ST). 7. Increase worldwide brand recognition from its present level of 90% to 95% within the next

five years (Assumed) (O/LT).

Strategy Analysis

Present Generic Business-Level Strategy

Twitter’s present generic business-level strategy is focused differentiation. A focused

differentiation strategy seeks to create higher value for customers than the value that competitors

create, by delivering products or services with unique features while keeping costs at the same or

similar levels, allowing the firm to charge higher prices to its customers in one to two industry

market segments. The social network industry is divided into five distinct market segments: (1)

general social networks which accounted for 61.6% of total revenues in 2018; (2) photos and

short video social networks which accounted for 24.3% of total revenues in 2018; (3) Internet-

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based social networks which accounted for 9.8% of total revenues in 2018; (4) professional

social networks which accounted for 2.3% of total revenues in 2018; and (5) other social

networks which accounted for 2.0% of total revenues in 2018 (SNS p. 13). Launched in 2006,

Twitter is a social networking site that primarily focuses on microblogging, enabling for public

self-expression in conversation in real time in the general social network industry segment (SNS

p. 25). Twitter promotes itself as what is happening in the world and what people are talking

about right now (Twitter p. 3). Since its inception, Twitter’s user base has grown primarily

organically, complemented with targeted campaigns to drive new user acquisition (Twitter p. 6).

In 2018, Twitter set out to clearly define who the company is and express the uniqueness and

power of its brand through marketing campaigns to drive awareness of Twitter’s unique

positioning (Twitter p. 6).

Present Functional-Level Strategies

Intensive Marketing Strategy:

Twitter is using a market penetration strategy. A market penetration strategy seeks to increase

market share for present products or services in present markets through greater marketing

efforts. Since its inception, Twitter’s user base has grown primarily organically, complemented

with targeted campaigns to drive new user acquisition (Twitter p. 6).

Other Marketing Strategy:

Twitter uses a direct sales promotion strategy. Direct sales involves person-to-person selling in

which a company salesperson communicates the benefits of products and services to prospective

customers. Twitter has a global sales force and sales support staff located in over 35 offices

worldwide that is focused on attracting and retaining advertisers while certain advertisers use the

company’s self-serve advertising platform to launch and manage their advertising campaigns

(Twitter p. 6).

Production/Operations Strategy:

Twitter is pursuing a technology and equipment choices production/operations strategy.

Technology and equipment choices production/operations strategy centers around the degree of

automation and computerization in the organization. Twitter is composed of a set of core,

scalable, and distributed services that are built from proprietary and open source technologies

(Twitter p. 7). These systems are capable of delivering billions of messages, including images

and video, to hundreds of millions of people a day in an efficient and reliable way (Twitter p. 7).

Research and Development Strategy:

Twitter is pursuing a product research focus research and development strategy. A product

research focus research and development strategy centers on continually improving a company’s

product. Twitter continues to invest in its existing products and services as well as develop new

products and services through research and product development (Twitter p. 7).

Human Resources Strategy:

Twitter is pursuing a quality recruitment and selection human resource strategy. A quality

recruitment and selection human resource strategy centers around selecting and recruiting the

best quality job candidates. Twitter’s highly competitive environment along with the need for

many employees with specialized skills indicates that it must recruit and select quality

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employees to compete effectively (Assumed). Skilled coders are needed to develop new

applications and maintain websites (SNS p. 20).

Financial Strategy:

Twitter has pursued both an equity and internal financing financial strategy. An equity financing

strategy uses the sale of stocks to the general public to finance growth. An internal financing

strategy uses internal cash flows to finance growth. Twitter went public on November 7, 2013

with an initial public offering (IPO) (Twitter p. 7). Since that time, Twitter has used internal

funds to invest in its growth such as developing new products and services through research and

product development (Twitter p. 7).

Information System Strategy:

Twitter is using an investment in new technology information system strategy. An investment in

new technology information system strategy involves constantly updating both hardware and

software capabilities through the acquisition of new technologies. Twitter continues to invest in

its existing products and services as well as develop new products and services through research

and product development (Twitter p. 7). Twitter also continues to invest in protecting the safety,

security, and integrity of its platform by investing in both people and technology, including

machine learning (Twitter p. 7).

Generic Business-Level and Functional-Level Strategies Analysis

[A good discussion about the effectiveness of Twitter’s generic business level strategy and

functional strategies. A discussion about the consistency or lack of consistency between the

generic business level strategy and functional strategies is the most important factor in this

discussion.]