Running head: INDIVIDUAL CASE STUDY PART 2: TWITTER
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Individual Case Study Part 2: Twitter
Lindsey Gaston
Liberty University
BUSI 690
INDIVIDUAL CASE STUDY PART 2: TWITTER
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Introduction
Companies are constantly paying attention to the problem of hoping to profit in the
foreseeable future. To achieve profit maximization, leaders have developed effective yet efficient
systems of operations. Aspects such as globalization, technology, and sound systems of
governance have enabled companies to exploit their full potentials in the 21st century.
Globalization and technology have been crucial tools for companies wishing to pursue
exponential growth in the modern-day (Bryson, Hamilton & Van Slyke, 2017). The technology
services sector is amassing international dominance, presenting many opportunities for the
growth of companies.
The aspect of globalization and technology presents the sector with an endless array of
opportunities to exploit. Progressively, competitors have begun flocking into the industries
reducing the market shares of dominant companies. The unique selling proposition of companies
has been imperative in defining their end survival. In essence, creating seamless systems of
operations that reduce costs while improving profits is imperative to the long-term survival of
companies. In addition, the adoption of a sound strategic management framework enables
companies to examine their competitive advantages and readjust accordingly. Strategic
management is critical for companies to craft and execute multiple strategies.
The Twitter company was founded in 2006, wishing to be the leading source of
information for the world (Black, 2010). Boasting about 330 million active users, Twitter is
among the lead social media companies. To continuously increase its user base, Twitter seeks to
rely on a continuous improvement scheme. Relying on a steady strategic management system,
Twitter aims to minimize its costs while maximizing its profit base. The company has centered
its strategies on continual improvement in promoting freedom, hope, and limitless possibility
INDIVIDUAL CASE STUDY PART 2: TWITTER
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(Agrawal et al., 2015). From a business perspective, Twitter is keen to give businesses
international exposure with their advertising forums. Twitter is the pioneer of the use of hashtags
in social media.
Despite the huge milestones apparent in the company’s history, financial struggles have
been imminent. Many of its profitability avenues are a mere representation of a dire cost-cutting
process. The company is evolving from a simple text message-based application to an integral
part of wider communications. Twitter is a crucial player in modern-day information sharing and
real-time interactions. In recent research, 51% of journalists claimed their Twitter preferability
over other social media platforms (Balasubramanian, Fang & Yang, 2020). Drastic changes are
imperative for the company to harness its full capabilities and leverage the opportunities
presented in their environment.
The paper seeks to examine the company's strategy and set up key change details. To find
out the shortcomings, the paper will examine the existing mission, vision, and strategies in line
with the internal and external environments. Progressively, an examination of the company's
business model will be conducted concurrently with a SWOT analysis. Previous financial
statements will be analyzed to realize profitable avenues and more cost-cutting opportunities.
Basing on these findings, the paper will seek to establish new avenues and strategies for the
company to exploit.
Executive Summary
The report presents an in-depth analysis of Twitter Inc.'s strategic management processes
in the last three years. The paper seeks to understand the internal and external environmental
factors present in the company's environment. Subsequently, an analysis of the factors in the
internal and external environment is imperative. The analysis is conducted through the SWOT
INDIVIDUAL CASE STUDY PART 2: TWITTER
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analysis and its subsequent internal factor evaluation (IFE) and external factor evaluation (EFE).
In addition, sound financial analysis of Twitter’s previous documents was imperative to the
examination of the strategies.
To fully capture the effectiveness and efficiency of the strategy, the paper conducted a
competitor analysis. Competitor analysis aims to recruit major competitors and their strategies.
In essence, it enables the enactment of a counterstrategy to leverage its dominance in the market.
Facebook is the main key competitor of the company utilizing several techniques to stay abreast
in the market (Farache, Tetchner & Kollat, 2018). Twitter is unique in many aspects and should
leverage opportunities in the market to trigger more growth. Besides, Twitter ought to reduce its
cost structure through subsequent innovation and outsourcing of various activities.
The news focused strategy was lauded for its effectiveness in increasing the user base for
the company. In essence, the strategy was central to a dramatic increase in the user base of
Twitter. Expanding the user base is key to enhanced leverage of advertisers at the bargaining
table.
Existing Mission, Objectives, and Strategies
The strategic management process entails environment scanning, strategy formulation,
implementation, and evaluation. The environmental scanning phase entails the assessment of the
internal and external aspects of the business operations. The strategy formulation insists on a
keen design of new mission, objectives, and strategies that trigger the company to the next level.
The implementation phase seeks to put the suggested strategy into action with continuous
monitoring and evaluation in place.
Twitter company has been in existence since 2006. The company was incorporated in the
State of Delaware in 2007 (Black, 2010). The company takes pride in the ability to give the
INDIVIDUAL CASE STUDY PART 2: TWITTER
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consumer the ability to create and share information. In the modern-day, Twitter is the ultimate
self-expression tool presenting consumers with an avenue for sharing their ideas and opinions
and join many conversations. Ideas and information are the key anchors for effective sharing
with the platform keen to prevent misleading and irrelevant information. The sharing of ideas
and information is instant, with real-time convenience with little or no barriers at all.
Twitter's Existing Vision
The company’s existing vision was to be the center of unidirectional, asymmetric
information sharing about what one is doing. In a sector filled with imminent competition,
Twitter takes pride in establishing real-time conversations (Black, 2010). To emerge as the
leading company, Twitter is cognizant of its role in steering public conversations while
promoting real-time interactions. Besides, the company seeks to create an innovative and
creative workforce to realize its vision. In essence, Twitter's sector is marred with the need for
creative thinking to promote more autonomy and futuristic ideation.
Twitters Inc. Existing Mission
The company's mission is to give everyone the power to create and share ideas and
information instantaneously without barriers. In essence, Twitter’s mission bolds out the need for
free and global conversation through tweets. Adhering dominance on a global perspective calls
for the utilization of different strategies that align with the diverse communities. Twitter is an
emblem of excellence in the integration of different community needs through the creation of
prompt and swift sharing and receiving of information (Balasubramanian, Fang & Yang, 2020).
To achieve the mission successively, Twitter aims to identify barriers to the creation and sharing
of ideas and information in real-time.
Twitter Existing Strategy
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The company seeks to continuously invest in international operations to expand its
audience and advertiser base. It also seeks to promote global engagement and monetization
through its multiple platforms. To finetune its products and services, Twitter Inc. seeks to acquire
other companies to enhance the workforce's quality and complement/ supplement their products
or services. The company's investment policy centers on preserving capital and the support of its
liquidity requirements (Balasubramanian, Fang & Yang, 2020). In essence, the company doesn't
enter into investments for trading or speculative purposes. It also makes strategic investments in
privately held companies.
Twitter’s Existing Objectives
The general objective of Twitter is to connect people and allow people to share their
thoughts with a big audience (Balasubramanian, Fang & Yang, 2020). To achieve the objective,
the company is specific to highlight the need to identify and address any barriers present. In the
modern-day, the company is diverting to a more communal approach. In essence, the company's
objective is to sieve accurate from inaccurate information to prevent harassment and misleads to
promote healthier communities.
New Mission Statement
Twitter boasts of a unique selling proposition in the aspect of creating real-time
conversations while weeding out any barriers in the process (Black, 2010). The growing
competition from platforms such as Facebook or Instagram has derailed the progress of the
company greatly. Jack Dorsey, the company's CEO, has been adamant about creating a healthy
Twitter company that promotes more communities than hate. Twitter's foundation is deeply tied
up in their ability to have meaningful conversations with users across the globe. To achieve the
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various perspectives and goals, Twitter needs to reexamine its current mission, objectives, and
strategies.
Companies in the communication sectors are on a continuous improvement trajectory.
The communication world is consistently changing hence the need for a more streamlined
understanding of processes and their lateral integration. Twitter would need to identify a new
niche to exploit. In the modern-day, balancing freedom of speech and the aspects of false
information or harassment on online platforms is becoming critical (Balasubramanian, Fang &
Yang, 2020). This understanding informs Dorsey's approach to the regulation of certain
misleading information while also incorporating rules that promote more community integration.
Identifying what is at odds with healthy dialogues is imperative to the sustainable success of the
company.
From a business perspective, the means for business communication is connoting
significant changes. Twitter has approximately 330 million active users and provides the
company with a wide range of advertising platforms (Farache, Tetchner & Kollat, 2018). The
change in advertising calls for a more sophisticated approach creating seamless platforms of
advertising. Incorporating video sharing or live stream options is critical in enhancing more
advertisements for businesses in the modern world. These necessary changes are imperative to
capture in the mission statements, objectives, and strategies. Besides, Twitter's financial health is
a concern, with investors calling for more dynamic approaches.
Customers
Twitter Inc. makes money through advertising and data licensing. Statistics show that
advertising accounts for close to 86% of Twitter’s revenue (Balasubramanian, Fang & Yang,
2020). The company boasts of about 330 million users giving companies and individuals a wide
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array of markets. A company's mission ought to be consumer-centric. Twitter's customers are
individuals, businesses, government organizations, and NGOs wishing to create and share
information. For the businesses, Twitter Inc. seeks to create targeted advertising programs to
ultimately increase its visibility.
Products or Services
Twitter Inc. seeks to give everyone the power to create and share information with few or
no barriers at all (Farache, Tetchner & Kollat, 2018). The company is a center of interaction for
those willing to share and receive information. In essence, Twitter Inc. offers a wide range of
customer base for businesses to advertise. The targeted advertising scheme gives businesses real-
time access to global markets. In addition, Twitter is adamant about serving consumers with
trending topics in their timelines depending on their lines of interest.
Markets
Twitter Inc. has a global, which has caused international competition. The company
operates over the online space hence facing stiff competition from companies such as Facebook,
Instagram, or even Snap Chat. Besides, platforms such as China's notorious Tiktok or WeChat
are keen to deprive Twitter of its vast market share.
Technology
To promote more transparent creation and sharing of information, Twitter Inc. is adamant
to engage in technological updates continuously. The incorporation of live stream services helps
improve the timeliness and real-time approach to information. Besides, the need for reduction in
misinformation in the platform promotes the need for more technology integration. The company
recently developed 'Bird watch,' a tool aimed at tracking and reporting misinformed tweets.
Concern for survival, growth, and profitability
INDIVIDUAL CASE STUDY PART 2: TWITTER
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The company's financial health was picking up since the shutdown of its Tell Apart, ad
business in 2017 (Farache, Tetchner & Kollat, 2018). The advertising revenue is steadily growing
but could use some extra incentive. Planning over the long term is critical for the survival and
expansion of the company.
Philosophies
Twitter Inc.'s practices are defined by certain values that help in brand positioning. First,
the company seeks to promote free expression and civil liberties. Twitter believes in free
expression and thinks every voice has the power to impact the world. In addition, the company
committed to promoting equality and universal acceptance. For its corporate social
responsibility, Twitter Inc. seeks to promote sustainable environments and their conservations. It
also takes pride in ensuring internet safety for its consumers.
Self-Concept
As a social media platform, Twitter Inc. boasts of genuine diversity for its consumers
(Balasubramanian, Fang & Yang, 2020). As such, Twitter is an engagement goldmine for many
businesses wishing to carry out the advertisement. The topics trending on the platform are truly
meaningful. The company boasts of short form publishing due to the limit on characters to 240.
Additionally, users are encouraged to be creative and specific on the target message. The
immediacy approach to sharing real-time news is a crucial competitive advantage for the
company.
Public Image
Twitter Inc. is a keen advocate for corporate social responsibility (Farache, Tetchner &
Kollat, 2018). The company is keen to solve environmental problems through Twitter promotion.
In cases of disaster, Twitter Inc. is keen to promote topics that center on healing and recovery.
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Employees Concern
Twitter Inc. seeks to promote the diversity and talents of employees. The safeguards in
place is the company’s utmost priority. For instance, during the pandemic, the company asked all
employees to work from home due to their safety. Their labor costs are paid in full, with no pay
cuts.
Existing Business Model
Twitter is on a trajectory of continuous growth attracting many partnerships and
integrations (Mohammadi, 2018). The company’s business model is lauded as one of the most
effective yet efficient ones. To analyze its existing business model, the paper looks at its critical
components.
Key partners
The primary partners of Twitter have been the 330 million customers who use it for the
creation and receiving of information. The users who provide content (news articles, TV shows,
advertisements, and companies) are its key partners.
Key activities
Twitter Inc. undertakes direct activities such as web development and maintenance.
Application development is another activity carried out by Twitter. In addition, their maintenance
of user data to anhance maximum levels of privacy and protection is another key advantage
(Farache, Tetchner & Kollat, 2018). Improvement of algorithms is critical to the maintenance of
relevancy for the company.
Key resources
INDIVIDUAL CASE STUDY PART 2: TWITTER
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The Twitter platform is its main resource, expanding into different regions and continents
(Mohammadi, 2018). The network allows the connectivity of people across the world to follow
trending topics. Acquisitions (over fifty items) are another critical resource of Twitter Inc.
Value proposition
Twitter Inc. boasts of real-time sharing and receiving of information across all borders as
its core value proposition. The immediacy of access to information is unapparelled, along with
multiple aspects. Users can put forward multiple viewpoints through this platform.
Businesses/advertisers can benefit from different value propositions such as word of mouth, Ad
formats, or even native integration. Developers ultimately benefit from access to APIs that
supports a comprehensive support frameworks.
Twitter’s customers
The customer segments could be classified into businesses and users. The businesses
could be defined by their sizes, location, and advertisement needs. In essence, other businesses
are simply after a platform for better customer service. Twitter users are all over the world,
incorporating more diversity and a different range of topics (Mohammadi, 2018).
Customer Relationships
Customer response is critical to the operation of Twitter. The company takes pride in
being swift to address any consumer needs in real-time. It operates as a self-taught website where
customers are able to understand and direct themselves on processes (Balasubramanian, Fang &
Yang, 2020). In recent times, the company has been adamant about addressing the major aspect
of misinformation and harassment of its users on the online platform. A steady relationship
between the users and the company is critical to the alleviation of such abuses.
Cost Structure of Twitter
INDIVIDUAL CASE STUDY PART 2: TWITTER
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The cost structure of Twitter incorporates aspects such as cost of revenue, research and
development, sales and marketing, general and administrative, and interest expenses
(Balasubramanian, Fang & Yang, 2020). The cost structure is mostly related to data maintenance,
website development, marketing, and customer service.
Revenue Streams
The major revenue stream for the company is advertising. Its payment models fall under
CPM, CPC, and CPA models. Advertising occurs in aspects such as auctioning, promoted trends,
promoted accounts, and programmatic. Data licensing is another critical revenue stream for
Twitter (Balasubramanian, Fang & Yang, 2020). Twitter sells access to its public data to trigger
an analysis of historical and real-time data. In terms of data licensing, Twitter has developed the
premium and enterprise levels of subscription. Other revenues generating Twitter options are
commissions on the mobile Ad exchange, i.e., the MO Pub.
SWOT analysis
Strategic planning calls for an in-depth understanding of the company's internal
environment and the external environment (Giraudou & McLarney, 2014). Internal environment
factors are those within the control of the company and could be mitigated. External environment
factors are those out of the reach of the company that cannot be controlled. The internal
environment factors present the company's strengths and weaknesses. The external environment
presents the company with opportunities and threats. A SWOT analysis identifies strengths,
weaknesses, opportunities, and threats of a company.
SWOT analysis
Strengths
Weaknesses
Opportunities
Threats
Larger audience.
Twitter boasts of
about 330 million
users
Lower revenue and
profits compared to
other companies.
New user groups.
Twitter could go for
baby boomers.
Competition. Twitter
is facing stiff
competition from
platforms such as
Facebook reducing
INDIVIDUAL CASE STUDY PART 2: TWITTER
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its market share
Strong image. The
twitter brand is
recognized all over
the world
High operational
expenses calling for
the efficiency need.
Diversification.
Opening new
channels of growth
will increase
Twitter’s revenue.
Regulatory threat.
The government is
keen to impose
sanction on tech
company on aspect
such as data
management and
manipulation.
Marketers platform
of choice. Many
companies prefer
twitter for its
effectiveness in
marketing
Online harassment
and information
misleads. The two
have led to the birth
of ‘bird watch’.
Research and
innovation. This will
be critical in driving
user engagement.
Currency
fluctuations.
Operating on an
international basis
exposes the company
to losses due to
changes in
currencies.
Innovation. Twitter is
on a constant pursuit
to innovation
focusing more on
customer experience.
Internal Factor Evaluation
The exemplary strategic management project proposes to evaluate the internal
capabilities of each department. As such, the internal factor evaluation seeks to understand
internal capabilities and deficiencies. As such, the internal factor evaluation seeks to present a
weighted scorecard that defines the internal capabilities and shortcomings of the coming. The
weighted scorecard is imperative in enabling effective and efficient decision making. A low score
indicates that the company is weak against its competitors. The score also defines the efficiency
of the company.
Internal Factor Evaluation Matrix (IFE)
Strengths
Weight
Rating
Weighted
Score
Quick platform relay
0.12
4
0.48
User friendly interface
0.10
4
0.40
Frequently update platform
0.08
2
0.16
Development
0.07
3
0.21
INDIVIDUAL CASE STUDY PART 2: TWITTER
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Increase technology
0.08
3
0.24
Easy Integration
0.10
3
0.30
Weaknesses
Weight
Rating
Weighted
Score
Charater limit
0.07
1
0.07
Information overload
0.08
2
0.16
Limited information seen by users
0.09
3
0.27
Profile restrictions
0.12
4
0.48
Negative effects on businesses
0.09
3
0.27
TOTALS
1.00
3.04
External Factor Evaluation
Analysis of the macro environment to examine the threats and opportunities is
imperative. From the perspective of strategic management, the evaluation of external factors is of
unparalleled importance. Evaluation helps assess the company's ability to take advantage of
opportunities while also mitigating strategies for environmental threats (Giraudou & McLarney,
2014). Examining the effectiveness of the company is imperative to its subsequent review of
strategy and its finetuning. Twitter’s EFE matrix highlights a mixed approach towards the
harness of available opportunities and the lateral threat mitigation.
External Factor Evaluation Matrix (EFE)
Opportunities
Weight
Rating
Weighted
Score
1
New user groups.
0.10
4
0.40
.
2
Diversification
0.10
3
0.30
.
3
Increase Revenue
0.10
4
0.40
.
4
Research and Innovation
0.09
4
0.36
.
5
Increase Engagement
0.05
3
0.15
.
6
Followers
0.07
0
0.00
.
7
Marketers platform of choice
0.07
0
0.00
.
Threats
Weight
Rating
Weighted
INDIVIDUAL CASE STUDY PART 2: TWITTER
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Score
1
Facebook
0.05
3
0.15
.
2
Instagram
0.05
3
0.15
.
3
Regulatory (Government)
0.07
4
0.28
.
4
Currency Flunctuations
0.08
2
0.16
.
5
Lawsuits
0.08
3
0.24
.
6
Loss of user interest
0.09
4
0.36
.
TOTALS
1.00
2.95
SWOT Bivariate Strategy Matrix
Strength/ Opportunities
Weaknesses/Threats
Ability to research and innovate
Vulnerability to competition
Technology harnessing capabilities
Lower revenues
Swift collaborations and partnerships
Competitive Forces Analysis
Twitter faces competitors in the way of users, advertisers, and people. Twitter competes
with companies with greater financial strength and a large user base. The competing tools for the
companies include usefulness, ease of use, performance, reliability, quality, relationship
management, and the reputation of the company. In the case of advertisers, Twitter Inc. competes
against online mobile businesses, and even traditional outlets. The demand for the highly skilled
Twitter Inc. labor is apparent. The company is adamant to create a holistic work environment that
incorporates the diverse needs of labor.
Twitter boasts of a 21.82% market share compared to competitors (Balasubramanian,
Fang & Yang, 2020). The company faces stiff competition from companies such as Facebook,
eBay, Instagram amongst many other social media companies.
CMP Matrix Twitter Instagram Snapchat Facebook
INDIVIDUAL CASE STUDY PART 2: TWITTER
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Critical Success
Factors
Weight
Rating
Score
Rating
Score
Rating
Score
Rating
Score
Advertising
0.15
4
0.60
2
0.30
2
0.30
4
0.60
Brand Recognition
0.10
3
0.30
3
0.30
3
0.30
3
0.30
Market Share
0.15
3
0.45
2
0.30
2
0.30
2
0.30
Product Efficiency
0.10
4
0.40
4
0.40
3
0.30
4
0.40
Customer Experience
0.10
4
0.40
4
0.40
3
0.30
3
0.30
Customer Service
0.10
3
0.30
2
0.20
2
0.20
2
0.20
Customer Loyalty
0.15
3
0.45
3
0.45
4
0.60
4
0.60
Global Expansion
0.15
4
0.60
4
0.60
4
0.60
4
0.60
Total
1.00
3.50
2.95
2.90
3.30
Ratio and Analysis
The company’s closest competitors are Facebook, Snap Inc., IHS Markit Ltd., and Sabre
corporation. The paper analyzes Facebook ratios establishing critical linkages.
Name Company Industry
P/E Ratio TTM
31.83
42.16
Price to Sales TTM
9.68
7.75
Price to Cash Flow MRQ
36.04
51.7
Price to Free Cash Flow TTM
39.85
33.91
Price to Book MRQ
6.5
5.67
Price to Tangible Book MRQ
7.81
8.66
Profitability: TTM vs 5 Year Average Margins
TTM (%)
5 Year Avg. (%)
Gross marginOperating marginPretax marginNet Profit margin0%100%25%50%75%
Pretax margin
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TTM (%)37.09%
Name Company Industry
5 Year Avg. (%)42.06%
Gross margin TTM
81.04%
62.79%
Gross Margin 5YA
83.91%
62.83%
Operating margin TTM
36.41%
20.06%
Operating margin 5YA
41.25%
21.23%
Pretax margin TTM
37.09%
21.78%
Pretax margin 5YA
42.06%
22.9%
Net Profit margin TTM
32%
16.45%
Net Profit margin 5YA
34.18%
15.68%
Revenue/Share TTM
26.41
65.66
Basic EPS ANN
6.48
12.91
Diluted EPS ANN
6.43
12.77
Book Value/Share MRQ
41.31
88.73
Tangible Book Value/Share MRQ
34.37
66.93
Cash/Share MRQ
19.52
54.24
Cash Flow/Share TTM
10.62
17.98
Management Effectiveness: TTM vs 5 Year Average Margins
TTM (%)
5 Year Avg. (%)
INDIVIDUAL CASE STUDY PART 2: TWITTER
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Name Company Industry
Return on EquityReturn on AssetsReturn on Investment0%5%10%15%20%25%30%
Return on Investment
TTM (%)20.58%
5 Year Avg. (%)20.25%
Return on Equity TTM
23.87%
22.62%
Return on Equity 5YA
21.98%
24.68%
Return on Assets TTM
18.66%
10.3%
Return on Assets 5YA
18.99%
11.56%
Return on Investment TTM
20.58%
12.05%
Return on Investment 5YA
20.25%
14.21%
EPS(MRQ) vs Qtr. 1 Yr. Ago MRQ
28.06%
71%
EPS(TTM) vs TTM 1 Yr. Ago TTM
34.78%
31.11%
5 Year EPS Growth 5YA
42.25%
22.51%
Sales (MRQ) vs Qtr. 1 Yr. Ago MRQ
21.63%
23.13%
Sales (TTM) vs TTM 1 Yr. Ago TTM
18.71%
20.64%
5 Year Sales Growth 5YA
41.49%
27.68%
5 Year Capital Spending Growth 5YA
52.5%
26.49%
Quick Ratio MRQ
-
1.67
Current Ratio MRQ
5.51
5.76
LT Debt to Equity MRQ
0.4%
58.07%
Total Debt to Equity MRQ
0.45%
65.92%
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Name
Company
Industry
Efficiency
Asset Turnover TTM
0.58
0.55
Inventory Turnover TTM
-
36.94
Revenue/Employee TTM
1.76M
963.09K
Net Income/Employee TTM
562.39K
197.28K
Receivable Turnover TTM
10.06
9.09
Dividend Yield ANN
-
3%
Dividend Yield 5 Year Avg. 5YA
-
0.55%
Dividend Growth Rate ANN
-
13.13%
Payout Ratio TTM
0%
16.66
Historical Financial Statements
Income Statement
2020
2020
2020
2020
Total Revenue
936.23
683.44
807.64
1007.34
Revenue
936.23
683.44
807.64
1007.34
Other Revenue, Total
-
-
-
-
Cost of Revenue, Total
361.39
288.04
284.04
314.01
Gross Profit
574.85
395.4
523.6
693.33
Total Operating Expenses
880.43
957.87
823.08
854.46
Selling/General/Admin. Expenses,
Total
309.86
453.52
330.65
342.21
Research & Development
208.88
215.81
200.39
198.24
Depreciation / Amortization
-
-
-
-
INDIVIDUAL CASE STUDY PART 2: TWITTER
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Interest Expense (Income) - Net
-
-
-
-
Operating
Unusual Expense (Income)
0.3
0.5
8
-
Other Operating Expenses, Total
-
-
-
-
Operating Income
55.81
-274.43
-15.44
152.88
Interest Income (Expense), Net Non-
Operating
-22.45
-14.81
-0.37
7.55
Gain (Loss) on Sale of Assets
-
-
-
-
Other, Net
-3.68
0.14
0.28
-2.34
Net Income Before Taxes
29.68
-289.11
-15.54
158.09
Provision for Income Taxes
1.02
1088.9
-7.14
39.32
Net Income After Taxes
28.66
-1378.01
-8.4
118.77
Minority Interest
-
-
-
-
Equity In Affiliates
-
-
-
-
U.S GAAP Adjustment
-
-
-
-
Net Income Before Extraordinary
Items
28.66
-1378.01
-8.4
118.77
Total Extraordinary Items
-
-
-
-
Net Income
28.66
-1378.01
-8.4
118.77
Total Adjustments to Net Income
-
-
-
-
Income Available to Common
Excluding Extraordinary Items
28.66
-1378.01
-8.4
118.77
Dilution Adjustment
-
-
-
-
Diluted Net Income
28.66
-1378.01
-8.4
118.77
Diluted Weighted Average Shares
806.38
785.91
780.69
788.79
INDIVIDUAL CASE STUDY PART 2: TWITTER
21
Diluted EPS Excluding 0.04 -1.75 -0.01 0.15
Extraordinary Items
DPS - Common Stock Primary Issue
-
-
-
-
Diluted Normalized EPS
0.04
-1.75
-0
0.15
Statement of Financial Position
2020
2020
2019
2018
Cash and Short-Term Investments
7681.05
7766.01
7670.66
6639.05
Cash
234.5
211.91
235.43
254.41
Cash & Equivalents
1966.58
2900.55
3227.92
1544.68
Short Term Investments
5479.97
4653.56
4207.31
4839.97
Total Receivables, Net
747.55
600.78
656.38
850.18
Accounts Receivables - Trade, Net
747.55
600.78
656.38
850.18
Total Inventory
-
-
-
-
Prepaid Expenses
158.73
128.5
138.56
127.08
Other Current Assets, Total
2.25
-
1.98
3.76
Total Assets
13088.79
12547.59
13540.73
12703.39
Property/Plant/Equipment, Total – Net
2220.93
1782.8
1747.9
1728.88
Property/Plant/Equipment, Total –
Gross
Accumulated Depreciation, Total
4027.61
-1806.68
3496.54
-1713.73
3361.94
-1614.04
3279.53
-1550.65
Goodwill, Net
1289.15
1284.33
1269.63
1256.7
Intangibles, Net
58.92
64.35
64.56
55.11
Long Term Investments
77.3
76.1
76.7
77.7
Note Receivable - Long Term
-
-
-
-
Other Long-Term Assets, Total
852.91
844.73
1914.35
1964.93
Other Assets, Total
-
-
-
-
INDIVIDUAL CASE STUDY PART 2: TWITTER
22
Total Current Liabilities
1935.1
841.11
710.02
832.48
Accounts Payable
241.1
162.16
183.92
161.15
Payable/Accrued
-
-
-
-
Accrued Expenses
728.21
601.18
462.83
577.29
Notes Payable/Short Term Debt
-
-
-
-
Current Port. of LT Debt/Capital
Leases
Other Current liabilities, Total
908.61
57.18
7.25
70.52
13.89
49.38
23.48
70.56
Total Liabilities
5276.7
4889.53
4745.1
3999
Total Long-Term Debt
2551.43
3427.36
3398.28
2509.01
Long Term Debt
2551.43
3427.36
3398.28
2508.8
Capital Lease Obligations
-
-
-
0.2
Deferred Income Tax
28.84
26.58
25.37
24.17
Minority Interest
-
-
-
-
Other Liabilities, Total
761.33
594.49
611.43
633.35
Total Equity
7812.09
7658.06
8795.63
8704.39
Redeemable Prefer
Preferred Stock - N
Net
Common Stock, To
Additional Paid-In
Retained Earnings
Deficit)
Treasury Stock - C
ESOP Debt Guaran
Unrealized Gain (L
red Stock, Total - - - -
on-Redeemable, -
-
-
-
tal - - - -
Capital 9249.96
9127.5
8952.06
8763.33
(Accumulated -1347.79
-1376.44
1.56
11.59
ommon - - - -
tee -
-
-
-
oss) -
-
-
-
INDIVIDUAL CASE STUDY PART 2: TWITTER
23
Equity
Capital Expenditure
Other Investing Cas
Total
Cash From Financing Activities
981.27
989.08
963.98
-286.18
Financing Cash Flow Items
-33.01
-29.28
-26.36
-27.66
Total Cash Dividends Paid
-
-
-
-
Issuance (Retirement) of Stock, Net
34.85
34.82
0.3
43.17
Issuance (Retirement) of Debt, Net
979.43
983.54
990.03
-301.68
Foreign Exchange Effects
-14.85
-15.78 -11.95
4.58
Other Equity, Total
-90.09
-93
-158
-70.53
Total Liabilities & Shareholders' 13088.79
12547.59
13540.73
12703.39
Total Common Shares Outstanding 794.45
790.43
784.1
779.62
Cashflow statements
Net Income/Starting Line
-1357.74
-1386.4
-8.4
1465.66
Cash From Operating Activities
662.57
447.78
246.77
1303.36
Depreciation/Depletion
366.47
244.49
120.65
465.55
Amortization
-
-
-
-
Deferred Taxes
-32.38
-26.04
-7.02
84.37
Non-Cash Items
1540.8
1401.03
133.05
-730.91
Cash Receipts
-
-
-
-
Cash Payments
-
-
-
-
Cash Taxes Paid
-
-
-
-
Cash Interest Paid
-
-
-
-
Changes in Working Capital
145.42
214.71
8.49
18.7
Cash From Investing Activities
-1232.89
-112.81
466.14
-1115.97
s -577.83
-287.08
-122.67
-540.69
h Flow Items, -655.06
174.27
588.81
-575.29
INDIVIDUAL CASE STUDY PART 2: TWITTER
24
Net Change in Cash
396.1
1308.27
1664.95
-94.21
Beginning Cash Balance
-
-
-
1893.3
Ending Cash Balance
-
-
-
1799.09
Free Cash Flow
-
-
-
762.6
Ratios
P/E Ratio TTM
-
42.16
Price to Sales TTM
10.41
7.75
Price to Cash Flow MRQ
46.87
51.7
Price to Free Cash Flow TTM
169.96
33.91
Price to Book MRQ
4.57
5.67
Price to Tangible Book MRQ
5.53
8.66
Profitability: TTM vs 5 Year Average Margins
TTM (%)
5 Year Avg. (%)
Gross margin Operating margin Pretax margin Net Profit margin0%-50%-25%25%50%75%
Net Profit margin
TTM (%)-36.07%
5 Year Avg. (%)14.15%
Gross margin TTM
63.68%
62.79%
Gross Margin 5YA
66.22%
62.83%
Operating margin TTM
-2.36%
20.06%
INDIVIDUAL CASE STUDY PART 2: TWITTER
25
Operating margin 5YA
-0.19%
21.23%
Pretax margin TTM
-3.4%
21.78%
Pretax margin 5YA
-1.87%
22.9%
Net Profit margin TTM
-36.07%
16.45%
Net Profit margin 5YA
14.15%
15.68%
Revenue/Share TTM
4.35
65.66
Basic EPS ANN
1.9
12.91
Diluted EPS ANN
1.87
12.77
Book Value/Share MRQ
9.83
88.73
Tangible Book Value/Share MRQ
8.14
66.93
Cash/Share MRQ
9.67
54.24
Cash Flow/Share TTM
-0.96
17.98
Management Effectiveness: TTM vs 5 Year Average Margins
TTM (%)
5 Year Avg. (%)
Return on Equity Return on Assets Return on Investment-20%-15%-10%-5%0%5%10%
Return on Equity TTM
-15.27%
22.62%
Return on Equity 5YA
7.18%
24.68%
Return on Assets TTM
-10.04%
10.3%
Return on Assets 5YA
4.84%
11.56%
Return on Investment TTM
-11.27%
12.05%
Return on Investment 5YA
5.35%
14.21%
EPS(MRQ) vs Qtr. 1 Yr. Ago MRQ
-23.07%
71%
INDIVIDUAL CASE STUDY PART 2: TWITTER
26
EPS(TTM) vs TTM 1 Yr. Ago TTM
-177.11%
31.11%
5 Year EPS Growth 5YA
-
22.51%
Sales (MRQ) vs Qtr. 1 Yr. Ago MRQ
13.66%
23.13%
Sales (TTM) vs TTM 1 Yr. Ago TTM
2.2%
20.64%
5 Year Sales Growth 5YA
19.78%
27.68%
5 Year Capital Spending Growth 5YA
21.81%
26.49%
Quick Ratio MRQ
-
1.67
Current Ratio MRQ
4.44
5.76
LT Debt to Equity MRQ
32.66%
58.07%
Total Debt to Equity MRQ
44.29%
65.92%
Efficiency
Asset Turnover TTM
0.28
0.55
Inventory Turnover TTM
-
36.94
Revenue/Employee TTM
700.95K
963.09K
Net Income/Employee TTM
-252.85K
197.28K
Receivable Turnover TTM
4.8
9.09
Dividend Yield ANN
-
3%
Dividend Yield 5 Year Avg. 5YA
-
0.55%
Dividend Growth Rate ANN
-
13.13%
Payout Ratio TTM
-
16.66
Alternative Strategies
News Focused Approach
INDIVIDUAL CASE STUDY PART 2: TWITTER
27
The approach focuses on better delivery of news in real-time revenue-sharing. As such,
the approach summons the use of live conferencing and the coverage of multiple events. In
essence, Twitter should aim to incorporate more new centric approaches. The revenue sharing
agreement between the company and any news provider lowers profits. The process is, however,
central to catalyzing faster transactions amongst consumers promoting real-time coverage. The
news focused approach promotes more coverage to the news company aiding greatly its
bargaining capabilities with advertisers.
Data focused approach
As an alternative strategy, the data-focused approach is keen to promote more data
agreements between companies. The strategy is central to providing a wider pool for data
assessment. The process centers on triggering data licensing enhancing greatly the profits of the
company. In essence, entering strategic agreements with multiple companies is central to the
success process. Besides, protecting consumer data from third parties is critical in the process of
success.
Data focused strategy
Pro Forma Financial Statements
News Focused Strategy
INDIVIDUAL CASE STUDY PART 2: TWITTER
28
Recommended Strategy
The recommended strategy for this study is a news-centric approach. The concentration
of news and information may increase the company's usage rate. Promoting the accuracy and
real-time approach to news is critical for the company in both the short and long term. In the
long run, the company will have reasonable confidence to continue to achieve its set goals.
Proposed New Business Model
Twitter is a customer-driven business and should follow a customer-driven, ad-free
business model. The company should offer special features for subscribers, both marketers and
users, that focus on customer satisfaction, and ease of use. Twitter can significantly increase
revenue by ensuring customer satisfaction. Twitter must return its focus on the powerful platform
by allowing users to use the platform in a more diverse way that allows users to take advantage
of features such as enhanced security, payments between Twitter users, extended character
length, favorites optimization, and ad-free subscriptions. By allowing users access to additional
benefits can lure new users and users of other platforms exhausted by lack of security and
minimal exploitation for advertisers. Rather than trying to match the competition, work at being
the best communication platform for social media buffs.
INDIVIDUAL CASE STUDY PART 2: TWITTER
29
INDIVIDUAL CASE STUDY PART 2: TWITTER
30
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INDIVIDUAL CASE STUDY PART 2: TWITTER
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Appendix A
(Uenlue & Uenlue, 2020).
