Meta Platforms (formerly Facebook Inc.) has a generic competitive strategy and intensive growth strategies that maintain business competitive advantage based on efficiency and accessibility. Michael Porter’s model for generic competitive strategies indicates the company’s approach and strategic direction for business growth. In this business analysis case, Facebook’s generic competitive strategy ensures growth and competitive advantage by capturing a bigger share of the market for social networking, advertising, and the services of Facebook Marketplace. This situation addresses competition with the social media and digital advertising businesses of Google (Alphabet), X (Twitter), Snapchat, and Microsoft’s LinkedIn, as well as the marketplace businesses of Amazon, eBay, and Walmart Marketplace. On the other hand, based on the Ansoff Matrix, Facebook’s intensive growth strategies emphasize market penetration for business growth. The generic competitive strategy and intensive growth strategies align with the business strengths defined in the SWOT analysis of Facebook (Meta Platforms) and enable the company to keep its market position as one of the world’s leading online social networking firms.
Facebook’s generic competitive strategy (Porter’s model) supports the business through operational efficiency and customers’ ease of access. Related intensive strategies grow Facebook’s market position and revenues by making the social networking website accessible in more regions worldwide. The effects of these intensive growth strategies and generic competitive strategy impact the competitive landscape (see Porter’s Five Forces Analysis of Facebook (Meta Platforms)) and the external factors that influence the multinational company’s business performance.
Facebook’s (Meta’s) Generic Competitive Strategy
Meta uses cost leadership as its generic competitive strategy for Facebook and other products. This generic strategy involves minimizing the costs of doing business for competitive advantages. Cost minimization enables the social media company to reduce its prices competitively. The company also broadly provides its online services to the global market. This condition is achieved through the nature of Facebook’s business. For example, the company uses computing technologies to maximize the efficiency of its social networking website and apps. The online nature of this business enables Facebook to easily reach Internet users across the international market, thereby satisfying the broad scope of the cost-leadership generic competitive strategy.
The cost-leadership generic competitive strategy leads to the strategic objective of expanding Facebook’s online social network user base. A related financial strategic objective is to increase the company’s digital advertising revenues annually. In this generic strategy for competitive advantage, Facebook has the potential to satisfy its strategic objectives by focusing on growing its membership, which currently stands at more than two billion monthly active users. Cost leadership provides the financial condition conducive to implementing Meta’s intensive growth strategies, especially market penetration. Also, this generic competitive strategy establishes cost targets that influence decisions in Facebook’s (Meta’s) operations management.
Facebook’s (Meta’s) Intensive Growth Strategies
Market Penetration. Facebook achieves growth primarily through market penetration as an intensive growth strategy. The objective of this growth strategy is to maximize Meta’s current market share. For example, for this strategic objective, the company increases its share in current markets by establishing alliances and special arrangements with telecommunications companies and smartphone manufacturers, like Samsung, to increase the number of Facebook users by promoting the Facebook mobile app. This intensive growth strategy uses Meta’s generic competitive strategy of cost leadership to maximize market reach using existing assets.
Market Development. Market development is the secondary intensive strategy that Facebook uses for business growth. The objective of this intensive growth strategy is to enter new markets or market segments. For example, one of Facebook’s strategic objectives is to coordinate with restrictive governments to allow their citizens to access the online social network. This intensive growth strategy aligns with the mission statement and vision statement of Facebook (Meta Platforms), which emphasize growth and global market reach. This global market reach maximizes business effectiveness and efficiency and satisfies the company’s cost-leadership generic competitive strategy.
Diversification. Facebook uses diversification as a minor intensive strategy for growth. The main objective in this intensive growth strategy is to establish new businesses or operations. For example, Meta acquired Lofelt to offer haptic technology integrated into virtual reality technology that complements social networking services. With this intensive growth strategy, Facebook’s strategic objective is to acquire or establish new business operations or services to increase revenues and market reach. Meta’s cost-leadership generic competitive strategy involves cost minimization that supports the implementation of this intensive growth strategy.
Product Development. Product development is a minor intensive growth strategy used in Meta’s social media services and other businesses. This intensive strategy involves offering new products to grow the company. For example, as a strategic objective, the company develops mobile apps to complement its social networking websites. Meta continues to develop new products and technology, including its investments in the Metaverse. Considering its effect on the product mix, this intensive growth strategy influences Facebook’s (Meta’s) marketing mix or 4Ps. New products attract more individual users and advertisers, which are the main source of the company’s revenues. However, the industry trends described in the PESTLE/PESTEL analysis of Facebook (Meta Platforms) influence product-development goals for this growth strategy. The cost-leadership generic competitive strategy optimizes profit margins when implementing this intensive growth strategy.
References
- About Meta Platforms, Inc.
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- Meta for Business – Meta Ads.
- Meta Platforms, Inc. – Form 10-K.
- Meta Platforms, Inc. – The Metaverse is the Future of Digital Connections.
- U.S. Department of Commerce – International Trade Administration – Software and Information Technology Industry.