This SWOT analysis of Meta Platforms, Inc. (formerly known as Facebook, Inc.) includes an internal analysis of the company’s strengths and weaknesses (internal strategic factors) and an external analysis of the business environment to determine opportunities and threats (external strategic factors). The social media corporation’s strengths, weaknesses, opportunities, and threats (SWOT factors) influence the strategic direction of the business, based on current and emerging market and industry conditions. This SWOT analysis also highlights Meta’s (Facebook’s) corporate mission statement and corporate vision statement in shaping the company’s approach to the SWOT variables. This approach currently targets business potential and profits from the development of the metaverse. Meta’s (Facebook’s) generic strategy for competitive advantage and its intensive growth strategies reflect such a strategic approach to addressing the challenges and opportunities outlined in this SWOT analysis.
Mark Zuckerberg’s push for a strategic shift toward the metaverse, resulting in the creation of Meta Platforms, Inc., brings opportunities for the business, but also widens the competitive threat noted in this SWOT analysis. The diversity of firms that can operate in the metaverse also imposes pressure for innovative strategies. The Porter’s Five Forces analysis of Meta Platforms (Facebook) describes a business environment with strong competition. This condition defines the social networking and virtual reality company’s strategic options relative to all the internal factors and external factors identified in this SWOT analysis.
Meta’s Strengths (Internal Strategic Factors)
This part of the SWOT analysis identifies the business capabilities, resources, and competitive advantages that support the growth and success of the information technology corporation. The company’s strengths come from its services and brands, such as Facebook and Instagram. The following internal factors are among Meta’s primary strengths:
- Some of the world’s strongest information technology and online service brands
- Massive global user base with corresponding network effect
- An expanding ecosystem of information technology products
The Facebook and Instagram brands are among the most popular in the world. Facebook is now just one of the services and brands of Meta Platforms after the company’s reorganization and rebranding in 2021. However, Meta’s efforts in developing the metaverse are largely dependent on Facebook and Instagram’s social media users. Thus, in this SWOT analysis, these brands are a major strength supporting the growth of Meta Platforms. In relation, the social network, through Facebook’s original business, has a massive consumer base. In this SWOT analysis of Meta Platforms, such an internal strategic factor strengthens the company through the network effect. As new users join and use Facebook and the metaverse, the company’s services become more attractive to even more users. Considering Facebook’s dominance in online social networking, Meta’s competitive advantage is maintained through its massive user base. In addition, this SWOT analysis considers how the company’s shift to the metaverse leads to the strength of having an ecosystem of products and users. Meta’s various products, including social media services and virtual reality consumer electronics, complement each other. For instance, Oculus headsets support Meta’s strategic objective of growing its metaverse presence. Similarly, the popularity of services like WhatsApp and Messenger encourages users to consider buying Oculus headsets for experiencing the metaverse. The organizational structure or corporate structure of Meta Platforms (Facebook) matches business organizational needs in order to maintain the ecosystem-based strength noted in this SWOT analysis.
Weaknesses (Internal Strategic Factors)
Meta’s weaknesses create obstacles or difficulties in growing the business. In this SWOT analysis, such internal factors can prevent the social networking and digital advertising company from increasing its revenues and profits. The following are among Meta’s major weaknesses:
- Low diversification, with primary dependence on social networking
- High vulnerability to online advertising trends
- Imitable business model and services
Meta mainly relies on revenues through its social media, social networking, and instant messaging services. Advertising revenues on Facebook, Instagram, and Messenger constitute the bulk of the company’s earnings. In this SWOT analysis, the dependence on advertising on social media is a weakness that makes Meta Platforms vulnerable to sociocultural trends affecting social media usage. Similarly, this SWOT analysis identifies the company’s vulnerability to downtrends in digital ad spending. For example, regional or global crises can reduce advertising budgets and, consequently, decrease ad spending on social networking platforms, like Facebook. The imitable nature of Meta’s business model and services is another internal strategic factor that is a weakness significant to this SWOT analysis. Although the company is among the world’s most popular, other large businesses with technological capability can create similar platforms to compete with Meta’s services and brands, such as instant messaging services, and e-commerce or social commerce.
Opportunities for Facebook and other Meta Products (External Strategic Factors)
In this part of the SWOT analysis, the external factors that create conditions for growth and success are considered in examining the industry and market environment of the social media and metaverse business. The following external strategic factors are among Meta’s main opportunities:
- Business diversification to limit reliance on digital advertising
- Market penetration and development to increase revenues
- New partnerships and alliances with third parties to support stronger presence in the metaverse
Business diversification can improve Meta Platforms. This opportunity addresses the issues of primary dependence on social networking, and vulnerability to online advertising trends, which are weaknesses identified in this SWOT analysis. For example, additional businesses can complement the company’s existing operations, such as Facebook, Oculus VR, Instagram, and others. In relation, Meta has the opportunity to increase revenues through market penetration and market development. In this SWOT analysis, such an external factor can lead to business expansion, which supports brand popularity and corporate competitiveness. Meta Platforms Inc. can fine-tune its marketing mix or 4P, including Facebook’s marketing mix, to support market penetration and development. Furthermore, new partnerships and alliances are an opportunity relevant to this SWOT analysis of Meta Platforms Inc. Through this opportunity, the company can develop mutually beneficial agreements with other organizations, to optimize the metaverse. Such agreements can focus on marketing strategies, information technology capabilities, and other aspects. Also, mutually beneficial partnerships and alliances with educational institutions, non-profit organizations, and foundations can improve Meta’s (Facebook’s) stakeholder management, and corporate social responsibility and corporate citizenship initiatives. Such an improvement can contribute to the brand strength identified in this SWOT analysis of the social media corporation.
Threats (External Strategic Factors)
The threats to Meta Platforms, Inc. can impede growth and decrease business profitability. In the SWOT analysis model, these external factors come from a variety of sources, including other social media companies and information technology platforms. The following are the major threats to Meta:
- Competition, especially in the online advertising space
- Sociocultural trends that reduce Facebook usage
This SWOT analysis highlights competition as the main threat, especially when considering Meta’s operations in e-commerce (social commerce), social media and social networking (Facebook, Instagram), instant messaging (Messenger, WhatsApp), digital advertising, consumer electronics (Oculus VR), and video content production and distribution. The company competes with eBay’s marketplace; Microsoft’s Skype, LinkedIn, and Ads; Google’s digital ad network, social media, and streaming services (including YouTube); Snapchat’s, TikTok’s, Twitter’s, Amazon’s, and Walmart’s digital advertising businesses; and Disney’s, Netflix’s, and Sony’s video content production and distribution. Even Apple’s digital advertising service within its closed ecosystem is a Meta competitor for advertising budgets. These competitors impose a strong force against Meta Platforms and its products, making competition the most significant threat relevant to this SWOT analysis.
Sociocultural trends that reduce Facebook usage is another major threat against Meta Platforms. This SWOT analysis considers such an external strategic factor in terms of how it affects the demographic characteristics of the social networking service’s user base. Studies show that younger people are using Facebook less, and are more engaged in using rival services, such as TikTok and Snapchat. This external factor leads to the aging and possible shrinking of Facebook’s user base, which affects Meta through advertisers’ use and spending on the social network. This part of the SWOT analysis reflects the social trends noted in the PESTEL/PESTLE analysis of Meta Platforms (Facebook).
Cybercrime is another threat significant to this SWOT analysis of Meta Platforms Inc. This external factor threatens the company’s privacy and security, which influence people’s confidence in using social media services. This threat keeps the company always on alert to protect users’ information with its services, like Facebook and Instagram. In addressing cybercrime in this part of the SWOT analysis, Meta’s (Facebook’s) operations management maintains effectiveness in supporting security and privacy measures.
Considerations and Recommendations – SWOT Analysis of Meta Platforms (Facebook)
As Meta evolves and focuses on developing the metaverse, the company needs to address some of the major issues identified in this SWOT analysis of the business and its environment. The internal analysis shows the negative effects of high dependence on social networking and advertising revenues, especially on Facebook, Instagram, and Messenger. The external analysis within this SWOT analysis of Meta underscores competition, cybercrime, and the aging population of Facebook users, as young people increasingly choose alternative or competing services.
To strengthen the business against the issues and challenges shown in this SWOT analysis, Meta Platforms Inc. can diversify to create new revenue channels other than social media advertising. The company can also implement market penetration and market development to increase its market share, especially in areas or market segments that have a relatively low rate of adoption of its social networking services, like Facebook. Furthermore, alliances and partnerships with other organizations can enhance Meta’s business performance. These recommendations focus on strengthening the metaverse and digital advertising business, to make the company less vulnerable to the threats outlined in this SWOT analysis. Improvements to Meta’s (Facebook’s) organizational culture or corporate culture can also support innovation, to attract younger users to the company’s services.
- Akgül, Y., & Uymaz, A. O. (2022). Facebook/Meta usage in higher education: A deep learning-based dual-stage SEM-ANN analysis. Education and Information Technologies, 27, 9821-9855.
- Benzaghta, M. A., Elwalda, A., Mousa, M. M., Erkan, I., & Rahman, M. (2021). SWOT analysis applications: An integrative literature review. Journal of Global Business Insights, 6(1), 55-73.
- Helms, M. M., & Nixon, J. (2010). Exploring SWOT analysis – where are we now? A review of academic research from the last decade. Journal of Strategy and Management, 3(3), 215-251.
- Jain, V., Ajmera, P. & Davim, J.P. (2022). SWOT analysis of Industry 4.0 variables using AHP methodology and structural equation modelling. Benchmarking: An International Journal, 29(7), 2147-2176.
- Johnson, D. (2017). Activating activism: Facebook trending topics, media franchises, and industry disruption. Critical Studies in Media Communication, 34(2), 148-157.
- Kraus, S., Kanbach, D. K., Krysta, P. M., Steinhoff, M. M., & Tomini, N. (2022). Facebook and the creation of the metaverse: Radical business model innovation or incremental transformation? International Journal of Entrepreneurial Behavior & Research, 28(9), 52-77.
- Laor, T. (2022). My social network: Group differences in frequency of use, active use, and interactive use on Facebook, Instagram and Twitter. Technology in Society, 68, 101922.
- Meta Platforms, Inc. – Form 10-K.
- Meta Platforms, Inc. – The Metaverse is the Future of Digital Connection.
- Piranda, D. R., Sinaga, D. Z., & Putri, E. E. (2022). Online marketing strategy in Facebook Marketplace as a digital marketing tool. Journal of Humanities, Social Sciences and Business (JHSSB), 1(3), 1-8.
- United States Department of Commerce – International Trade Administration – Software and Information Technology Industry.