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MGT 247 Corp Scope - Second Mandatory project focusing on Facebook.
Introduction to Strategic Management (MGT 247 )
Syracuse University
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Corporate Dimensions/ Scope Company: Facebook
Please provide just one example for the first and third categories and provide a source for each category. For instance, there may be multiple examples of vertical integration but only choose one. Each of your companies competes in international markets but please give one example. Please make sure you have also answered the recommendation question for each category as well.
In the grading of this assignment I will be emphasizing your recommendations.
1 Scope (integration) Example:
Media / Content (The creation, distribution, service of media and content)
Illustrate a typical industry value chain. In other words, show how your example illustrates vertical integration using the picture of the value chain.
Should it compete in any more stages? In other words, should the company engage in more vertical integration across more parts of the value chain? Please explain your answer.
One of the Vertical Scopes Facebook is involved has to do with the creation and delivery of media. Currently Facebook mainly focuses on the Outbound Logistics and Marketing and Sales of this value chains. They achieve the outbound logistics part of the value chain by having a platform which distributes media content to users. The marketing and sales part of the value chain is achieved through matching of advertisers to different media, and the connection of specific advertisements to users based on algorithms. Currently, Facebook has moved and started to create their own original content, this adds to the value chain through the operation activity. Rather than relying on third parties for content, creating their own has allowed them to capture another part of the value chain.
Facebooks also add to the value chain through their support activities, which includes firm infrastructure, human resources management, and technology development. They capture firm infrastructure by employing their own legal, finance, and communication teams. They also employee their own human resources team which helps them capture another support activity. Facebook also supports technology development through their R&D activities. (10K, Page 40)
No, I do not believe they should consider targeting anymore of the value chain for this vertical. In my option Facebook has already made the most profitable move in this vertical by cutting out the content creator. Additional moves to capture the vertical could be hiring a staff of content creators, signing actors to multi
project deals, or they could move to offer service such as internet to the users of Facebook. Both of these options would take high amounts of capital and have extremely high risk therefore I do not think Facebook should continue vertical integration in this scope. 2. Product Scope (Diversification)
Give examples of diversification and label them as related or unrelated to the company’s core business.
What different industries does the company compete in? Provide a list of about 3.
Which products/ services does it offer in these industries? Give one example per industry and state whether it is an example of related or unrelated diversification. What additional products do you recommend the company offer, (beyond the examples that you provided and what they already do)?
Classify your recommendations as representing related or unrelated diversification.
Social Media
Messaging
Virtual Reality
Social Media – Instagram a. This product is related diversification to Facebook, because it shares a similar industry space as the main business of Facebook. While varying in the view and usage of clients they both operate in the social media industry and focus on advertisers as a main source of revenue.
Messaging – Messenger App a. This product is related diversification because it is used as an extension to the main business of Facebook. While operating on an independent application, this product has a lot of cross functionality and usability within the Facebook platform. This product also focuses on connecting people and sharing information which is like the focus of Facebook’s main business.
Virtual Reality - Oculus a. This product is related diversification because the business is still within the technology sector. Oculus is not as closely linked to the main business as Instagram or Messenger, but it does share some competencies that Facebook has from being within the technology field. The ability for sharing of these competencies between Facebook and Oculus helps define this product as related diversification.
MGT 247 Corp Scope - Second Mandatory project focusing on Facebook.
Course: Introduction to Strategic Management (MGT 247 )
University: Syracuse University
