Essay on Facebook, Strategic Management Analysis

2633 Words11 Pages
Business Policy and Strategy

Case Based Component Paper #1

Environmental Scanning


Samantha Stephenson


An environmental scanning refers to the process that systematically uses information about trends, patterns and relationships within an organization’s internal and external environment to determine the future direction of the organization. Through an understanding of the nature and speed of changes in that particular environment, an environmental scan is likely to help identify possible ventures, challenges, and developments that are important to the organization. An organization that could benefit tremendously from strategic planning and especially
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Wheelen et al. (2012) mentioned that the number of possible strategic factors is very high because each country can be represented by its own exclusive sets of societal forces. Some well-known strategic forces includes: economic forces, sociocultural forces, and political-legal forces.

1 The Economic Forces

The Economic Forces of the environment alludes to the combination of economic systems of the country, the structural framework of economic policies of the government and the organization of the capital market, the type of endowment, business cycles, and the socio-economic infrastructure of the organization. A drift in the economic area can have effect on social media like Facebook. For example, in 2011 Facebook reported $1 billion profit with 85% coming from advertisement. A weak economy will lead to less sales and subsequently advertising. Equally, a drop in interest rate will mean sales of electronic products and services. The economic development of countries like Brazil, Russia, India, and China is having huge effect on the rest of the world, especially in areas of computer software and telecommunications. An increase in income will also likely to lead to an increase in spending for electronic products and investments in social media services. These factors should present
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