The Impact Of Social Media On Domestic And International Markets

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Industry Overview: Social Media is defined as, “forms of electronic through which users create online communities to share information, ideas, personal messages, and other content.” Today, approximately 800 platforms are used by more than 3 billion active users; of which 45% have a social media accounts. In spite of numerous mergers and acquisitions, the numbers of sites are expected to increase in the near future, as new technology and devices present growth opportunities in the domestic and international markets. Growing advertising spending and rising disposable income levels are expected to benefit the industry. Facebook, Twitter and other platforms have generated increased revenue growth due to increases in mobile advertising. …show more content…

Porter’s Five Force Model: Porter’s five-force model is an effective analytic method used to identify the strengths and weakness with business model. The main objective is to find a position in an industry where a company or can compete with or against competitive forces. Porter’s Five Forces analyst chart - Facebook Porter Five Force Intensity Risk of New Entrants High Competitive Industry Rivalry High Bargaining Power Of Buyers High/Low Bargaining Power Of Suppliers Moderate Threat of Substitutes High Power of Compliments Low Risk of New Entrants: The risk of the threat from new entrants is high. Social media platform is constantly evolving into rapid innovations of mobile technology, new sites and applications. The evolving mobile landscape will result in newer entrants to the market. With very little government oversight or regulation, no switching cost and tenuous brand loyalty barrier to entry is low. However, a significant amount of resources is required for startup, thus slightly increasing the barriers to entry. Competitive Industry Rivalry: Google Plus, SnapChat, and Twitter are among to top competitive rivals of Facebook. They not only compete with Facebook for market share, but also advertising dollars from companies through targeted marketing. As the domestic competition intensifies, Facebook also faces pressure from international social networks, such as Ibibo in India, Cyworld in South Korea, Vkontakte in Russia, Mixi in Japan and Renren

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