Table of Contents
Executive Summary
This paper presents a strategic analysis of Twitter Inc. and provides business strategy recommendations for the modern day and its future that aim at changing the company’s declining dynamics and ensuring sustainability of its competitiveness. The paper begins with an introduction that provides a background on Twitter Inc. It has a strategic analysis that presents Twitter’s external environment, competitors’ analysis, drivers for competition, and aspects of internal environment under which the company is run. The paper then presents a strategic formulation highlighting proposed mission and vision, existing strengths of Twitter, new competitive advantages, tracking of competition and strategic recommendations toward effective competitiveness. The strategic implementation maps out the various recommendations.
Introduction
Twitter was founded in 2006 and officially launched in July of the same year (Grant 2016: 32). Twitter involves ‘Tweeting,’ and is primarily broadcasting of short messages in the form of texts, images and videos to the world with the aim or hope that the broadcasted information will reach the target audience or someone who is interested in the information bunch. Additionally, Twitter is about meeting interesting persons over the internet and following the information that they post or rather tweet for as long as the follower perceives them interesting, useful or both. Twitter is a social media company that a few years after its initiation gained robust popularity the world over and attracted users from teenagers to celebrities and politicians attempting to sell their policies. Also, the business community uses the platform for marketing purposes. Twitter enjoyed a steady and continuous growth right from its initiation in 2006, with the number of users initially growing slowly but picking up rather rapidly. The company continuously made efforts to grow and expand. The company introduced new homepage in 2011, partnering with a Russian search engine known as Yandex in 2012, opening an office in Detroit in the same year, and by 8th December 2012, it announced it had hit more than 200 million active monthly users (Armstrong et al. 2015: 102). The company became publicly traded after registering for an IPO and started trading on the New York Securities Exchange on November 7th, 2013. However, the company has been facing challenges of slow growth from 2016 from factors such as increased competition and slow user growth that has subsequently led to a reduction of its standing among social media companies and in financial returns (Grant 2016: 37). This paper provides a critical analysis of Twitter business environment, business strategies and insight into its future strategic performance including recommendations.
Strategic Analysis of Twitter
It is necessary to understand the dynamics operations of the Twitter inform before the formulation of strategies that will solve the emergent issues and their subsequent implementation. Conduction of a critical analysis of Twitter enables the identification of the challenges and issues that Twitter faces and thus allow formulation of solutions and subsequent implementation. This analysis involves understanding the operational environment of Twitter, both its external business environment and its internal business environment.
External Environment Analysis
In order to rightfully determine the problems that Twitter faces that has led to the decline of profits, the user joining rates and reduction in stock market pricing, it is important to understand its external environment. The external environment of Twitter comprises of the political environment, the economic environment, the technological environment, the social environment, the legal environment and the ecological environment as presented by the Pestle analysis in the Appendices. To begin with, Twitter relates to politics since it has brought changes to the political landscape as politicians post political post over the platform(Rosemann and vom Brocke 2015: 122). These posts allow for participatory politics as citizens of various countries can engage their leaders in political debates over the issues affecting them. The external environment of Twitter is also affected by the economics. Twitter has provided a platform for various business people to market their products and services (Montalvo 2016: 77). Over its operational years, various product and service provision companies have used the platform to market their products embracing E-commerce and to interact with their clients and answer questions that they may have. Companies have also placed ads with the company on Twitter sites and have they broadcasted to vary depending on the expenditure of the advertiser their allowing the Twitter and the advertising companies’ revenue (Crane and Matten 2016: 111). The Twitter thus benefits from such advertising arrangements and the thus the strategies initiated should protect such avenues and maintain such beneficial relationships.
Nonetheless, changes in the social environment of the company affect the revenue and competitiveness Twitter (Cummings and Worley 2014: 68). Being a social media company, the company thrives on how much they are able to identify and align with changes in the behavioural patterns of the social scene. It is in the best interests of the company that it invests in understanding the dynamic shifts of the social scene and take initiatives that change with the changes in the scene. Marketing patterns, for example, changes from time to time and the company must be aware of such changes to facilitate initiatives to availing marketing options congruent to the trending social patterns (Hill, Jones and Schilling 2014: 104). Technological changes and advancement additionally affect productivity and competitiveness of Twitter (Wheelen et al. 2017: 93). Being a company that thrives on technology, it is important that the company should be at the forefront in the adaptation of new innovations in order to sustain subscribers and attract new users. Initially, before Smartphones became popular and widespread, Twitter was accessible via the internet using web browsers only, but with the invention and popularisation of Smartphones, the company launched a Twitter App that mobile phone users can install and easily access and use services provided by the company (Hockerts 2015: 108). In so doing, the company was able to adapt to the changing technology in the provision of its services.
Nevertheless, the legal environment of Twitter also determines its competitiveness and profitability (Montalvo 2016: 79). Twitter has in its operational years faced challenges of free speech, cyber stalking and cyber security issues where users get stalked my malicious persons or hacked remotely (Rosemann and vom Brocke 2015: 107). Such occurrences raise legal concerns, since the company should be guarantee user security and confidentiality of personal information. Additionally, the company faces legal risks including malicious tweets by users, Impersonation and defamations. Finally, the company’s relation to the environment also affects its image and reputation (Rothaermel 2015: 66). By engaging in the promotion of environmentally friendly products and conservation campaigns, the company gains favour among users, environmentalists and governments thereby easing operations. However, the company’s data centres consume a lot of power and the company needs to do more to oust competitors on power management plans for its data centres. This is since environmentalists have raised concerns at the amount of data consumed by large social media companies such as Twitter and Facebook.
Competitor Analysis and Mapping
The social media platform has in the modern day has many active players. Some of the popular social media platform aside from Twitter include Facebook, Google, Instagram, WhatsApp, WeChat, Tumbler, LinkedIn, WhatsApp and Skype amongst others though Instagram and Whatsapp have been bought by Facebook (Crane and Matten 2016: 109). Nonetheless, some of the key competitors of Twitter include Facebook Inc., Google LLC and LinkedIn Corporation. These are both companies that provide users with messaging services, Chatting platforms, allows the meeting of new persons online and sharing of information including texts, pictures and videos over the internet. While the social media market is large, competition is stiff with new companies growing up daily and much more predicted to rise (Cascio 2018: 75). The difference between these companies thus is based on the quality of the services they offer the users, security and privacy dependency levels and their availability to adapt to changing social dynamics effectively amongst others.
One of the key competitors of Twitter is Facebook, a company that is argumentatively the biggest social media platform at the moment (Johnson 2016: 101). Formed only two years before Twitter in 2004, Facebook boosts of up to 2.2 billion actively monthly users as of the 2017’s fourth quarter, against Twitter 330 million active monthly users as by the 3rd quarter of the same year (Hockerts 2015: 121). This indicates that Facebook registered more active users than Twitter in 2017 making an effective and serious competitor for Twitter. Facebook revenue for the 4th quarter of 2017 stood at 4.3 billion against Twitter’s $717 million in the same quarter indicating that Facebook is a powerful competitor for Twitter (Hill, Jones and Schilling 2014: 94). Twitter additionally recorded a drop in its revenue standings in the 1st quarter of 2017 and failed to hit the projected $740 million for the fourth quarter (Wheelen et al. 2017: 43). Facebook, however, bought Instagram in 2012 and WhatsApp in 2014 making expounding its boundaries.
The other key competitor of Twitter is Google. The Google Company has over 500 million active monthly users on Google Photos and a further up to 2 billion users on the Android platform making its users more than those of Twitter (Slack 2015: 124). Google has a varied seven unique products with each registering over a billion active users monthly (Madsen and Walker 2015: 97). Google thus, is a great competitor for Google.
There may nonetheless be significant changes in completion in the future since social media preferences change rapidly for people (Effing and Spil 2016: 80). There may also be new players who speedily rise to the top in the future.
Drivers of competition, now and in future markets
Competition in the social media platform is driven by various factors from users preferences to changing social dynamics to improvements in technology. The first driver of competition is Technology (West, Ford and Ibrahim 2015: 108). The social media company that showcases the ability to exploit the emergent technologies in the most creative ways benefit by drawing in more users at the expense of the others. Twitter and Facebook both have features reminiscent of technology such as live video. In the future, companies that will tap into emergent technologies faster and more creatively will compete more effectively.
The other driver of completion in the social media industry is the number of product provisions (Felin, Foss and Ployhart 2015: 599). Companies such as Facebook and Google have varied product lines, thus attracting users from the various fronts. Google has seven services both attracting up to 1billion active users monthly while Facebook acquired WhatsApp and Instagram. How companies will continue to the tap users by offering variety will continue to define competition in the future.
Internal Environment Factors
Factors of the internal environment include resources, competencies and dynamic capabilities amongst others. To begin with resources, Twitter has enough resources that can facilitate competition and that renders it a competitive advantage over new and emerging social media platforms (Buckingham 2013: 71). The company is publicly traded and worth billions of dollars, money it can employ in instituting competitive advantages.
Twitter’s management has displayed competence on several grounds but not all (Rothaermel 2015: 81). While Twitter institutes strategies that seem relevant and strive to implement them, there seems to be a problem somewhere on the top since its top executives keep exiting the firm (Johnson 2016: 99). The Company needs to understand and solve the problem that results in this. While the issue is ported to be owing to power struggles, employees have additionally described their leadership as that with which bounces from one idea to the next and this is not good for competition.
Twitter has limitless dynamic capabilities based upon its years of operations, its financial might and its strong Brand. With these three combinations, Twitter can have the ability to engineer innovative and creative ideas and to implement them in manners that can draw multitudes of users. However, the many employees of Twitter have displayed little innovations over the past years with no robust invention that brings dynamic changes in the social media industry (Boone and Kurtz 2013: 78). Twitter must tap on its resources and exploit its dynamic capabilities to the fullest.
Strategic Formulation
A strategic formulation is a process by which a company or an organisation such as Twitter derives the most befitting course(s) of action to help it obtain its goals (Effing and Spil 2016: 89). The objective of Twitter is to stop the decline in the rate of user subscription and the decline in its stock exchange prices. This section proposes missions and vision amongst other methods of sustaining and ensuring competitive advantage.
Proposed Mission, Vision and Core Values
In order to display serious and communicate positive revolution to current and potential Twitter users, Twitter should redesign its vision and mission statement. Although the current mission and vision of Twitter are respectable, Twitter should modify it to appeal more to the users. Twitter should change its mission statement from “giving everyone the power to create and share information instantly without any barriers” to “Providing a channel for instant sharing of ideas, information, in an effective, fun and fast manner”. By appealing to fun, the mission statement will attract more of the younger generation.
Twitter’s values suggest its belief in free expression and that every voice has the power to impact the world. This values statement is strong and should be maintained as it is. Twitters strategy statement states that users can reach the largest daily audience through its platform of products distribution and information sharing and attain highest possible revenue generations from internet marketing which itself is effective and should be maintained.
Building on Current Strengths
The first competitive advantage that Twitter has is a strong brand (Buckingham 2013: 56). Over its operational years, Twitter has created for itself a strong brand name that is popular all over the world from amongst teenagers, to politicians and to the business community amongst others. This lends Twitter a Competitive Advantage of emerging social media platform or those that will emerge in the future. Twitter can, for example, come up with a new invention and within a few hours, it will be known to millions of people all over the world. Twitter must thus strive to safeguard its established brand and even seek to strengthen it further.
The other competitive advantage that Twitter has is every tweet that a user post goes to all followers instantaneously (Boone and Kurtz 2013: 88). This is an advantage that Twitter has over several social media platforms since Users can depend on the platform to broadcast information as fast as they can type it and press the ‘tweet’ button. The Owing to this, the business people can depend on their posts reaching the target markets within the shortest time possible. Additionally, sponsored or verified tweets are send are broadcasted to millions of users instantly according to specified customisations making it ideal for business people.
The other competitive advantage that Twitter has is that Tweets are rather easy to create and send (Armstrong et al. 2015: 41). Creating a Twitter post is easy and allows users to hit the point directly. Tweets are also relatively short meaning they can be typed and sent so fast. The retweet feature, a feature allowing views of a tweet to share it with followers allows these short tweets to make rounds quite fast and reach large crowds making it effective for sharing information and for adverting businesses and products.
Developing New Competitive Advantages
To compete effectively with the likes of Facebook and Google, Twitter should develop new platforms or products and services so as to have a variety of user destinations. Twitter may, for example, start a separate twitter branch that specifically allows users to share funny pictures. This will attract the users who love sharing pictures only to the platform. Twitter should also tap into its abilities to act as a disaster response and risk management platform (Cummings and Worley 2014: 55). This can be achieved for example by launching and popularising disaster awareness and response hashtags that are monitored and linked to governments to facilitate speedy disaster response.
Tracking Competition
Twitter should form a body that tracts the activity of big competitors such as Facebook and Google to facilitate speedy counter-response to any new products or services that such companies may launch that would otherwise draw users away. Through this, they will be able to channel resources towards creating services that prevent user lose to such inventions. Tracking completion will guarantee a competitive advantage as they will be at par with new innovations.
Strategic Recommendations
To begin with, Twitter should tighten its rules and programs regarding user hacking and cybercrimes to guarantee users safety of their accounts and their privacies. They should then communicate this new policy to users as it will offer security that users require to maintain and to join online platforms.
Twitter management should stop jumping from one idea to the next but take their time in deciding on an idea, evaluate it, and carry out its complete implementation and trial before moving to the next idea.
Additionally, Twitter must invest in innovations and take steps towards ensuring employee innovativeness. The company can organise bench markings for employees, offer employee motivation and treat employees in better manners that allow a sense of belonging and thus more productive work.
The company should expand social responsibility measures through advertising environment conservation ads free of charge. The company should also exploit its capacity to serve as a disaster and risk management platform. The company can team up with various administrations and launch hashtags specific to disasters that are monitored thus facilitating speedy response upon disaster occurrence.
Strategy Implementation
Although the implementation of the recommendations of this report would help better the position of Twitter, the implementation cannot be done once and thus should be based on the growth model. The implementation must be undertaken step by step to avoid resulting in scenarios of serious confusions. The method proposed for implantation is thus the growth method. The management should start with recommendations that are easiest to implement and work their way up. The company can, for example, start by tightening their program securities to guard against cybercrimes before dealing with the need for innovations.
This proposal proposes modified hierarchal structure that has a stipulated structure from the CEO to the customer attendant but allows room for employees with innovative ideas to present them directly to the management. This model will allow for more innovations in the company. The leadership should be inclusive of the management factoring employee opinions before making final decisions.
Twitter should also adopt a policy of managing complexities that may arise with the changes. This paper proposes the strategic map below provides the management of financial aspects, customers, internal business processes and for growth.
Conclusion
Twitter is a social media company that enjoys millions of users. The company, however, has released a reduction in the number users joining the platform and in the profits margins in the recent past. The factors of the external environment that affect the business include legal factors, environmental factors, political factors, economic factors and social factors. The company receives competition from various social media platforms key amongst them Facebook and Google. Its drivers of completion include technological advancements. Internal business factors include resources and personnel. To ensure sustainability, the company should build on its strengths including brand name and user numbers, should tap into disaster management capabilities, and should track competitors’ activities. The company should tighten programs security to avoid cybercrimes, implement one idea at a time, promote innovation and do more on co-operating social responsibility. The implementation should use the growth model, employ a modified hierarchical structure and inclusive leadership.
Appendices
SWOT Analysis
Image 1: SWOT analysis of Twitter https://www.swotandpestle.com/twitter/
PESTEL Analysis
Image 2: PESTLE analysis of Twitter https://www.swotandpestle.com/twitter/
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