Segmentation of the market
the niche marketing type purpose id to provide a unique segment in the existing market. For instance, there could be services that have less or no competitors. Every business has a crucial element, and that is the consumers that the company is targeting. It is more significant for a business leader to understand the consumers the industry deserves rather than knowing the existence of a product in the market. Therefore, consumer segmentation is an essential factor to consider, which could mean splitting the target market into small pockets of consumers. Every consumer is seeking a wide range of characters, features, and needs. With the use of market segmentation, the organization can classify larger zones into smaller, which can be easily reached. The process of segmentation of the market can be based on the needs of the consumer. Which could also be in different groups.
These groups could be the process of dividing the consumer based on their geographical location. It can be found on the demography, such as the marital status or date of birth—the life cycle and personality of the consumer, which could be a psychographic differentiation. The business market could include the number of staff, annual revenue, and company size. Classification of the consumer based on their behavior, profit, and purpose.
Choosing a niche market is one of the powerful ways of targeting the market. The process of the identification of the channels could be the nest step. Since most of what Facebook does is online, the channel that will be applicable in this case will be online. It is also important to take consideration of the brand building and value proposition.
Porte Five forces analysis
This model analysis can be widely used in finding out the competitive advantage among the various companies which exist in the same industry. Furthermore, it can also provide different inferences. It can look at different people who compete with one another and the various factors that give a person the level of competition in different industries.
Competitive rivalry
Even though Facebook is leading in the social media market position, it also experiences a significant impact due to competition. Even though there could be only a small number of companies offering online adverting services, they could exact force facebook. These companies include YouTube, which is also a subsidiary of Google. However, with the variety of these firms, they also help attract advertisers, thereby the force that they are imposing is moderate.
The low switching costs make it easier for the advertiser to switch from one company to another.
Threat of competitors
This factor is essential in consideration of the number of competitors that Facebook has. Considering also that there cou;d be other competitors who could be providing similar services at an even earlier time scale. In the online world, competition is highly intensive due to the number of competitors who pose a threat to the company. The competition is even much power from the companies who have been offering such services for a long time. They are also investing a lot of money in the development of new technologies. The degree of competition could be due to the high number of rivals and no cost differentiation.
Just like any other business, Facebook is also skeptical about competition. At the moment, Google is the top ad choice, while Amazon, Microsoft, and Apple have all the resources to put Facebook on its toes.
Alternate product threat
The availability of a close substitute
The business performance of Facebook could potentially reduce due to substitutes. This could create challenges with the social media environment of the industry. It is also effortless for the advertisers to pay for alternatives such as radio, printing, and television. Factors that could lead to the creation of substantial threats of substitutes are the low switching costs, high availability of a reliable alternative, and the moderate costs of the substitutes.
In all technology companies, the rising problem is data breaches and privacy concerns. In the year 2018, Facebook was in the headlines due to its data management issues. Issues like this could make the consumers look for a close substitute. However, it is due to this that Facebook has diversified and collected Instagram and WhatsApp under its umbrella.
The threat of new entrants
The company could also face the adverse effects that could come with the new entrants. They exert a potent force on the social media giant due to the low switching costs, which is the little difficulty of the advertisers moving from one service provider to another. However, it could also be challenging to develop a reliable and popular social media similar to what Facebook has. It can also be challenging to build the loyalty of the advertisers and the users. It is due to this external thereat that weakens the threat of anew entry. In the strategic formulation of the company, new threats are a minimal issue; this is also based on the analysis of the five forces.