Business Case Presentation
Table of Contents
- Given our current positioning, what are the critical aspects of the broader macro and industry environment we need to understand the most?. 3
- What are the biggest challenges in our current competitive landscape? Which competitors should we be most concerned about? How should we respond to them?. 5
- What are the most important ethical and social issues that we currently face? How should we respond effectively to them?. 6
Introduction
The success of a business organization depends upon the process in which the commercial activities are being executed. The main objective of a business is to earn profit, and hence, the organizations aim to increase their profit margin by implementing different useful strategies. However, there are several challenges that the organizations tend to face in this current changing business environment, which block their way towards attaining competitive sustainability. Facebook and Alibaba Group are two such companies, which have a considerable market share, yet experience issues while performing their activities in their respective sector. While Facebook is a renowned social media platform, Alibaba Group is a wholesale retailing e-commerce website. Both of them have managed to establish their business sustainably in the global market. Facebook is considered to be the global leader in the field of social media, whereas Alibaba stands in the 9th position in the list of brands with the highest global value (Sundaramurthy, 2015). These two companies are associated with different fields but are globally renowned for their business practices. The only common thing between these two organizations is their ability to utilize the digital platform for gaining value. For this specific assignment, the primary emphasis will be on Facebook, and its market operations and internal business strategies will be contrasted with those of Alibaba. The current positioning of both the companies and their social and ethical issues will be discussed thoroughly to attain a deeper understanding of the strategies and practices that they should incorporate in order to achieve success in the upcoming years.
1. Given our current positioning, what are the critical aspects of the broader macro and industry environment we need to understand the most?
The performance of an organization is dependent on several macro-environmental factors. Organizations must analyze these factors to understand the ability of the business to sustain in the existing market condition. The primary external factors associated with a business can be identified through a PESTLE analysis framework:
Political aspects: For a business to succeed, it is essential to ensure that the region where the companies operate has political stability. Facebook is banned in China, and this is a huge setback for them from a business perspective. The political influence can influence the operations of a business (Yang, 2019).
On the other hand, the government plays a significant role in contributing as well as monitoring business organizations. Alibaba is a Chinese company, is affected because of the lousy trade relationships between China and America. To achieve progress, this organization needs to expand in every part of the world. Thus it is crucial to consider the political aspects of the region before they develop therein.
Economic aspects: Most of the developing nations have a stable economy, which makes it easier for Facebook to operate efficiently. The stable economy of a society provides organizations with the opportunity to develop and grow sustainably. Contrarily, Alibaba successfully operates from China, and the country has a stable economic condition, which helps this company gain progress in the long run.
Social aspects: In the case of Facebook, they need to identify the user’s expectations and requirements to perform accordingly. Primarily, social media aimed to focus on the young generation and their business strategies. Facebook needs to focus on the aspect of cultural differences and hence need to implement the changes considering the ones that can benefit the organization in the most effective way. Just the way it offers services in 100 different languages. Similarly, every state has its own culture and perspectives, which a business that is operating in that concerned state needs to follow strictly.
But in the case of Alibaba Group, the social trends keep changing, and for a business to achieve success, it is important to understand these trends better and hence perform accordingly. Alibaba has successfully managed to establish in the Chinese market. However, they have faced several issues while building their business in other regions of the world.
Technology aspects: Facebook, being a social media site, is entirely dependent on the element of technology. This service is available in 100 different languages — every minute they have over 317000 status updates and about 147000 photos uploaded. Facebook invests a significant amount of money in research and development in the field of technology (Wells et al., 2017).
Just like Facebook, Alibaba too invests a significant amount of money in the research and development in the field of technology (Kim, 2018). Alibaba has flourished cause of the latest technological trends. The company is also considered to be one of the leading organizations using the cloud, which is a global network of servers. It is also believed that Alibaba has bought an entire web service for their customer’s convenience.
Environmental factors: Facebook operates on servers and other upgraded technologies that may harm the environment. The environment is a severe concern in the modern world may lead the company to move its operations hub to different locations considering the negative impact it has on the environment.
Alibaba takes all the necessary steps to ensure that it’s business procedures do not affect the environment. As a result of which this aspect does not have a significant impact on the operations of the business.
Legal aspects: The ban in China and the Cambridge Analytica scandal are the outcomes of severe legal restrictions. Every nation has its own set of laws, and any business that aims to operate in that region needs to follow these rules and regulations. These legal aspects can prevent the organization to grow sustainably.
Compliance is an essential external factor for Alibaba. As they deal with a variety of products, hence it is important to ensure that they offer quality products. Apart from the aspect associated with the quality of products, they also need to consider the laws related to labour and other features of business to experience better performance.
2. What are the biggest challenges in our current competitive landscape? Which competitors should we be most concerned about? How should we respond to them?
Every business is prone to facing a number of uncertain situations and the ability of the business to deal with these uncertain situations decides the efficiency of the business. The digital platform allowed several companies to flourish, and Facebook is one of these businesses. Considering the present competitive landscape, there are two challenges that have been identified for Facebook, which are mentioned as follows:
General Data Protection Regulation: In EU, Facebook has been facing a big problem that is associated with the General Data Protection Regulation. This new policy went effective on the 25th of May 2019, which has affected all the organizations having a digital presence in Europe to implement the changes associated with their privacy policies that follow these new rules and regulations. AI is a technology that is being used by most of the companies to analyse the user’s preferences to identify the potential buyers of specific products or services. Facebook earns the right amount of revenue from advertising, and hence it is quite challenging for Facebook to deal with these changes effectively (Effing, 2016). To deal with this situation, Facebook has already started to open more advertisement inventories on another popular application, Instagram.
Engagement and growth of user: Facebook currently has over 2 million active users, and at one point in the future, they might have to settle for the number of active users that they have, as there will be no opportunity to grow their customer base. Facebook has revealed that they experienced a 5% drop in their number of active users since they made some changes in their news feed in the last quarter in 2018. The main objective of this company is to keep its audience engage in different activities on their site and hence, constant development in terms of engaging their customers may get challenging in the future.
To deal with these challenges, Facebook needs to develop effectively in the future to ensure that their customers stay engaged to their site. Facebook brought a revolutionary change in the digital world and failed Orkut, which was a social networking site owned by Google (Tan et al., 2015). Facebook certainly has a threat of any new entrant in the market. The biggest competitor of Facebook is Google, although Google is used for a different purpose, yet they both have their businesses established on the digital platform.
On the other hand, the main rival of Alibaba is JD.com. JD.com has teamed up with a number of Chinese language websites for the purpose of business to consumer retail sales on the digital platform. Globalization has made it difficult for all the organizations as the market competition is increasing rapidly (Jia et al., 2018). To deal with this situation effectively, the business needs to perform appropriately, considering the customer’s requirements. Both Alibaba and Facebook are globally renowned organizations, and their only concern is to maintain their position in the market. Both these organizations are customer-centric in nature, and hence the regular analysis of the market to understand the customer’s demands is something essential that will help them identify the changes that can improve their performance in the future.
3. What are the most important ethical and social issues that we currently face? How should we respond effectively to them?
The term ethics refers to the principles and norms that help in distinguishing between right and wrong. Some of the fundamental ethical issues faced by a business include the implementation of diversity and aspects associated with promotions (Mizrachi et al., 2015). Facebook has faced several accusations associated with its involvement in unethical activities. In Russia, they faced an allegation of using the means of advertisement to manipulate public opinion, and in the United States of America, they were accused of providing personal data of 87 million Facebook accounts without the knowledge of the users. Zuckerberg had to appear before the joint U.S Congressional hearing to provide proper justification for being involved in this unethical act. Counterfeiting is considered to be a crime that consists in producing as well as distributing goods without the permission of the original manufacturer in the name of somebody else. In China, Alibaba has been accused of providing a platform for counterfeit goods, which has led to a massive credibility crisis. This accusation has not just tainted the reputation in the market; it also had a severely negative impact on their relationship with the government of China and the investors.
Most of these business organizations that operate on the internet get themselves involved in several unethical practices. It is the primary responsibility of the organizations to ensure that any of their business-related activities do not harm society. There is nobody to monitor one’s actions on the internet, and hence, these companies need to implement better policies to ensure that the internet is a safe place to be in. Alibaba had to spend over $ 160 million to address the issues of counterfeiting (Romagnoli et al., 2017). These issues not only tarnish the reputation of the company in the market, but it also hurts the overall performance of the business. It is hence necessary to ensure that these cases do not occur in the first place. Being customer-centric organizations, companies need to ensure that they have gained the faith of the customers. Once the reputation of a company is tainted, it gets tough for the company to earn the same status back. The companies need to strengthen their ethical policies and implement changes when they feed the requirement of it.
4 How might the critical aspects of our company strategy (development, execution and growth) continue to be improved to help ensure success into the next 15 or 20 years?
Facebook has a mission of providing the public with the power to develop a community through which they stay connected and stay together. Billions of people are connected through Facebook. Furthermore, Facebook has also become the marketing hub for a large number of organizations. The company addresses the issue of business development very seriously and look for business opportunities to provide their business to grow (Pinto et al., 2018). Maintaining sustainability is an important aspect associated with business and especially for a business that is already well-established. Customers have high expectations from these organizations, and hence, it is a basic necessity for these companies to meet their customer’s expectations. Development needs to be the only constant that can ensure success in the future. Facebook has managed to acquire this place in the market as they have developed efficiently, and people enjoy using new features and applications.
Facebook believes that business development can be achieved by developing in all the operational departments in the organization (Greeven et al., 2017). They believe in analytical driven business decision-making procedures and hence train their employees to be efficient enough to practice the same in their tasks. The aspect of business and strategic planning on Facebook includes:
- Collaboration with competent partners as well as other stakeholders to develop significant business initiatives along with planning resources
- Efficient decision making and further successful implementation of these decisions
- Identifying areas that need improvement and further implementing the required changes
It is believed that innovation is the key to development. For Alibaba, it is essential to gain the trust of their customers and hence increasing the number of customers as well (Tse, 2015). Every business aims to achieve two aspects, which include the expansion of trade and rising revenue returns. Both of these companies need innovative ideas to increase their number of customers. Technological advancement has enhanced the expectations of the customers, and this puts the company on the pressure to perform better. There remains the threat of new entrant, and proper market surveys will help them identify the potential competitors (Leavy, 2019). It is essential to monitor the activities of the competitors. Increasing user engagement will ensure growth in revenue, which will contribute to the progress of the organization.
Conclusion
Business is a complicated procedure that needs to be executed with the utmost care and passion. Several aspects together on the right track can ensure the success of a business. This paper discussed two companies (Facebook and Alibaba Group) and analysed their present business procedures. The main challenges faced by these companies were identified, and further recommendations were made on how the situation can be handled. Progress is an essential aspect of every business, and it can be achieved by increasing the number of customers. Both these organizations already have a vast amount of customers, and they need to implement effective strategies that can ensure the increase in the number of customers. Every business needs to follow some basic ethics and should ensure that they do not hurt society. It has been observed that both these companies have been accused of unethical practices in the past. It is important for them to ensure that they do not involve themselves in any such similar cases in the future. These two companies have maintained their position in the market for quite some time now, with all the experience that they have till now, it can be concluded that they will manage to maintain their position in the market in the future as well.
Reference
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