Case study -

FACEBOOK: THE EVOLVING STRATEGY

QUESTIONS

1. Whittington has distinguished four theories of strategy based on two dimensions: (1) the extent to which the perspective assumes a profit-maximising motive versus more pluralist motives, and (2) the extent to which the theories assume that strategic management is a deliberate, rational planning process versus an emergent process.

Which of the four theories of strategy (Classical, Evolutionary, Systemic or Pro-cessual) suggested by Whittington do you think Facebook has adopted? Justify your answer giving examples from this case study.

2. There are two approaches to ensure a business is competitive: (1) set a lower price for the product than the competitors, or (2) incorporate 'added-value' to differentiate the product in the eye of the customer. Without the ability to compete on price (social net-work sites are free of charge), Facebook has had to add value to attract customers (site users). List five features of Facebook that add value for users.

3. When Facebook was listed publicly, the company suddenly had to satisfy the needs of thousands of shareholders along with its millions of users (customers). What parts of the business do you think the shareholders focus on and how does this change the strategic focus of the company?

4. Discuss corporate governance and corporate social responsibility with regard to Face-book's privacy policy.

5. As a global business, Facebook benefits from a global strategy. What are the two main reasons why a global strategy can provide a greater degree of security than a simple national strategy? List five other benefits that companies can gain from a global strategy and discuss these in relation to Facebook.