17 Pages
4302 Words
Introduction - Twitter’s Strategic Challenges & Growth Opportunities
Strategic management tends to make focus on the formulation of effectual plan which facilitates optimum allocation and utilization of company’s resources. Twitter was created in March 2006 by Jack Dorsey, Biz Stone, and Evan Williams. It is a trailblazing force in the online networking space that has revolutionized communication and information sharing. With the ability to publish 140 characters in a “Tweets,” or brief updates, customers of this micro blogging site have played a significant role in affecting debates across the world. Twitter swiftly spread over the world, facilitating social media, political debate and immediate reporting. The Social media sector has grown rapidly, transforming the way that people and organizations interact and share information. Twitter was among the best 10 websites in the world in terms of traffic at the time the case report was created. Its impact was seen in the Arab Spring when it allowed for real-time reports on social upheaval, and it was also crucial to U.S. politics.
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Despite its enormous effect and achievement, Twitter has faced significant obstacles. One of the biggest challenges was turning its large user base and widespread appeal into consistent revenue. Even though it originally received a sizable amount of investment from venture capital, it has struggled to sustain steady financial performance. Its diversified user base which includes many users with little activity, inactive accounts, as well as active users has made it difficult to manage the involvement of users. Involvement and retention require constant work. Twitter competes with well-known social media behemoths including Facebook and up-and-coming sites including TikTok in a highly competitive market. Ongoing innovation is necessary to keep it relevant and appealing to consumers and marketers. Moreover, Twitter's worldwide presence puts it to intricate regulatory concerns pertaining to confidentiality, restrictions, as well as content moderation, frequently necessitating a careful balancing act between conformity and freedom of speech.
External environmental analysis for identifying opportunities and threats
As a group of consultants, the work is to scan Twitter’s business environment by analyzing external environmental using Pestle and 5 forces framework.
Pestle Analysis
The macro environmental structure utilized in the ecological scanning phase of strategic planning is referred to in company evaluation as PESTLE evaluation.
Political- Twitter has challenges related to regulation and censorship, especially in nations including China wherein political choices might obstruct its business operations (Twitter, Inc. PESTEL & Environment Analysis, 2023). Furthermore, the channel could have to spend more on compliance procedures as the demand for security and confidentiality of data becomes more widespread, which might increase operating costs. To overcome these obstacles, one must maintain a careful balance.
Economical- Economic downturns are problematic for Twitter since they frequently result in lower advertising expenditures. This in turn affect the channel's advertising revenue, which is a vital source of funding. Twitter needs to continue being flexible in adjusting its revenue tactics to shifting economic conditions if it wants to prosper.
Social- Given the wide range of demographics represented in Twitter's customer base, it is imperative to have a comprehensive grasp of changing user tastes and cultural developments in order to stay relevant (Buye, 2021). Additionally, the platform must deal with concerns like internet toxicity and disinformation while maintaining user engagement in the context of shifting cultural views on social media.
Technological- As cyber risks increase, Twitter must prioritize protecting user information and privacy. Additionally, by adopting AI developments, Twitter may boost consumer experiences, strengthen content moderation and increase ad targeting, all of which will strengthen its position as a leader in the ever-changing social media market.
Legal- Intellectual property rights, which include trademarks as well as patents might pose legal difficulties for Twitter and thus require a strict strategy to protect its ideas. In a legal environment that is always changing, Twitter's activities are also impacted by rules governing content moderation and striking equilibrium between free expression as well as responsible content regulations.
Environmental- Twitter must make steps to improve data center energy use and lower its carbon footprint in order to meet the demands of the environment and climate change. Furthermore, it is imperative that online inclusion efforts take into account the environmental effects of internet usage as well as online inclusion programs in order to render Twitter available to all people worldwide.
Porter 5 Force analysis
Porter identified five forces in the market: threat from new competitors, suppliers' and consumers' bargaining power, threat from new alternatives, and fierce rivalry. This structure gives strategists the information they require to come to strategic decisions and aids in their understanding of what renders a certain sector profitable.
Threat from new entrants- In addition to having a sizable user base, Twitter has a strong brand and a notable impact on networks (David, 2017). Its worldwide user network as well as platform characteristics present an important obstacle to entry for novel rivals.
Bargaining power of suppliers- Technology companies, data centers and content providers are Twitter's main suppliers. As a large participant in the market, Twitter can reach favorable terms and has significant negotiating power.
Bargaining power of buyers- Twitter's main customers are advertisers. This group might affect advertising conditions and prices, even if individual advertisers might not have much negotiating strength.
Threat of new substitutes- There are plenty of alternatives to social media, such as Instagram, Facebook as well as new platforms. The ease with which users might migrate to different sites presents a persistent risk to Twitter's user population and advertising income.
Competitive rivalry- Social media is a very competitive sector. Twitter faces competing against both up-and-coming platforms and industry heavyweights including Facebook, which provides comparable advertising solutions. It is difficult to stand out from the competition and keep consumers and marketers interested when there is fierce competition.
Opportunities
There are several prospects for Twitter's future development and improvement. One important approach is data monetization this makes use of its vast instantaneous information to provide organizations with data insights as well as analytics and maybe diversify income streams. The two benefits of using advanced powered by AI content moderation are reducing dependency on human moderators and enhancing user experience. Growth into unexplored regions in Asia as well as Africa presents significant opportunities for development via targeted localization as well as market penetration. Additionally, enhancing targeting capabilities and expanding the variety of advertising options, as well as cultivating content collaborations with authors, influencers and developers. This will improve the channel's allure and produce distinctive content experiences, promoting a lively and active Twitter ecosystem.
Threats
Twitter has several difficult obstacles that have a big influence on how it operates. Constant adaptation is necessary to avoid operating limits resulting from ongoing legislative changes regarding the privacy of information, content control and political impact. A significant risk of customer attrition is the fierce rivalry in the social networking space, particularly against established players including Facebook and up-and-coming platforms. Simultaneously, maintaining strong consumer engagement as well as material quality is a persistent problem, made worse by the ubiquity of trash and false information (Widodo, et. al, 2023). Security lapses pose a serious threat to user confidence and may have negative financial as well as legal repercussions. Lastly, a decrease in the funding for advertising due to economic uncertainties, especially during downturns may have an impact on Twitter's earnings. Company is required to tackle these complex issues if it hopes to remain viable and expand in the rapidly changing social media site.
Internal environmental analysis for identifying strengths and weaknesses: VRIO
Jay Barney introduced the VRIO model for business evaluation in 1991. It is a component of a company's overall strategy plan. The vision report is the first step in every company's fundamental strategy procedure, which also includes objectives, both inside and outside analysis, strategic decisions, and execution of strategy. The internal advantages and disadvantages of an organization are evaluated using the VRIO (value, rarity, imitability, and organization) framework.
Value:
Twitter has a number of important features and advantages. Its large and varied customer base, which actively participates in actual time discussions, is its primary selling point as a social media site. This customer base helps to build a thriving online community where actual time coverage of live events and breaking news are provided (Twitter Case VRIO Analysis, 2023). Furthermore, Twitter has an enormous data warehouse that is extremely beneficial for analytics, trend research and insights. This information repository is a significant asset in the world of social media since it can be used to generate revenue.
Rarity:
Twitter has a distinct set of advantages that are quite uncommon in the sector. One excellent illustration of rarity is the system's impact on networks. Company’s value grows as more people utilize it, producing a unique and difficult-to-replicate network impact. Due to its uniqueness, twitter stands out from other social networking sites and appeals to both users and marketers. Nevertheless, Twitter lacks unique material or functionality that may set it apart from rivals, which a noticeable rarity gap is given its important consumer base and impact on networks.
Imitability:
It is difficult for rivals to successfully replicate Twitter's competitive edge in terms of its capacity to stay inventive and tactically acquire businesses. Due to the company's promotion of innovation, elements including hash tags as well as trending topics have been developed. Its innovative culture strengthens its standing in the market (Miethlich, 2019). Additionally, Twitter has taken a calculated strategy of acquisitions, purchasing businesses including Vine as well as Periscope to expand its products and hold onto its distinct place in the marketplace for social media. Nonetheless, Twitter has difficulties in replicating efficient content moderation as well as security for user protocols, which are crucial in the fight against harassment and false data. The user experience and the quality of the material are affected by this imitation gap.
Organization:
The staff at Twitter is varied and talented, which adds to the channels' creativity and usefulness. The business's capacity to remain organized helps it preserve its competitive advantage and keep creating new services (Clegg, et. al, 2016). In addition, Twitter has become an authority for online advertising, offering a variety of advertising choices, such as "promoted tweets." The organization may compete successfully in the field of online advertising because of its organized advertising skills. However, the site continues to confront historical revenue issues. It remains difficult to translate user interaction into significant revenue, necessitating a more planned and efficient monetization strategy.
By summing up, utilizing the VRIO architecture, Twitter's internal investigation finds a mix of advantages and disadvantages. The site's achievement is largely due to its many important assets, which include a large and diversified user base, an extensive data warehouse and a powerful brand. Its edge over competitors is further strengthened by the impact of networks and an innovative culture. However, Twitter has several serious flaws, mostly related to problems with monetization as well as user experience. Its competition is exacerbated by content moderation's lack of original content and copycats. Twitter must fix these flaws while building on its advantages if it is to be competitive in the ever-changing networking landscape.
Identification of Competitive Strategies (Porter’s Generic Strategies)
A helpful framework for establishing competitive tactics that businesses might use to obtain a long-term competitive edge is Michael Porter's generic strategy model. Similar to numerous other businesses, Twitter may employ one or more of these tactics to strengthen its place in the field of social media.
Cost leadership
The goal of the cost leadership approach is to outperform competitors in terms of cost. Twitter continues to recognize methods to optimize its cost structure, even though its concentration on technologies and services could render this technique not as quickly practical. Twitter may concentrate on a few important areas to improve its financial results. Initially, cost may be decreased by optimizing its infrastructure (Porter's Generic Competitive Strategies, 2023). This entails effective administration of the data center, network optimization and maximizing server capacity utilization. Another tactic to reduce operating costs is to outsource non-essential duties like customer service. By improving the monetization and marketing approaches, additional efficiency may be achieved at a lower cost. Finally, looking into possible mergers or partnership opportunities might result in economies of scale, which in turn can lower manufacturing costs and increase profitability. Twitter may keep its edge over rivals and enhance its financial future by tackling these factors.
Differentiation
By concentrating on a few important areas, Twitter may successfully execute an approach to differentiation. Initially, it is essential to spend on distinctive characteristics and amenities that set it apart from rivals (Johnson, et.al, 2017). Improving its visual and audio features for live broadcasting and instantaneous content sharing, for instance, may draw customers seeking more participatory and captivating experiences. Curating content via special collaborations with famous people, influencers or news organizations may also yield unique and in-demand content. Twitter may differentiate itself by providing users with extensive customization choices to tailor their feeds as well as the entire experience. Additionally, Twitter may be positioned as a medium that prioritizes security for users and involvement by strengthening content filtering and lowering abuse. Twitter may effectively implement an approach to differentiation by exploring these channels, drawing in and keeping a varied user base that is looking for exceptional and premium experiences as well as content.
Focus
In order to implement a focused approach that works, Twitter might investigate several tactics that are centered around focusing on specific customer groups or niches. Curating content for niche markets and providing forums, unique characteristics, or groups of content that appeal to particular user groups' preferences is one strategy. Another option is the geographic emphasis, where Twitter could focus its attention on particular nations or areas, enabling the network to cater to local patterns and tastes, involving localized content and linguistic support. By tailoring experiences for distinct age groups, occupations, or various other factors, segmenting the population provides a chance to cater to particular user segments. Additionally, the creation of instruments and functions tailored to a certain industry is business, leisure, sports, or another can draw in niche consumers and marketers (Wanjogo and Muathe, 2022). In addition to drawing in more focused advertising possibilities, these focus-oriented tactics can assist Twitter in more effectively catering to the varied requirements and preferences of its customer base.
Hybrid strategies
Twitter has the ability to tactically blend components of general methods to produce hybrid ways that support its objectives. For example, it can take a cost-focus approach, focusing on cost-effectiveness while also serving specialized markets or certain user groups (Islami, 2020). This strategy might entail giving affordable choices or pricing tiers that are customized to meet the demands of specific user groups. As a substitute, Twitter may keep concentrating on particular user demographics and keep setting itself apart by offering unique characteristics and excellent content. Achieving cost leadership within the technology as well as infrastructure space while also distinguishing the channel with premium amenities and unique content would constitute another hybrid approach that would appeal to customers who are both quality- as well as price-conscious (Subhan, et. al, 2022). In order to maintain the site's relevance and engagement in certain locations, Twitter may also concentrate on differentiation and regional segmentation by offering unique characteristics as well as materials which are suited to those areas. Such hybrid approaches provide flexibility in meeting the varied user needs and corporate goals of Twitter.
Strategic directions & methods of expansion
A structure for determining growth plans by taking into account markets and goods is provided by the Ansoff Matrix. With the use of this matrix, Twitter may investigate several strategic options and growth strategies.
Market Penetration- By strategic methods, Twitter may strengthen its position in current markets and increase market penetration. Enhancing customer engagement is crucial and may be accomplished by making investments in aspects that add value to the system, such as enhancing content curation engines as well as lowering harassment as well as inaccurate data concerns. Additionally, it's critical to maximize revenue; Twitter may investigate more potent approaches to draw in and keep advertising (Market opportunity for Twitter using the Ansoff Matrix, 2023). Twitter may enhance its market position in the highly competitive social networking space by improving ad targeting and launching creative ad types. This makes advertising on the network more enticing. All of these actions taken together may assist Twitter in solidifying its position in current markets.
Product Development- Product Development initiatives that broaden Twitter's services can help the company stay competitive and meet changing customer needs. Adding novel characteristics including improved multimedia abilities, such as streaming live audio material, and AR experiences, is one way Twitter may innovate by broadening its offerings. Twitter is able to adapt to the changing requirements of its customer base as well as maintain their interest by offering a wide range of alternatives by expanding the scope of services it offers. Enhancing the consumer's experience may also be achieved by investing in machine learning and sophisticated algorithmic content curation. Twitter's standing in the realm of social media may be further cemented by delivering relevant and personalized material that is in line with the interests of consumers. This will increase the involvement of users.
Market Development- Twitter might look at expanding into unexplored regions in order to increase its appeal to customers. Twitter's localization of information, which adapts its website to suit local needs and tastes, is one crucial tactic. This means catering to cultural subtleties, tackling local languages, and boosting segments of content that are pertinent to certain regions in order to make the site more approachable and engaging to all types of users. It may also be quite helpful to establish alliances and relationships with regional news organizations, influencers, as well as content producers (B?BEANU, 2022). Cooperative marketing activities may result in the production of unique and superior content that is tailored to the interests of local audiences, augmenting the site's allure and maybe drawing in more customers.
Diversification- Twitter could expand its operations through two main channels in order to reduce risk and increase its reach. Initial data monetization gives the website a chance to profit from its vast data repository by offering data analytics as well as insights to companies. This diversity gives businesses important market information in addition to other revenue sources. Improving the user experience is also crucial (Cheng and et. al, 2022). To improve security for users as well as content control, Twitter must devote resources to improving user experience. Enhancements to the user interface, a decrease in harassment, and a more secure atmosphere are essential for drawing in new customers as well as keeping hold of current ones.
Market Development is the Ansoff Matrix strategy that Twitter has used. Mainly in Asia, Africa, South America, where it is not currently the leading social media platform. Twitter has the potential to grow into undiscovered geographical areas. Twitter can expand its worldwide reach and draw in new audiences by localizing its website, including backing of many languages, and recognizing local tastes and trends. Hence, by tapping or entering into new market organization would become able to enhance market share and thereby profitability as well.
Methods of expansion for Market Development
Conclusion
The report concludes that since its founding in 2006, the company Twitter has experienced remarkable achievement as a micro-blogging as well as social media service. It has gained international acclaim for providing a distinctive forum for people to interact with one another and express their opinions on trends and recent events. To preserve its competitive edge and guarantee long-term success, Twitter has to innovate as well as adjust to the rapidly changing digital world and growing competition. Twitter's extensive customer base and well-known brand worldwide are among its core assets, according to the company's major findings. In addition, it has unrealized potential for development in areas like regional expansion and service offering diversification via content collaborations. However, drawbacks include things like moderating content, user involvement, and intense industry competitiveness. The dynamic nature of social media and concerns about privacy of information represent significant risks to Twitter's future growth.
Recommendations
Improve User Experience- By making changes to its user interface, lessening abuse and false information and fostering a more secure as well as welcoming atmosphere. Twitter may concentrate on raising user happiness and involvement levels. Maintaining a happy user experience is crucial to drawing in new customers and keeping hold of current ones.
Broadband services- Twitter may stay ahead of the competition by offering a wider range of services, such as multimedia support, sophisticated content curation, as well as cutting-edge features. These services will meet changing user needs and guarantee that the site stays engaging and new.
Content partnerships- Working together with news organizations, influencers as well as content providers will improve the caliber of material on the site (Saarikko, 2020). Twitter may reach a larger audience and keep its reputation as a valued sharing of data tool by offering unique and excellent content.
Twitter's sustained growth is essential at a time when social media channels are crucial for forming public opinion as well as disseminating information. Twitter can traverse the next obstacles and preserve its position as an important competitor in the ever-changing social media landscape by putting these suggestions into practice and continuing to be dedicated to innovation and customer delight. The market must be intrigued by Twitter's innovative potential as well as future expansion, in addition to being kept wondering.
References
Books and Journals
- B?BEANU, S.A., 2022. The Revenue for the New Market using Innovative Business Model. Fostering Recovery through Metaverse Business Modelling, p.469.
- Buye, R., 2021. Critical examination of the PESTEL Analysis Model. Project: Action Research for Development.
- Cheng, C.C., Wei, C.C., Chu, T.J. and Lin, H.H., 2022. AI Predicted Product Portfolio for Profit Maximization. Applied Artificial Intelligence, 36(1), p.2083799.
- Clegg, S., Schweitzer, J., Whittle, A., and Pitelis, C. (2016). Strategy: Theory and Practice. 2nd Ed, London: Sage Publication Ltd.
- David, F., and David, F. (2017). Strategic Management, A Competitive Advantage Approach, Concept and Cases, 16th Ed, London: Pearson Education Ltd.
- Islami, X., Mustafa, N. and Topuzovska Latkovikj, M., 2020. Linking Porter’s generic strategies to firm performance. Future Business Journal, 6, pp.1-15.
- Johnson, G., Whittington, R., Scholes, K., Angwin, D., and Regnér, P. (2017). Exploring Strategy: Text & Cases, 11th Ed, London: Pearson Education Ltd.
- Lynch, R. (2021). Strategic Management. 9th Ed, Sage Publications: Thousand Oaks, California, United States: SAGE Publications Ltd.
- Miethlich, B. and Oldenburg, A.G., 2019. The employment of persons with disabilities as a strategic asset: A resource-based-view using the value-rarity-imitability-organization (VRIO) framework. Journal of Eastern Europe Research in Business and Economics, 1, pp.1-13.
- Saarikko, T., Westergren, U.H. and Blomquist, T., 2020. Digital transformation: Five recommendations for the digitally conscious firm. Business Horizons, 63(6), pp.825-839.
- Subhan, S., Elon, M., Ginting, S., Indradewa, R. and Hamdi, E., 2022. Implementation of QSPM and Porter’s Generic Strategy to Develop Mechanical Testing Laboratory in Indonesia. Budapest International Research and Critics Institute-Journal (BIRCI-Journal), 5(3).
- Wanjogo, J.W. and Muathe, S.M., 2022. Gaining competitive advantage through generic strategies in medical training colleges in Kenya. International Journal of Research in Business and Social Science (2147-4478), 11(2), pp.29-41.
- Widodo, A.K., Mahachandra, M., Widhiyaningrum, M. and Tahqiqi, R., 2023. Formulating a Strategic Management of Social E-Commerce through a Combination of SWOT and PESTLE Analysis: Case Study.
Online
- Market opportunity for Twitter using the Ansoff Matrix. 2023. [Online]. Available through: < https://www.ukessays.com/assignments/market-opportunity-for-twitter-using-the-ansoff-matrix-348-2021.php >
- Porter's Generic Competitive Strategies. 2023. [Online]. Available through: < https://www.ifm.eng.cam.ac.uk/research/dstools/porters-generic-competitive-strategies/ >
- Twitter Case VRIO Analysis. 2023. [Online]. Available through: < https://casemarathon.com/kelloggs/twitter/vrio-analysis.php >
- Twitter, Inc. PESTEL & Environment Analysis. 2023. [Online]. Available through: < http://fernfortuniversity.com/term-papers/pestel/nyse4/3998-twitter--inc-.php >
