Porters 5 Forces Model on Facebook: Core Competency of Facebook

Core competency refers to a specific set of skills and expertise that a company may have over its competitors. One of the most essential aspects of a core competency is that they help gain access to a range of markets and consumers. On a personal perspective, I think facebook really understands how and why people connect. Using this knowledge they were able to build a platform where people kept pulling in friends and family keeping the social network growing and we witness that every day. More and more people are joining facebook, including your co-worker, parents also distant relatives whom you’d like to avoid seeing you pictures! This is where privacy comes in, along with all the reasons we use facebook on a regular basis. Every time we search online for the best restaurant deal, share good news or bad with our Facebook friends, or tweet to our followers, our "audience" is bigger than we know.

In an article in the Forbes Magazine, the Trefis Team concluded that “Facebook almost doubled its stock price from the IPO level of $38 per share. The market values the company at more than $200 billion, with a P/E ratio of around 70. Its top-line has risen by over 60% during the last nine months, and this impressive growth is expected to continue in the future.” One of facebook’s accomplishments include beating Google as the most visited site in USA in 2010 from where experts started predicting that greater things lay ahead of Facebook.

In addition to its core platform, Facebook also has other platforms including Messenger, Instagram, WhatsApp and Search, each of which have the potential to become multi-billion dollar businesses. In many respects, the company has not even begun scratching the surface of this opportunity. With new features adding, facebook has kept updated to our needs even sometimes when we don’t realize it. Every time facebook updates something new, it might take a while to get used to it but once we do, it’s the best thing ever! Some reasons why we absolutely love “timeline”. Although the acquisition of WhatsApp for 19 Billion USD is of some debate, for me it’s an addition to the facebook family which has higher potential of growing together.

Also on the other hand, Social networks and other communication platforms have a fickle history – once prominent platforms like MySpace, Friendster, Hotmail, MSN Messenger and Hi5 have over time lost most of their active users. The social networking market is highly competitive and is prone to rapid. Facebook needs to continuously innovative and adapt to changing user trends to keep the engagement levels stable on the platform. The low barriers to entry in the Internet business further intensifies the competition in this market. Moreover, Internet usage is increasingly shifting to mobile devices, where the landscape is quickly evolving.