Potter’s five forces model to analyze the position of the Twitter Company
Question 1
Twitter is one of the top-ten most popular websites in the world today. This paper will use Potter’s five forces model to analyze the position of the U.S. Company. First, during the last decade, the social media industry has experienced high competition. However, the industry is continuously undergoing technical advancements and the addition of new features. In effect, many of the relatively small companies face intense pressure to enter the industry. Second, the threat of new entrants is low. Existing players in the industry, such as Twitter, have made their brand more attractive by maintaining a vibrant image. Third, the bargaining power of suppliers in the social media industry is high at the moment. The number of suppliers of technical support Twitter uses, such as IBM, is limited. Therefore, it narrows the choices Twitter has regarding suppliers. Fourth, the buyers, specifically the use of the platform, have high bargaining power. In effect, Twitter is in no position to raise the revenues gained from advertisements. Lastly, there is a high threat of substitutes in the industry, such as Google+, Facebook, and Instagram. The fact that Twitter limits the number of characters in a particular post, unlike its rivals, makes the threat of being replaceable very high.
Question 2
Twitter could take several steps to enhance its resources or capabilities based on the resource-based view previously discussed. First, the social media platform could utilize its strong brand portfolio to expand into new brand categories in the advertising market. Additionally, the company has the option of using its strong distribution network to help increase its potential to teach a broad audience of the target market. The organization could use its influential dealership culture to market its products and services. Additionally, the firm can utilize the power of its sales network to help explain to the customers how to extract maximum possible use of the social media platform. Finally, the firm could exploit its successful track record of integrating complimentary firms through mergers and acquisitions. For example, the organization could aim to build a successful supply chain by merging several technology firms, just as it has done in the past. Overall, Twitter has several opportunities at present to improve its resources.
Question 3
Business-level strategy focusses on a firm’s position in the industry. Primarily, a business-level plan provides a list of actions an organization undertakes to offer its customers value for their money through exploiting the core competencies of the company in specific, individual product or service markets. Therefore, a business-level strategy mainly focuses on the internal strengths of a firm against what is needed in the market.
To attain cost leadership, an integral component of the generic business strategies, the CEO of twitter could choose to build a state of the art efficient facilities which make it costly for competitors to imitate. Also, the CEO could aim to reconfigure the value chain as needed. Second, the company leader could help achieve differentiation in several ways. Twitter could seek to improve the buyer experience by offering them a higher level of enjoyment. For example, increasing the number of characters the user may upload is a way of improving the buyer experience. Additionally, the social media giant could reduce buyers’ costs by focusing on quick response to problems. Third, Twitter could use a focused low cost approach by choosing to sell to a specific segment of the market. Lastly, the company could also consider only serving interests of the selected market segment as a means of achieving focused differentiation.
Question 4
Corporate level strategies are about targets a company needs to achieve in order to reach certain business goals. The definition includes the plan a business adopts to try and reach its business goals. The strategies need to be long-term in nature, although there is particular need to be flexible to allow for dynamic adjustments. As such, the plan a business implements needs to cushion it from the uncertainty caused by market conditions.