1. PESTEL Analysis
1.1.1.Global leaders use of social media impacts the political landscape and is able to influence operations. (C-142)
1.1.2. Several high-profile world leaders utilize social media platforms to address their followers, the most notable being U.S. President Donald Trump who tweets regularly to announce global interactions with other political leaders. They also have high interactions and reach with the global community: U.S President Donald Trump had 30.13 million twitter followers as at May 2017 and former U.S. President Barack Obama had 103 million followers as at June 2018 (C-142)
1.1.3. Depending on the political climate in various countries, governments may censor content and access to social media platforms.
1.2.1. Generated revenues through advertising, data licensing and other products. products. In 2017, total revenue generated was $2,443, 299, 000 (C-142)
1.2.2. Fluctuating exchange rates and inflation rates can affect overall profit-margins. (C-147)
1.3.1. The expectation of the population is that they are able to post whatever they please on social media platforms. That explains why Twitter uses the bird mascot, which is a symbol of freedom (C-147)
1.3.2. The need to express feelings and experiences without a character constraint. The popularity of internet and social media devices has allowed social media companies to ensure that their platform is optimized for mobile devices. Encouraging real-time interactions. (C-141)
1.3.3. Global celebrities like Rihanna, Lady Gaga, Jimmy Fallon, and Taylor Swift use Twitter to communicate with their fans, build their public image and spread news (C-141)
1.4.1. In 2017, Twitter raised character counts to 280 from 140 in order to encourage freedom of expression and make it more comprehensive and relevant. (C-141)
1.4.2. Verification badge placed on accounts that are at risk of impersonification to indicate legitimacy. (C-141)
1.4.3. Social media platforms have implemented features such as broadcasting live videos, photo attachments to increase engagement. (C-141)
1.4.4. As internet access is becoming readily available, the use of social media is also growing especially in countries like India and Indonesia. It is estimated that India has 270 million Facebook users while Indonesia has 140 million (C-143)
1.5.1. Data centres require electricity and total energy use is increasing. (C-142)
1.5.2. In order to access social media, mobile phones and laptops are often used. These devices have their own carbon footprint.
1.6.1. Freedom of speech is suppressed in Jared Taylor case. Users believe that platforms like Twitter are a great way to express their views freely without any ramifications. Jared filed a lawsuit against Twitter and claimed that his account was suspended because of his racial views. Twitter’s policy of suspending accounts with or without reason raises issues of unethical behaviour. Users also believe it contradicts the platform that is supposedly focused on free speech. (C-147)
1.6.2. Data sharing partnerships and licensing generates revenue for social media companies. For instance, Facebook has data sharing partnership with four Chinese companies. Given this fact, Senator Mark Warner of the Intelligence Committee asked Twitter to disclose any data sharing agreements they have with Chinese companies (C-148)
1.6.3. Risks associated with impersonation, offensive, malicious posts/users. (C-141 & C-147)
Political: U.S. President Donald Trump has help boost Twitter popularity.
Economic: Twitter is a global brand. The blue bird alone communicate twitter worldwide.
Social: Twitter accounts that are at risk of impersonification have a verification badge.
Technological: Internet access is readily available in most parts of the world. So, the number of social media users will increase in future.
Legal: Senator Mark Warner has asked Twitter to disclose any data sharing partnership they have entered into with Chinese companies and the outcome of a lawsuit filed by Jared Taylor would have significant impact on Twitter.
2. Dominant Economic Features
2.1. Number of Rivals
Â· The social media industry is one that is interrelated and also has a lot of competition within the compact industry. It is an industry where the users tend to be on many platforms sending the same message at once. Twitter main rivals include Facebook, WhatsApp, Snapchat, LinkedIn, and Instagram. In 2018, Facebook average monthly users was 1.7 billion and only 17 percent of total users were from United States (C-144). In early 2018, WhatsApp active monthly users was 1.5 billion (C-145). In January, 2018, Snapchat had 300 million users of which 187 million were daily users (C-146). Instagram had 1 billion active monthly users as of June, 2018 (C-146). LinkedIn total users was 562 million as of July 2018 (C-147). The total actively monthly users would equal more than half of the worlds population if considered all different individuals, which would be false to assume, therefore it is an industry where individuals choose to use a variety of the platforms with in the same social media industry
Â· The Industry itself is growing as more and more people have access to the internet and are able to use the free services. Twitter had increased 23 million active monthly users, Facebook 461 million, and Instagram 400 million (C-138). Of that majority of revenue growth seen in the industry comes from international revenue. With that being said the growth is being seen from acquiring new users as the new users now have the ability to access the internet thus to access social media services
Â· The industry has become such that the only way to have an upper hand over its competitors is to acquire one another. In this case, Facebook that already has the highest monthly users, now owns WhatsApp, and Instagram (C-144, C-146)
2.2. Channels of Distribution of Content
Â· The industry is one that allows people to communicate with family friends and also to the public. One statement on either platform is able to be seen by thousands of millions of users (C147). The users have the ability to find content that associates with them without restriction (C-141). The users are able to customize their usage of social media that relates to them. This also allows entities to target those users by providing those individuals with content that is relatable and consistent with them.
Â· There are many influencers and public figures that use such social media platforms. Those included are presidents of countries and other highly known celebrities C-141. This allows to those individuals to get their message across such a large audience with a single click of the button. News outlets are now also becoming a key feature in interacting with the audiences.
Â· Social media allows users to have access to all their needs at a single stop, to view their personal social circles, to access the news, and more. Now instead of turning on the TV for the latest news on what had transpired within their neighborhood, now are able to follow their local police department and view and interact with them
2.3. Economics to Free Services
Â· The industry is one where users are able to use the services for free at no cost. In return, the companies collect data on how users interact and sell such data. The data is used by companies for many purposes on ways that individuals interact. The majority of revenues for these companies come from the sale of data and advertisement (C-142). The revenue landscape is also growing directly with the ability of users to gain access to the internet, especially in developing countries. This can be seen as the revenue stream is increasing year over year from countries other than North America (C-147).
Â· The industry is expanding with multiple companies going public to seek investors. Facebook and Twitter are both public entities and trade on the stock market C-143. This allows companies to access additional capital to further expand their businesses and investors gain a return for such investments.
3. Porter’s 5 Forces
3.1. Threat of Substitutes
3.1.1. Relative price and performance substitutes
Â· Twitter does not have restrictions on whom the user could follow and this enhances the \breadth and depth\” of the content they have access to.
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