Social Media Industry Evolution Analysis

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Presentation assessing the competitive environment in which the social media industry participants compete. Includes historical evolution of the industry and the key issues facing participants in the industry now. Also illustrated are the changes in the environment, competitors, customers, and suppliers that have impacted the strategy, business model, and profitability of the industry players.

Transcript of Social Media Industry Evolution Analysis


2. INDUSTRY HISTORY Before 1995 Discovery of 6 Degrees of Separation Bulletin Board System1995-2003 Demise of Bulletin Board System World Wide Web America Online (AOL) 2003-Present Social Media Giants Gaining revenue from users 3. BIG THREE Facebook ~1 billion active users $5 billion revenue in 2012 Business model: incremental revenues, ads Twitter 500 million active users $9 billion estimated value Business model: sponsored tweets Google+ 343 million active users $40 billion revenue in 2012 Business model: highly personalized ads 4. COMPETITIVE LANDSCAPE: 5 forces Threat of New EntrantsBuyerIntra- SupplierBargaining IndustryBargainingPower RivalryPowerThreat of Substitutes 5. COMPETITIVE LANDSCAPE: 5 forces Bargaining power of consumers Brand equity Many substitutes available Low/moderate switching costs - HIGH - 6. COMPETITIVE LANDSCAPE: 5 forces Threat of new entrants Saturated market Moderate customer loyalty Low initial investment costs Difficult user accumulation and retention - MODERATE - 7. COMPETITIVE LANDSCAPE: 5 forces Bargaining power of suppliers High availability of hardware & storage providers Equal supplier concentration to firm concentration ratio Minimal supplier differentiation - LOW - 8. COMPETITIVE LANDSCAPE: 5 forces Threat of substitute products Large number of substitutes Decreasing perception of differentiation Brand reputation. - HIGH - 9. COMPETITIVE LANDSCAPE: 5 forces THREAT OF industry RIVALRY Many substitutes available Constant need for innovation and differentiation- HIGH - 10. INDUSTRY trends Growth of Mobile Devices Shift in Marketing Strategies Increase of Online Presence and Activity 11. INDUSTRY CHALLENGESData PrivacyMonetization of Mobile ContentInternational CensorshipMeasurement of ROI and ValueDistribution of Profit 12. INDUSTRY CHANGESRevenue Gain StrategiesConnecting Businesses with ConsumersTransition from Private to Public 13. IMPACT ON STRATEGY | BUSINESS MODEL | PROFITABILITYImpact on Industry Strategy, Business Model & ProfitabilityMobile Device Growth Opportunities for mobile monetization More businesses using Facebook ads and greater data volume TrendsMarketing Strategies Shift from users Profitability More mobilephone appsOnline Presence & Activity More advertisements Growth Data Privacy Mobile Monetization Bad reputation for lack of data privacy-decrease of users Challenges Difficulty monetizing mobile Profitability International Censorship Difficulty expanding overseas (China) Profitability The top social networks will continue to grow but struggleROI & Value Measurementwith competing with each other because they are hard to compareProfit Distribution Revenue Gain Strategies Opportunities for revenue from users (in addition to businesses) ChangesConnecting Businesses with Seamless ad integration increased buyer intent Consumers Profitability Difficulty meeting shareholder and Wall Street demands Transition from Private to Public 14. FACEBOOK FUTURE STRATEGIES Mobile Ad Revenue #1 popular app in US but underwhelming mobile ad revenues Large amount of mobile apps Job Search & Recruitment Market Social Jobs Graph Search Online Dating Graph Search 15. twitter FUTURE STRATEGIESBreaking intoE-Commerce Partnershipwith AMEX International Expansion into Brazil 16. Google+ FUTURE STRATEGIES Advertising Revenue Sync Google+ with all Google-relatedServices Community Focus Google Hangout 17. ADDITIONAL QUESTIONS