Case 3: A Strategy for Facebook
Overview:
Facebook (FB) has been rattled by bad news and poor decisions. Its market capitalization has alternately shrunk and risen while and its image has slumped. Despite its astounding profitability, the company shows massive weaknesses in management capability. While it grows and makes money, it lacks clear goals and direction. All across the country, MBA students want to delve into Facebooks problems and propose solutions.
Your Task:
The goal is to devise a clear strategy for Facebook. Strategic concepts are needed, not marketing plans. SWOT analysis stinks! It uses superficial opinions and never provides a clear roadmap. We need to know what to do in each of the next three years and we need to know why. As a serious MBA candidate, you need to create a credible plan. Since this is the third case in the course, you should be able to apply concepts from class discussion and from previous cases. Facebook should know:
Where is the revenue going to come from?
What issues do we have to resolve?
How much will that cost?
Who are our competitors?
The elements of a clear plan.
Plan of Attack:
Read the case five times to understand your role.
Go to the Wall Street Journal and other credible business sources to learn about Facebook.
Find out its strategic direction if any. Learn the problems it faces. Look for proposed solutions.
Do not use blogs or opinions. Get the facts.
Develop sound ideas for a detailed plan.
Apply concepts from the course: Driving Force, real capabilities of the firm
Make a year-by-year plan with goals and milestones. For example, in year 1, the company will achieve xxxxxxx. (Be specific.)
Do not tell Facebook to develop a plan. That is your job! And use common sense. Do not tell them they are stupid. Provide a good plan without criticizing their mistakes.
Requirements for the Assignment:
n Write a carefully thought out paper of at least five pages defending the option you choose.
n Spend adequate time explaining why the other alternatives have merit but are not as strong as your choice
n Think about and address likely arguments you will receive. For example, to borrow money, the company will need assets. It is also difficult to borrow money while sales are declining. Also, an expensive Marketing Plan would have to be tied to an aggressive sales effort. If employees leave the company or do not get bonuses and pay increases, this may be difficult.
n Do not write a paper saying that you cannot choose a direction. Management looks at you as someone who has learned about corporate strategy and grappled with business problems.
n Use all of the street smarts at your disposal. If you insult one of the top managers, you may get fired. You will also put your boss in a bad spot. The other senior managers will blame him or her for selecting you for the task.
