Founded in 2004 by Mark Zuckerberg, the publicly traded company Facebook is a social media platform for networking and connecting with others. With over 2.23-billion active monthly users as of June 2018 (Facebook, 2018), Facebook has established itself as the main competitor and leader in the media industry.
Facebook’s vision statement “people use Facebook to stay connected with friends and family, to discover what’s going on in the world, and to share and express what matters to them” (Smithson, 2018), represents how Facebook goes beyond the average social media platform, to allow knowledge acquisition of the world and people around us when we connect with each other. This statement is reflected through Facebook’s key features including messenger that facilitates communication between individuals to stay connected, and newsfeed where users can remain updated on current news and post any thoughts. This leads to Facebook becoming a global tool for discovery and self-expression.
Facebook’s mission is to “give people the power to build community and bring the world closer together” (Facebook, 2018). Although the company plays a vital role in connecting the world as there’s 1.47-billion daily active users on average for June 2018 (Facebook, 2018), there has been conflicts regarding its mission following the Cambridge Analytica scandal this year. It involved a date leakage for 87-million Facebook users in an attempt to influence voter opinion on behalf of politicians who hire them (Rosenberg & Dance, 2018). This contradicts with its mission as a more connected world is seemingly a better world however, the scandal provided a new perspective where a connected world makes it easier for data and security breaches. However, Facebook’s mission encompasses more than that as it focuses on developing the social infrastructure to allow the formation of meaningful communities (Zuckerberg, 2017). In November 2017, Facebook announced a new social good forum ‘Mentorship’ (Facebook, 2017) which aims to connect those requiring assistance in achieving goals with those who have experience and knowledge in that area. In August 2018, Facebook further implemented ‘Mentorship’ into Facebook groups (Facebook, 2018) to make connecting with others more efficient by allowing members in existing communities to get support from existing members. This compliments Facebook’s mission as it encourages meaningful interaction between people and hence allow like-minded citizens to collaborate cohesively.
Facebook revolves around five core values (Facebook, 2015). This is supported through the company adopting a hacker culture that focuses on innovation and continuously striving for improvement (Facebook Inc., 2012). This culture is implemented through a hackathon every few months where staff work in small team and develop prototypes for new ideas they have (Keyani, 2012). This satisfies the values of being bold and moving fast as it demonstrates creative problem solving and rapid decision making that allows Facebook to take risks to grasp opportunities to build inventive products. The company also has systems to improve information distribution necessary to solving problems such as adopting a flat management system, and openness in terms of minimising restrictions on employee’s activities through flexibility and allowing them to solve the problems they care about the most (Lombardo, 2018). This compliments the values of being open, focusing on impact and building social value as it keeps everyone informed and empowers workers to focus on the problems that they think are most important.
The resource based view holds that resources that are valuable, rare, imperfectly imitable and non-substitutable will lead to a sustainable competitive advantage (Klein, 2008). With many competitors including Instagram, Snapchat, LinkedIn and Twitter, it is essential for Facebook to establish a competitive edge to remain a leader in the market. Ranking first in ‘Best Places to Work 2018’ (Glassdoor, 2018) and employing 30,275 people as of June 30 2018 (Facebook, 2018), Facebook’s organisational culture is of utmost value. Facebook’s hacker culture promotes innovation and creativeness as it focuses on better ideas rather than who lobbies for an idea better. Supporting innovation may allow firms to gain higher profits (Barney, 1995, cited in Genc, 2013), by differentiating products for the market needs and demands. Therefore, it is valuable as it contributes to its success through boosting productivity by providing a unification of beliefs and values as well as profitability through addressing competition against other platforms.
Socially complex resources like culture, are irreplaceable due to being intangible resources and thus tend to possess the characteristics of being rare (Barney, 1986; Hamal ; Prahalad, 1990, cited in Klein, 2008). Facebook, Microsoft and Apple are the main drivers of hacker culture (Press, 2017) however, no other social media platform implements it in its workplace and hence, it is rare as only a few competitors possess the characteristics of the organisation culture.
Part of Facebook’s hacker culture is the Hacker Cup, an international programming competition hosted by Facebook to recruit potential employees (Facebook, 2011) and as mentioned previously, the Hackathon. These characteristics are what makes the culture unique to the company as practices that are implemented as a way of responding to situations creates an imperfectly inimitable resource (Genc, 2013). However, it is argued that culture and strategy are interchangeable as strategies trigger cultural changes to compliment the renewed perspective and objectives (Ahmadi, et al., 1994). For instance, changing from cost to differentiation strategies will automatically cause a cultural shift from encouraging market research on efficient operations to focusing on innovation and disrupting the industry. Hence, Big Data is substitutable as it can be replaced by another equivalent valuable resource.
Facebook has positioned itself as data-first operations that’s built entirely around data collection, analysis and redistribution (Marr, 2016). Except Google, no other firm has so much data collected on user preferences, needs and behaviour which is all done through a resource called Big Data. Hence, Big Data is valuable since it provides Facebook a competitive edge through allowing Facebook to know what exactly to offer to its users and how to further improve their experience with the social media platform. Additionally, advertisements are Facebook’s main source of profit, represented by it making up 99% of Facebook’s 2018 total revenue (Facebook, 2018). Hence, Big Data is valuable as it gathers “profile and activity data… in order to deliver targeted advertisements” according to Ken Rudin, Facebook’s analytics chief (Kanaracus, 2013, pg.1) which will help strengthen revenue growth.
In the digital age, individuals leave traces of their needs and preferences online and through large shifts in supply infrastructure, the tools used to gather Big Data are easily accessible (Greenstein et al., 2013, cited in Lambrecht & Tucker, 2015, pg. 6). Cloud computing for instance has enabled firms to access Big Data without investing in massive on-site storage and data processing centres (Marr, 2016). This is represented by the fact that more than 75% of companies have invested, or are planning to in the next two years, in Big Data (Stamford, 2015). Thus, Big Data would not be considered rare as it fails the criteria of only being a few other firms possessing it.
For Big Data to be inimitable no other ?rm should easily be able to access the advantage without reaping high costs. However, Big Data has a minimal marginal cost of production and distribution so it is inexpensive to attain the resource and since it’s non-rivalrous, use of the resource does not hinder its availability (Shapiro ; Varian, 1999, cited in Lambrecht ; Tucker, 2016, pg. 5). This causes it to be resold and allow new entrants to gain commercial insights similar to those available to firms that use Big Data.
Big Data is also substitutable as there have been examples where firms have attracted more customers due to superior value propositions rather than Big Data. Snapchat for instance managed to establish itself as one of Facebook’s biggest competitors in the industry due to meeting user demands with its user-friendly interface that allows them to create and share personal content more privately, with no access to Big Data (Lambrecht & Tucker, 2016).
This represents that although Facebook excels in obtaining resources that are valuable and rare, it falls in it being imitable and non-substitutable. Hence, Facebook needs to improve in those areas in order to gain a sustainable competitive advantage.
Recently, there has been an increase in awareness of sustainability challenges and businesses are thought to be the main contributor due to being focused on profit maximisation (PM) that is, engaging in activities for financial gains potentially at the expense of society (Porter & Kramer, 2011). However, Facebook’s orientation towards society is creating shared value (CSV) through targeting social issues linked to profitability that will positively impact society and growth.
Facebook’s CEO, Mark Zuckerberg, states that “Facebook…was built to accomplish a social mission — to make the world more open and connected” (Facebook Inc., 2012, pg.67). Facebook does this through the launch of Internet.org that aims to bring internet access and communication to those 4.5-billion unconnected people (Facebook, 2018). Through removing the technological barriers to internet access, it creates shared value as it focuses on the social problem of connectivity and relationship breakdowns within society and aims to give people a voice. This in turn improves the firm’s competitiveness as this is also a market development opportunity as in order to remain connected, individuals would require social media platforms including Facebook which would drive profit and growth.
Facebook’s carbon footprint of 718,000-tons of carbon dioxide as of 2016 is driven by the data centres contributing 72% of total emissions (Facebook, 2018). Hence, Facebook announced its aim of reducing its greenhouse gas emissions by 75% to commit to powering operations with 100% renewable energy by 2020 (Facebook, 2018). Since its Prineville data centre contributes 95% to the firm’s total carbon emissions (Facebook, 2018), Facebook has collaborated with Pacific Power to bring 437MW of solar energy to power its operations which caused Facebook to be the record-tipping renewable energy deals in 2018 (Steel, 2018). This is the result of a new green tariff structure that enables Facebook to buy energy associated with renewable projects which will decrease electricity costs for the 1.8-million PacifiCorp customers (Chaney, 2018). This societal issue ties in with profit as through targeting these environmental issues, it can improve Facebook’s brand name reputation and consequently improve competitiveness and raise total profits. This reiterates how Facebook focuses more on CSV than PM as it reduces the company’s impact on global warming as well as make renewable energy more accessible for others whilst boosting profits.