Nicholas Carr - Reflection Assignment

Nicholas Carr - Reflection Assignment

Competitive Advantages of Facebook

“When a resource becomes essential to competition but inconsequential to strategy, the risks it creates become more important than the advantages it provides.” (N.G. Carr., 2004)

In my opinion, there are a lot of reasons for which Facebook may claim to possess a competitive advantage. Facebook is amazingly habit-forming for its users as well as for its advertisers. It has entrenched applications and services in order to optimize the performance of advertisements and also to trigger the targeted audiences in the best possible way. Hence advertising through Facebook has become more effective with time and if advertisement is done somewhere else, switching costs are created. Users and advertisers both have gotten so used to of the features and services of Facebook that now they would surely not want to relearn to use some other social offering almost the same features. Facebook blocks out its competitors by providing all the content online, which has not yet been achieved by any other distribution or social network (Watkins, M. & Devery, J., 2009).

The greatest strength of Facebook is possibly its outstanding ability to provide the “Network effect”. The number of Facebook users; the ones who find friends, post updates, upload content and like content on Facebook; has reached to 900 million worldwide. According to the rule of great numbers, we may be reminded of the fact that ultimately this increasing growth will slow down, however for now, the network effect of Facebook is active and is going well. This imparts yet another competitive advantage for Facebook; and that is “Word-of-Mouth” type of advertising. Facebook does not have to make any significant efforts for attracting new users since it has a legion of advertisers and users who promote it quite well; a fact that persists on reinforcing its network. Finally, the advertisers who promote their products and services through Facebook are continuously paying a positive feedback to it. The Facebook Marketing page, that directs the new businesses the ways to open up accounts, has been recently reported to have reached to 1.5 million “likes and also is full of stories of success from the ones swanking on it.

Although it is not quite impossible to create a competing online social network such as Facebook, however, at this phase it really seems to be impossible to beat or even tone with the user base and the customer experience of Facebook. Facebook has incorporated such features that users have gotten habituated with such as sharing videos and pictures, tagging friends in them, updating statuses, etc. Hence, I assume that even if a rival company goes to offer the matched services and features, it would not be easy to influence the users to switch from Facebook. All these competitive advantages enjoyed by Facebook, are quite enough to ensure its sustainability for now and for future times as well when other advancements in the field of social networking are likely to happen.

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