Facebook

Facebook

Strategic capability of Facebook

Introduction:

Facebook was created in the dorm rooms of Harvard University by a computer geek known as Mark Zukerberg in 2004. The sudden success of Facebook was not an outcome of pure luck but a result of strategic decision making, persistency and handwork by few Harvard students. Their combined vision enabled them to see beyond the sky, and revolutionized human relationship in a virtual environment once and for all (Kirkpatrick, 2010, pp 4-6).

The idea of Facebook was not novel; in fact there were various sites which were offering the similar services (friendster, MySpace etc). However, what gives Facebook a comparative edge over its competitors was its effective strategic decisions making capability, and its sheer persistency to stand by its decisions till the very end. Although, students who conceived the idea of Facebook never had a real business experience, but they had the clear vision and the aptitude to anticipate market demand and innovate products in accordance with prevailing consumer trends (Kirkpatrick, 2010, pp 8-12).

The Comparative advantage of Facebook in the early years

At the time of its inception, Facebook faced aggressive competition from its competitors that had the early arrival advantage, adequate digital experience and unlimited resources at their disposal (MySpace was owned by News Corp). However, all of these players lacked the ability to foresee transforming market environment, and their failure to mold their strategies in accordance with the changing consumer needs (Kirkpatrick, 2010, pp 12-18).

For instance, the first strategic decision taken by Facebook at the time of its launch was to restrict it to the students at Harvard. In other words, only students from latter University had the right to become members of this upcoming online social club. Unlike MySpace and Friendster, which were open for everyone, Facebook was selective in its approach. The exclusive and discriminatory right of admission offered by the Facebook made it a mid night success. Teenagers all across United States were curious and wanted to know why Facebook is acting as an exclusive club for certain university, and hence waited anxiously to hop in the weagon (Kirkpatrick, 2010, pp 21-26).

This strategy of being selective in their approach helped the startup to increase its public awareness through word of mouth, saved their marketing cost, and made its social network seems “cool” in the eyes of its target market. Teenagers back then thought of it as some kind of elitist club started at Harvard and wanted to join it at any cost. The initial restriction (which was in actuality the result of lack of funds to acquire enough servers to support online traffic) made the company a new trend to be followed by the university going class in United States (Kirkpatrick, 2010, pp 21-26).

Another strategic decision that Zukerberg has under taken was to discourage advertising on his site. Although, at first this decision was taken with heavy hearts even from his executives, but in the longer run it was able to create a positive impression about Facebook in the eyes of its ...