Strategic Management Essay Example | Topics and Well Written Essays - 2250 words - 1

Strategic Management - Essay Example Instagram on the other hand also got the opportunity to add its name with a market leader. Facebook acquired Instagram also because they want to hedge the rising popularity of Pinterest, which was a competitor of Instagram (Instagram, 2013). Mark Zuckerburg, the CEO of Facebook considered their decision to acquire Instagram at an inflated price to be correct because they had the target to firstly acquire it before Google did so, and secondly they also stated that this acquisition would have been costlier in future, so the price that they paid was appropriate. This study would be evaluating different facet of such an acquisition, with special focus towards other rising players in photograph sharing segment. The objective of this report would be to analyse the strategic threats and opportunity that Facebook is facing, the framework that they have developed for growth and also assessing the decision of acquiring Instagram. ... However, the opportunities and threats that Facebook is facing or might face can be identified through evaluation of the strategies. Facebook has the opportunity to expand its operations to other international destinations and take the advantage of the popularity in order to introduce new features which will also generate good revenue for the company, such as web advertising, etc (Ansoff, 1987). With the help of technological know-how, and innovative culture, Facebook would be able to diversify and also look forward towards other dedicated segments such as photography sharing segment because now it has already acquired Instagram, web advertising segment, professional platform for job hunters, etc (Eldon, 2010.). However, the company also faces various threats that should be considered before taking strategic decisions. Firstly, the spending of Facebook are more than it is bringing in. Apart from this, Mark Zuckerburg as a CEO also does not have a good reputation, which might hinder s uccessful partnerships (Porter, 1985). Another threat is related to issues of privacy and safety of public information and photos online. The security infrastructure of Facebook is not up to the mark and in this scenario the acquisition of Instagram might be of unproductive for the company because if the privacy and security norms are not strong people will not upload photos. The company has also allowed the third party developers to assist them in their business functions, and also do not prove any button to alert cyber police if someone what to report unethical activity or spam content (Edwards, 2013). Instagram which Facebook acquired was valued to be around $20 million