What business is Twitter in?
Twitter’s money making model has been a pretty simple business to understand as it generates a platform for people to virtually hang out and share photos and pithy experiences on what the company is going through at the very moment. Secondly, Twitter posts advertising on the side of that information shared.
It will not be a miss to say that Twitter is the SMS of internet. It allows a single text message communication of 140 characters in length at most. However, later in its business stage, Twitter evolved itself in the business of news, information, travel and social networking (United States Security and Exchange Commission, 2013).
However, with the passage of time, Twitter’s has evolved its business to new levels where it strives to create and provide value to both its users and advertisers. Moreover, Twitter has followed itself in the creative business which promotes greater challenges for the business. The Twitter business is not easy to pull off as it has to maintain a balancing number of competing interests on its website where users can have fruitful and informative debates.
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How would you describe Twitter's business model?
Twitter has become one of the greatest Internet success stories of this time. It’s a huge and very popular brand. The business model of the company can be defined as a service provider that insists on participation, shares the culture of freedom and lack of inclination towards profit that symbolizes the Internet.
However, in 2010, Twitter declared its plan to include advertising on its website. Advertising on the website is the biggest source of revenue for the micro blog social media network. Though many users thoughts that such advertisements will pollute the discussions on the forum. Therefore, Twitter tries to make maximum money through advertisements will making sure that Twitter users are not affected with it (Harbor, 2011).
This business model adopted by Twitter, which is formed on advertising can only work if Twitter’s management team start to introduce commercial information of the over period of time. For this, they need to heed to its users. User feedback and complaints should be a source for quick and successful changes about bringing innovation in its business model. Furthermore, Twitter should not depend exclusively on the single business model in this rapidly changing business environment where technology is renewed before the previous technology goes global.
How would you assess Twitter's management team?
Twitter’s micro blogging network is renowned for its management team from top to bottom. It has a very senior highly skilled and experienced executive management team. Recently, Twitter has undergone several different updates regarding its management team. The purpose of these updates and strategies is mainly to target to improve the overall look and appeal of Twitter network (Harbor, 2011). Also, it will not be wrong to categorize the Twitter management team as a creative and versatile group of team workers. For instance, its creative team made significant to its Tweetdeck application. Moreover, a very popular feature was added to Twitter in which the user could revisit their past tweets from old time. This feature was highly appreciated by the users. This shows the skill, dexterity and in-depth consumer insight of the management team of Twitter.
On the other hand, the business and marketing management teams have been working hard on developing and updating their search. The search is mainly focused to manage various Twitter feature (Smith, 2009). Moreover, management teams have also concentrated on updating the list of certified products provided by Twitter. This helps the marketing team to closely analyze and find ways to engage customer attention.
How would you describe Twitter's major strengths, weaknesses, opportunities, and threats?
The strengths, weaknesses, opportunities and threats of Twitter can be summarized as below:
As compared to other business in the field of social media network, the real time search function makes Twitter unique and stands it out from its competitors. For instance, if a major incident happens in the world, the user will first visit the Twitter’s search function to know the latest happenings (Stone, Twitter, the Startup That Wouldn't Die, 2013). Also, it has around 500 million users registered around. It is among the most visited websites every day.
The organization of tweets related to any company, brand or story is not very user friendly. This makes the communication between different users regarding a certain difficult and boring. Secondly, spamming is one of the major problems faced by Twitter users frequently.
Opportunities and Threats
One of the big plus of using Twitter is that it allows its users to be anonymous, and people on online social media prefer to be anonymous. On the other hand, it will not be wrong to suggest that Twitter is the lighter version of Facebook (Schonfeld, 2009). This means that Twitter management team has a great opportunity to follow the footsteps of Facebook and become a strong competitor in the social media network business.
As far as threats are concerned, Twitter must prepare to protect itself from the Chinese version of Twitter, Weibo, in case it is released outside China. Moreover, other companies like Instagram has stopped Twitter users to tweets their photos from Instagram. Therefore, it is very likely that other companies may follow the same in the near future (Brustein, 2013).
How would you describe Twitter's core competencies?
The core competencies of Twitter revolve around its new marketing campaign to fancy new and current users. For instance, the one of the main targets to be achieved by Twitter is to educate its users about the services that are provided by Twitter. Therefore, it can be established that features and services are one of the core competencies of Twitter (Stone, Twitter, the Startup That Wouldn't Die, 2013). For instance, organizing the favorite tweets for a user, setting the tweet priority and getting notifications regarding the relevant tweets on the interested topics of user.
In addition to that, Twitter also relies heavily on the technology, and it is one of the reasons of its huge success. For instance, Twitter is constantly thriving to widen the attraction of micro bloggers to its web site by depicting that users can track everything from sporting events, natural disasters, and traffic sites to any event taking place in the world (Schonfeld, 2009). For this, Twitter is adding more and more user friendly and tech-savvy tools to its users to fully understand and avail the services provided by the company. Therefore, Twitter must have to take its services to another level in order to keep its competitive advantage.
Analyze Twitter's financial statements. What does Twitter plan to do with the funds raised in the IPO?
Last year, Twitter reported a loss of 80 million dollars and analysts predict that it will keep on losing money. During 2013, Twitter lost another 133.9 million dollars. Therefore, it has become difficult to grasp that a company losing more than 100 million dollars a year is valued at worth of 10 billion dollars. As compared to its competitors such as Facebook, Apple and Microsoft, all these giants were making profits when they launched their initial public offering (Harbor, 2011). Moreover, Twitter reported a net income growth of 38.12% last year when its sales revenue was around 317 million dollars for the same year. However, its earnings per share have decreased around 0.18 from last year. Currently, Twitter is valued at 2.1 billion dollars for its IPO (Brustein, 2013).
Twitter plans to expand its business with the funds raised from IPO. It will invest heavily to cater to the needs of its visitors and users and add value to its business (Neal, 2013). Moreover, Twitter has planned to acquire various tech based business that will help in adding user proposition to its business so that it can compete with the rival companies in the social media business.
Carefully analyze Twitter's business strategy. Do you see problems ahead? How might the strategy be modified to better leverage the company's core competencies and/or take advantage of market opportunities?
Twitter’s main business strategy over the recent times involved making an echo system. This echo system is one of the unique and complex ideas of its times as it interconnects several different entities. All of such entities work together to help Twitter become more successful, powerful and profitable for different stakeholders involved (Stone, The Twitter IPO: The Accidental Revolution Hurtles Toward Payday, 2013).
Currently, Twitter is focusing its business strategy towards two ideas. Firstly, to increase the overall user base to compete with social media giant, Facebook, which has around 800+ million users. Secondly, its strategy revolves around providing a unique opportunity for the advertisers on its platform (Brustein, 2013). To be more specific, Twitter is focusing to help its advertisers to target the audience based on their age, gender, geographical locations and interests.
However, under these business strategies, Twitter is faced with strong competition from Facebook, Google + and Chinese version of Twitter. This being said Twitter is not as responsive as its competitors. For instance, Twitter lacked the feature of distinguishing work circles from social circles of a user. Facebook cashed in to the opportunity and tried to attract several different unsatisfied Twitter users. Moreover, Twitter must come up with a planning to increase its scale of infrastructure and maintain the ever increasing amount of data shared and uploaded by its users.
Brustein, J. (2013). How to Read Twitter's IPO Filing. Business Week .
Harbor, J. (2011). SWOT Analysis of Twitter. Journal of Advanced Technology , 12-19.
Neal, R. W. (2013). Twitter Valuation: Is IPO Overhyped And Overvalued? International Business Times .
Schonfeld, E. (2009). Twitter's Internal Strategy Laid Bare: To Be "The Pulse Of The Planet". Retrieved from TechCrunch: http://techcrunch.com/2009/07/16/twitters-internal-strategy-laid-bare-to-be-the-pulse-of-the-planet-2/
Smith, D. L. (2009). Twitter's Business Model: Brilliant or Non-Existent? Harvard Business Review .
Stone, B. (2013). The Twitter IPO: The Accidental Revolution Hurtles Toward Payday. Business Week .
Stone, B. (2013). Twitter, the Startup That Wouldn't Die. Business Week .
United States Security and Exchange Commission. (2013). Twitter Inc. California.
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