Table of Contents
Introduction to Facebook
Facebook, the world’s biggest social media platform with having 2.89 billion active users across the world, began its journey in 2004. Mark Zuckerberg, Dustin Moskovitz, Chris Hughes, and Eduardo Saverin are its founding members, and the rest is history. The company has hired approximately 44942 employees to run its various operations.
Paid advertisements are the major source of income of Facebook. According to an estimate, 70.7 billion dollars is the approximate annual profit of the company. After deducting all the taxes and other expenses, the company is left with a net income of 18.5 billion dollars.
Instagram, Lasso, Messenger, Whatsapp, Watch, Marketplace, Calibra, Oculus, Workplace, and Portal are some of the other service platforms that Facebook offers to its diverse users worldwide, depending upon their needs and preferences.
Now, it is time to discuss how various geographical factors like political, economical, social, technological, legal, environmental factors affect the functionality and business operations of Facebook.
We’ll study all of these factors one by one, here’s the pestle analysis of Facebook;
How Political Factors Affect Facebook
Facebook provides complete autonomy to its users to post and share whatever they wish, freedom of speech in true sense. There is no restriction on the usage of the platform ever since it went public. The rise in popularity of the platform has attracted a lot of new users, many organizations, companies, radical, and political institutions also created their business accounts.
In the midst of a competitive environment, conspiracy theorists are also pushing their views onto the public. However, critics have hailed on the CEO of Facebook, Mark Zuckerberg, for the alleged Russian interference in the election of 2016. Whether it’s true or not, but it has changed the perception of people about Facebook.
We all know that incidents and events create public perception. When you have billions of users, you can show them whatever you want and change their views about something or someone. They will decide whatever you wish. Companies, businesses, and institutions are playing this propaganda game over Facebook.
Prohibited in some Countries
Whether the information is correct or wrong, people get awareness. Now, it’s up to them how to analyze the information and make their decision. In some countries, where the government pushes her biased agenda over the public, it becomes difficult in the presence of Facebook.
An open platform where people share information poses a great threat to the government agenda. Therefore, countries like North Korea, Iran, and China have banned the usage of Facebook in their countries.
Facebook, on the other hand, has its agenda and that is less restriction, rules, and reporting. That’s why Facebook has a political action committee; the purpose of this committee is to increase political affiliation and links of the company.
Political parties also need the influence and power of Facebook, because they want to change the perception of people based on the information that Facebook could provide. In the 2016 US election, the content marketers of Donald Trump played the same techniques of manipulating with data and won the election.
How Economical Factors Affect Facebook
Some of the countries where Facebook has a plethora of users, they want Facebook to open its office in their countries as well and pay taxes as well. If Facebook starts opening sub-offices and hiring employees in other countries, then it means 100 of millions of losses to the company.
According to some sources, Facebook has helped the economy to create approximately 4 million jobs in 2014. It because of the freelancing and promoting businesses through Facebook; when those businesses flourish, then they create job opportunities.
The business of Facebook is classic and simple and it is based on advertisements just newspapers and magazines ads. However, the ads of Facebook are even more effective because it provides you an opportunity to reach the audience of your choice. You just have to create a profile of your target customers, and then choose the audience on Facebook accordingly.
Scandals like fake news and data security breach are making the people leave the FB platform. That’s why investors (advertisers) are losing trust in the company because of such news. If scandals and news like these keep floating, it would badly affect the revenue stream of the company.
How Social Factors Affect Facebook
Incoherence with Core Values
Facebook started its journey as a social networking website. The purpose is to connect people across the world. It also provides you an opportunity to connect with the people whom you have never met, but you share the same values, respect, and beliefs.
Those were the core values and beliefs of the company, but they were shifted with the passage of time. When profit became the center of the company and the newsfeed of the users includes advertisements of different companies. All they want is to sell their product and services.
Paid post of different institutions is to push their agenda onto you. The more you watch, the more they would appear on your newsfeed. The algorithm of Facebook prefers to promote the business pages of companies over your friends’ posts.
Lost in Quality Service
Fake news, logging in issues, sponsored posts, and advertisements have disturbed the newsfeed of billion of users across the world. Many people have been complaining that Facebook has been complaining that the platform isn’t the same as it used to be.
How Technological Factors Affect Facebook Inc.
More than a Platform
In the beginning, it was a social networking website over the internet. But now, it is more than a platform, its parallel application messenger allows you to send text/voice messages and audio/video call people who are in your friend list. It works completely separately from Facebook, although it’s a part of Facebook.
Having discussed earlier that data security is a serious technological issue for Facebook. Therefore, the company must protect the privacy of its users from hackers.
Other brands of the company like Instagram are getting more popular among young users because it only has short pictures and short videos. Where people show their lives with pictures and videos, the people who are interested in them follow them.
How Legal Factors Affect Facebook
Data breaches over Facebook are becoming common nowadays, hackers hack into the personal profile of FB users almost every day. The scenario is very badly impacting the overall reputation of the company and making people leave the platform. It could also result in the form of a massive lawsuit from any influential political figure.
Data Protection Laws
European Union has recently launched a new general data protection regulation (GDPR) that would make tech companies including Facebook to protect users’ data. If companies aren’t unable to comply with users’ security, then they have to pay heavy fines and penalties.
How Environmental Factors Affect Facebook
Renewable Energy Source
Most of the companies and businesses are under great pressure to convert into a renewable energy source. However, Facebook is also one of those companies that are still relying on coal, oil, and gas as an energy source to power their data storage centers.
If Facebook fully converts into a renewable energy source, then it would be a great achievement of the company.
After studying all the factors and sub-factors in pestle analysis of Facebook, we have concluded that political, economical, social, technological, legal, and environmental factors are such macro issues that are out of the control of the company. If the company doesn’t comply or consider these factors as issues, then it would cost the company a lot.