Reports released on the growth have revealed there has been a downward trend on the growth of facebook. Various factors may have contributed to the slow growth. These factors can be internal or external factors.
Internal factors
These are factors within the company’s organizational structure. These factors range from the revenues, the expenses, profits and the staff of the company. Assets and the liabilities of the company are some of the issues that can bring negative growth on the facebook. Profit making is the main aim of any company. The rate at which facebook has been performing lately was caused by the company’s operational cost. This increase the expenses of the company thereby decreases the profitability. The company’s asset base is also vital in the growth of the company. The company’s quality of services and skills of the employees can greatly affect its performance. With employees who understand the customers’ needs and provide quality services the company, the company stands a better chance of improving its profitability.
The competency of the workers can promote the company’s image in the face of the existing and potential customers. Facebook’s initial public offer was under question as the investors complained of hitches that eventually cost the stock brokers. This tainted the image of facebook to public and later made the company’s growth to slow down. Investors also complained that facebook blocked vital information and raised the scale of the offer at the final stage. This IPO problem has highly contributed to facebook’s slow growth. The e-commercial companies have not been using facebook to reach their customers. (Calzolari, 2012).
Decrease in the facebook growth
Although facebook has been trying to penetrate into the available market in Africa and Asia, the low internet accessibility in these areas has been a hindrance. Another important factor is decision making process. Facebook majority voting power is in the hand of Mr. Zuckerberg (56%). This does not give shareholders any choice but to follow the decisions of Zuckerberg. As a result, makes the company bless attractive to investors. The fact that facebook is considered a free user company makes potential investor shy away from investing more in the company. Facebook users free of this to the social network..
External Factors
These are factors beyond the company’s control. They range from political, economic, and social factors. First, in business there must be competition. Facebook, just like any other companies, has been facing stiff competition from other companies that the same services as it does. Twitter, for example has found its way into the market and so many facebook have found it as an alternative to facebook. Also, the introduction of the smart phones in communication market has brought about a lot of challenges to the growth of facebook. Many facebook customers use smart phones instead of personal computers. This reduces facebook’s income from advertisements. Many companies that use facebook to advertise their product also switch to other companies that offer the same. Internet hackers have been a challenge to facebook. This puts the privacy of the customers at risk. It makes potential and existing customers look for alternatives. The network providers have also been a let-down to facebook. Although it has been trying to exploit the market in Africa and Asia, the inadequate network connection makes its effort futile. The hard economic times that has hit the world is a challenge to facebook as a company. The operation cost goes up when the world economy shakes. This is evident on the current poor performance of facebook in the stock exchange market. (Calzolari, 2012). The unforeseen factors such inflation also affect the performance of facebook. (Smith's and Zook's, 2011). The number of people engaging in facebook has also declined. This is because of economic hardship and other social engagements (Raice, 2012). It is also difficult to balance the shareholders’ expected returns and the company’s mission. (Vickery, 2012)
References
Calzolari, M. C. (2012). Escape from Facebook. London: Marco Camisani Calzolari.
Paul Smith's and Ze Zook's. (2011). Marketing Communications: Integrating Offline and Online
with Social Media. London: Kogan Page.
Raice, S. (2012). Days of Wild User growth Appear over at Facebook. Wall street Journal .
Vickery, J. (2012). Facebook Stock Price: Will Investors Drop FB Stock Amid Poor
Performance? Policymic .
