Social Networking Industries, Research Paper Example

Analyze the online social networking industry

Online social networking are gaining popularity in contemporary world. It is becoming on of the most advanced avenues of communication and exchange of views in the perspective of geographical barriers. The advancement of technology in the platform of social networking is an attraction to most people to join social networking. For every 12 minutes that are spent online, 1 minute account for social networking users. A clear understanding of the position established by social networking in global markets is based on a clear insight of the competition in the industry. The competition analysis is conducted through the 5 forces of Porter model through analysis of the strengths as well as the weaknesses in the market.

Assessment of online social networking industry based on Porter’s 5 forces of competition

Online social networking industry will need an ample environmental analysis on the basis of the five porter forces that will aid in the determination of the degree of competition in as far as the industry and the market place are concerned. This will include determination of potential threats caused by new entrants in the market, determination of the bargaining authority inherent in the customers, determination of the bargaining power intrinsic in the suppliers, determination of threats caused by substitute products as well as determination of competitive rivalry. This information is fully explained by the diagram underneath.

Determination of threats from new entrants

Competitors are a significant threat in implementation of social networking in the industry. Other powerful players such as Face book and MySpace have been in the field for a substantial time and have attracted significantly high number of users. For example, MySpace has been document to attract over 75.9 million users while face book has over 54.5 million users. The competitors are also offering the same services of connecting people and communication with the use of internet technology.

The existing competitors are also established in the market and do not need any investment in the market. Establishment of a social networking requires high investments in terms of research and development, time and extensive marketing to reach a wide customer base. This poses a significant challenge and a potential constraints in implementation of social networking

Determination of bargaining power inherent of clients

The bargaining power of clients plays a significant role in influencing competition. The buyers are now more experienced and enlightened in as far as social media is concerned. Most of the business have opted to up-skill their staff and take their businesses in-house.  The buyers are endowed with significant control attributed to joint axis and not price singularity.

Determination of threats posed by substitute products

The threats posed by substitute products are insignificant in determining the level of competition in this industry. It is important to determine if the business can be substituted in an easy way through better performance and faster delivery or relatively cheaper services and goods. This point requires a careful analysis of the price / performance trade-off which is an interesting aspect in social media industry. The customers may opt to sacrifice performance in favor of cheaper goods and services or vice versa. The issues of experience alongside skills paly a very important role in the industry of social media

Determination of competitive rivalry

Rivalry competitive is significantly high due to the increasing popularity and market share of other organizations in the industry.

Other social networking Web sites in the global marketplace

As mentioned earlier in this paper, there are other players social networking that have made considerable contribution to connecting people and easing communication in the global marketplace.  The popular contributors in this regard include Face book and MySpace and the two social networking Web sites have been in the field for a substantial time and have attracted significantly high number of users. It is noted that MySpace has attracted over 75.9 million users while face book has over 54.5 million users during their performance period in this industry.

Success factors for a social networking Web site

The functionality of social networking Web site in supporting communication, either directly or indirectly between groups and individual people is an important indicator of their success. The websites have also been associated with viral nature robust functionality, high levels of security and legitimacy which consequently have made them to gain appreciable market traction.

Competitive environment of the social networking industry

A competitive environment is a special consideration for social networking industry and a key determinant of its success. Consequently, determination of the best approach to enlighten users about existence of a specific social networking site is useful. This is achieved through advertising and stimulation of a social network viral nature that leads to the achievement of market traction.

Overall objective of the social networking Web site

In business, the use of social networking has gained high profile application as an avenue of connecting to the clients more easily and conveniently. The use of this innovative technology has facilitated for a more efficient and effective way of conducting business across the global. The implementation of a social networking Web site in an organization ideally connects all people in a global village.

References

Boojihawon, D & Segal-Hom, S., Strategy: strategy formulation 1. Milton-Keynes: Open University, 2006.

Lipsay, R. & Crystal, K. Economics, 11^th Ed. Oxford: OUP, 2007.

Lynch, R. Strategic Management, 5^th Ed. Harlow: Pearson Education, 2009.