This is the detailed PESTEL/PEST/PESTLE analysis of Facebook. It’s a famous social network which is being used across the globe by different age group people to remain in contact with their loved ones and make new friends.
Facebook is a networking service used all around the world, and is the most famous social networking sites used by individuals as well as organizations. With its widespread use around the world, we will analyze how different external factors can affect the working of Facebook in different regions using PESTEL Analysis.
Political Factors
Political stability in a country is very important for Facebook to be accepted by its people. Since it’s an open platform for people to express their views, some governments might see it as a threat and such governments prefer to come in some terms with Facebook in order to work in their country, so Facebook has to comply to their rules and demands so that they can run their business in that country. Some governments, like China, do not allow Facebook to operate in their region, so Facebook loses their business in such regions. Some countries also have their own local social networks that Facebook has to compete with and sometime Facebook does less business than expected because of such unstable government rules.
Economic Factors
Facebook is such a huge platform now that it contributes to the economy of the country that it operates in. But, the current economic conditions of a certain region can also affect the business for Facebook. The GDP of a certain country speaks about the purchasing power and consumer patterns of that country which can affect Facebook as well. For instance, if people do not have money, they won’t be able to buy devices to use Facebook on. Other factors like tax rate, labor rate, credit terms and monetary policies of a country can also affect Facebook in a negative or a positive way.
Sociocultural Factors
Factors such as education level of majority of the population, in a certain country, affect the usage of Facebook in that country. Other than that, people’s attitude towards the acceptance of such a social network also affects Facebook’s business. For instance, if people do not feel comfortable or secure in sharing their information on such a pubic platform, they will stop using Facebook and feel threatened by it, this will result in less revenues for Facebook. Moreover, sometimes people also feel threatened or cannot trust an organization that is coming from a foreign land, and they might not share their information due to that reason as well. Also, Facebook is mostly used by younger population and if there is a huge proportion of younger population in a country, that will increase the revenues for Facebook.
Technological Factors
Facebook is all about technology and has been consistent in following the technological trends, making it convenient for the consumers to be able to access their Facebook from any device, anywhere. Consumers demand convenience, so if Facebook provides its access in all the technological devices introduced in the market, then people will find it convenient to use Facebook and thus will result in more revenues for Facebook. Constantly investing in technological improvements will result in more sales for Facebook.
Environmental Factors
The business model of Facebook should incorporate the sustainability model so that it is somehow contributing towards economic environment. Since it is an online network, the environmental factors usually have no effect on the revenues of Facebook, but involvement in conservation projects can help them gain good brand name.
Legal Factors
When entering an international market, Facebook has to comply with patent rules, copyright laws and data protection laws of a certain country or region. These laws help Facebook to carry out smooth business in that country and thus gain good revenues as well. At times, these laws hinder in the smooth running of Facebook, and might not gain them expected revenues.
References
Nations, D. What Is Facebook? Here’s What You Should Know. Retrieved October 7, 2017, from https://www.lifewire.com/what-is-facebook-3486391
Levin, B. (2016, July 28). Facebook’s political controversy points to emerging issues between cities and big-data platforms. Retrieved October 7, 2017, from https://www.brookings.edu/blog/the-avenue/2016/06/08/facebooks-political-controversy-points-to-emerging-issues-between-cities-and-big-data-platforms/
InstantShift. Facebook and The Impact of Technology. Retrieved October 7, 2017, from http://www.instantshift.com/2012/08/22/facebook-and-the-impact-of-technology/