The strategy adopted by Facebook to acquire its competitors such as Instagram, WhatsApp and Oculus represents the fact that it is trying to eliminate competition in the social networking industry. Even though it cannot be said whether Facebook would be successful in buying out all of its major competitors such as twitter in order to operate as a monopoly, however, its past actions regarding the acquisition of social networks clearly states its future intentions.
So it is basically quite obvious as to why Facebook wants to acquire all these social networks. Instagram, which has gained quite some popularity in the past few years, for the exchange of pictures, posed a great threat to Facebook, which along with its other functions, was serving as the largest site for the sharing of information and photos. So there goes Facebook acquiring it and minimizing its threat. Then, it was WhatsApp, which again was growing so extensively that it was forced to be sold to Facebook for quite a heavy amount. And now Oculus, which is a technology company that makes Oculus Rift headset, was recently sold off to Facebook.
The basic strategy is to eliminate as much competition as they can and simultaneously gaining the maximum market share of social users through the various platforms such as WhatsApp or Instagram. Where at once Facebook was only providing a social network to share information and photos, now it has expanded itself to provide the service of WhatsApp which serves only as a communication network.
The greater the size of the company, the greater power it poses to its competitors. Whether it is about the benefits of economies of scale or economies of scope, a larger company size does make you strong in the market and serve as a threat to the existing competitors. And lastly Facebook acquires its competitors because it can, it has the power to and so by utilizing that power and dominance it is expanding its market base.
For more topics, please visit www.dsource.co
No comments:
Post a Comment