The Development of the Social Media Industry: The Case of Twitter

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A PESTEL analysis for the macro-environmental impact on the social media industry suggests the dependence of the field on uniform external factors. Thus, in the case of Twitter, it is clear that they include the platform’s role in political affairs, the fast development of the company alongside its competitors, and the increase in the numbers of people interested in their services in the first place (Turnipseed, 2018). It means that political, economic, and technological factors are of great importance for the business and have the greatest potential impact on Twitter because they define the measures, which should be introduced. They are complemented by creating new means of communication as per the social aspect and the need to eliminate legal risks in conflicts, such as the situation with Jared Taylor (Turnipseed, 2018). Meanwhile, as per the case study, environmental needs are not addressed, which can adversely affect the company’s image. Thus, this framework shows that the development of the social media industry primarily depends on the environment.

The driving forces in the social media industry are related to several factors. They are technological advances, the opportunity to access large amounts of information, and the need for communication. In other words, the orientation on the social aspect is combined with the emerging means for its improvement. As can be seen from the case of Twitter, these factors affect its development in the long run. Thus, the requirement to keep up with the competition is explained by the adoption of new solutions, the social aspect determines its popularity among the users, and the necessity to quickly find information adds to their intention in modifying the platform. The same rules can be applied to its competitors and, therefore, serve as their driving forces.

Strengths Strong brand image Innovative approach Large audience	Weaknesses Slow paces of growth Insufficiency of funds for promotion Dubious policies regarding the content
Opportunities Expansion through diversification Unique services The involvement of businesses	Threats Competition Decreasing attractiveness Harassment

The SWOT analysis for Twitter effectively reflects on the company’s current position. According to it, the principal strengths are related to the recognizable brand image, the focus on innovation, and the increasing number of users (Turnipseed, 2018). Meanwhile, the situation is complicated by weaknesses, including a slow pace of growth since 2018, insufficiency of funds, and dubious policies regarding the acceptable content (Turnipseed, 2018). In these circumstances, the opportunities for Tweeter are to expand its activity through developing new services based on the unique micro-blogging features and involvement of businesses for greater profitability (Turnipseed, 2018). These factors are complemented by threats, which are high competition in social media and their decreasing attractiveness due to the cases of harassment (Turnipseed, 2018). Thus, this analysis suggests further development of Twitter will primarily relate to their capability to find funds through cooperating with businesses for the consequent expansion.

The financial situation of Twitter implies the need for developing new measures. This conclusion is explained by the increasing costs of procedures contrasted by insufficient funds (Turnipseed, 2018). In addition, the positive correlation between cutting expenses and the lack of growth demonstrated by indicators of short-term and long-term liabilities seems alarming (Turnipseed, 2018). In this case, if they do not find funds for promotion, Twitter will face a period of stagnation followed by a gradual decline in profitability.

Twitter’s performance compared to the results of Facebook and Snap seems insufficient for increasing its competitiveness. This fact is confirmed by the faster growth in revenue of these two companies, the correspondence of their expenses to profits, and the continuously increasing asset net worth (Turnipseed, 2018). In turn, Twitter cannot compete with these businesses in terms of the mentioned indicators. Therefore, it is clear that if the company does not make a drastic change in its operations, Facebook and Snap will remain clear winners.

Reference

Turnipseed, D. L. Twitter Inc. in 2018: Too little too late? [PDF Document].

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Reference

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