Triggers and Contingencies Discussion Assignment

December 16, 2022

Triggers and Contingencies Discussion Assignment

Order Number	636738393092
Type of Project	ESSAY
Writer Level	PHD VERIFIED
Format	APA
Academic Sources	10
Page Count	3-12 PAGES

Instructions/Descriptions

Triggers and Contingencies Discussion Assignment

Triggers, Contingencies, Discussion, Assignment

Prior to beginning this discussion, review section 7.4 Contingency Planning in your textbook. Strategic plans are focused on current and future company goals, therefore changes in the environment must be detected and monitored. Changes in the environment that impinge on the company’s strategic plan are known as external triggers and triggers are paired with plans to successfully deal with them. These paired actions are known as contingency plans. What qualities make a future issue a “trigger”?

As an example, consider you are on the strategic planning team for a soft drink company. A merger of two major competitors next year would constitute a future trigger. For this discussion, consider the Environmental Scan and SWOT analysis you conducted in Week 2. Formulate a trigger/contingency pair in the form of a three-part sentence similar to the example in the textbook. Examine it in terms of the three guidelines that good contingency plans should follow.

Post a summary of your selected company and risks that you perceive based on your prior Environmental Scan and SWOT analysis. State the three-sentence trigger/contingency pair and justify your choice of contingency plan using information from the week’s readings and/or other scholarly or credible resources, using the Scholarly, Peer-Reviewed, and Other Credible Sources (Links to an external site.) table for guidance.

(NOTE: Incorporate the feedback you receive from your instructor and save your work. It will be part of your Strategic Plan Final Project for this course).

Guided Response: Review several of your peer’s posts. Respond to at least two of your posts in a substantive manner and provide recommendations to extend their thinking. Support your position by using information from the week’s readings, or examples from current events and/or other scholarly or credible resources, using the Scholarly, Peer Reviewed, and other Credible Sources (Links to an external site.) table for guidance. Properly cite any references according to APA style as outlined in the University of Arizona Global Campus Writing Center’s APA Style (Links to an external site.) resource.

You are encouraged to post your required replies earlier in the week to promote more meaningful and interactive discourse in this discussion forum. Continue to monitor the discussion forum until 5:00 p.m. (Mountain Time) on Day 7, and respond with robust dialogue to anyone who replies to your initial post.

SWOT Analysis

Company profile and history

The advent of the internet and its applications has democratized media. Most people and communities around the world are now able to access platforms where they can connect, access content, information and exchange views and opinion on issues. Social media platforms have transformed journalism and elevated social networking beyond geographical, religious and ethnic boundaries (Piller et al., 2017).

The power of social media platforms is reflected by the daily active users on these platforms and the increasing utility in enterprise and the corporate world. In the information age, the internet and its applications such as social media platforms provide a frontier for growth, creativity and productivity.

Facebook Inc. founded in 2004 by Mark Zuckerburg and his Harvard University roommates has pioneered and revolutionized connectivity and social networking around the world. The company was founded by Mark Zuckerburg, Edwardo Saverin, Andrew McCollum, Dustin Moskovitz and Chris Hughes. Headquartered in Menlo Park, California, the company between 2004 to 2006, was initially limited to operate within the Harvard University Campus communities.

It became accessible to members of the public in September 2006 and has grown globally ever since with currently about 2.8 billion active monthly users. More developments and acquisitions over the years has elevated Facebook Inc. to be the sixth valuable company in the world with a market capitalization $839 billion dollars (Piller et al., 2017).

Products and services

Facebook Inc. is focused in the development and management of internet social networking platforms. The need for people and communities around the world to connect and network has become basic and significant in the information era. Facebook Inc. has been on the forefront in developing these platforms and utilities that enable and serve these needs.

The major platforms currently are Facebook, Instagram, WhatsApp, Messenger and Oculus. Facebook platform has 2.89 billion monthly active users while Instagram has about 1.0 billion monthly users. The messaging apps WhatsApp has about 2 billion active monthly users while Messenger has about 1.3 billion monthly users.

Competitors

Social media platforms and the potential growth that has been experienced over the last fifteen years has attracted more players and investments in the sector. There more than 20 major social media sites including those owned and operated by Facebook inc. Among the notable platforms that threaten the dominance of Facebook’s products include WeChat, a messaging platform owned by Tencent, the Chinese conglomerate.

WeChat with over 1.2 billion monthly users has been dominant in China and extended their products utility to include online payment services. YouTube a video sharing platform owned by Alphabet Inc. has about 1.9 billion monthly users who consumer on average 1.0 billion hours of video content every single day (Foeking, 2021).

Other major competitors include QQ (861 million users), Tumblr (642 million), Qzone (632 million), Tik Tok (500 million), Twitter (335 million), Reddit (330 million), Baidu (300 million), LinkedIn (294 million), Snapchat (255 million), Pinterest (250 million) and Telegram (200 million). Each of these platforms align with a different audience and their value propositions informs their product design, market development and penetration.

However, the basic and most significant key performance indicator has remained to be the number of monthly active users and the rate of adoption. Among the top 20 social media platforms Facebook Inc. owns and operates four of the five top social media platforms. This demonstrates the dominance of the company in the sector and more detail on it’s financials indicate a solid cash position, profitability and leverage advantage that enables it to invest in more futuristic ventures (Piller et al., 2017).

Financial performance of the company.

Income state financials

	TTM(2021)	2020	2019	2018	Average
Total Revenue	104790000	85965000	70697000	55838000
Cost of revenue	19934000	16692000	12770000	9355000
Gross profit	84856000	69273000	57927000	46483000
Operating expenses	40296000	36602000	33941000	21570000
Operating income	44560000	32671000	23986000	24913000
Net interest	521000	672000	904000	652000
Other Income expense	123000	-163000	-78000	-204000
Pretax income	45204000	33180000	24812000	25361000
Tax provision	6247000	4034000	6327000	3249000
Net Income	38957000	29146000	18485000	22112000

Ratios Analysis
Gross profit margin	80.98%	80.58%	81.94%	83.25%	81.69%
Operating margins	42.52%	38.01%	33.93%	44.62%	39.77%
Net Income margins	37.18%	33.90%	26.15%	39.60%	34.21%
Revenue growth rate	21.90%	21.60%	26.61%		23.37%
Net Income growth rate	33.66%	57.67%	-16.40%		24.98%

Balance sheet financials

	2020	2019	2018
Total Assets	159316000	133376000	97334000
Total liabilities	31026000	32322000	13207000
Total equity	128290000	101054000	84127000
Total Capitalization	128290000	101054000	84127000
Capital lease Obligations	10654000	10324000
Net tangible Assets	108617000	81445000	64532000
Working capital	60689000	51172000	43463000
Tangible Book value	108617000	81445000	64532000
Total Debt	10654000	10601000	500000

Ratio’s analysis
Total debt/Total assets	6.69%	7.95%	0.51%
Financial leverage	1.2418427	1.3198488	1.156989
Net tangible/total assets	68.18%	61.06%	66.30%
Capital leases/total assets	6.69%	7.74%	0.00%
Return on Assets	18.29%	13.86%	22.72%
Return on equity	22.72%	13.86%	22.72%

The above table demonstrates the healthy and solvency of the company. With an average profit margin of 81.69%, this demonstrates a healthy and feasible business model of its line of products. 39% average operating profit margins for the last three years is a testament of how efficient and effective the company is in its operational management.

The difference between operating margins and net margins is 5%, indicating low interest and capital lease obligations and hence solvent capital structure. Annual growth rate in revenues for the last three years has been 23%. With debt to asset ratio averaging 5%, the company is under levered and hence inefficient in it’s use of capital structure. With less leverage, the 19.77% average return on equity has the potential to grow two-fold if a more optimized capital structure was embraced (Yahoo Finance, 2020).

SWOT Analysis

Strengths

· Strong Brand equity

· A well diverse product portfolio

· A healthy financial resource

· A democratized marketing strategy

· Competent leadership/management

· Ability to attract talent

· Loyal customer and user base

Weaknesses

· Data privacy concerns

· Spread of fake news on its platforms

· Undiversified revenue model

· Boardroom wrangles

Opportunities

· Growing internet penetration

· Integration of the product portfolio

· Ability to acquire new platforms

· Shift in advertising trends

· Expansion of existing platforms

Threats

· New emerging platforms

· Regulatory threats

· Geopolitical threats

· Misuse of data

· User authenticity issues

Areas for change management

The SWOT analysis above provide a holistic view of the company’s operating environment and elements that significantly affect its performance. The SWOT tool provides a basis that will inform the strategic direction of the company to improve its product deployment and the technological and market scalability going forward. With great growth potential and annual revenue growth rate of 23%, the company is well positioned to generate the much-needed cashflow to beat its competition.

However, this potential is not reflected in its capital structure (Marrianne, 2020). What this means therefore, is that a financial leverage of 1.24 is less optimal and inefficient. The company having obtained most of its growth through acquisition of new platforms such as WhatsApp and Instagram can embrace a more leveraged capital structure by undertaking acquisitions that are debt driven. This will enable a more diverse product portfolio without interfering with the available financial resources.

Recommendations for Improvement

A revenue model that is highly advertisement centered threatens the long-term feasibility of the company’s business model. While this has been an effective model to generate revenues, a shift in the consumer preferences threatens the effectiveness of advertisement as a source of revenue. While social media platforms are more effective advertisement vehicles than traditional legacy platforms such as TV and Radio. This is because of a targeted and more customized marketing campaigns and ability for the advertised to evaluate the reach and impact of an advert and hence the return on investments.

This is however, entirely dependent on the daily active user count. Over the last 5 years, there has been a shift in user preference with a lot of young users shifting towards other platforms such as Tik Tok and SnapChat. A decrease in daily active user count affects the company’s advertisement revenues. A more diversified revenue model that incorporates subscriptions is necessary to hedge against declines in advertisement revenues (Marrianne, 2020).

References

Foeking, N. (2021). How do investors react to the data breaches news? Empirical evidence from Facebook Inc. during the years 2016–2019. Technology in Society, 67, 101717. https://doi.org/10.1016/j.techsoc.2021.101717

Marrianne, J. (2020, August 2). The Real (And Ethical) Lessons From JP Morgan Chase And The Facebook Ipo – ProQuest. Www.proquest.com. https://www.proquest.com/openview/7739d2cec31dd6c56c077d5e635c184f/1?pq-origsite=gscholar&cbl=46775

Piller, F. T., Vossen, A., & Ihl, C. (2017, December 21). From Social Media to Social Product Development: The Impact of Social Media on Co-Creation of Innovation. Papers.ssrn.com. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1975523

Yahoo Finance. (2020). Facebook, Inc. (FB) Stock Price, Quote, History & News – Yahoo Finance. @YahooFinance. https://finance.yahoo.com/quote/FB?p=FB

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Triggers and Contingencies Discussion Assignment

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More depth/information is required for the context and importance, otherwise the study detail will be unclear. There is no search history information supplied.

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There is a review of important theoretical literature, however there is limited integration of research into problem-related ideas. The review is just partly focused and arranged. There is research that both supports and opposes. A summary of the material given is provided. The conclusion may or may not include a biblical integration.

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There is no logical or apparent organizational structure. There is no discernible logical sequence. The use of typeface, color, graphics, effects, and so on often detracts from the presenting substance. It is possible that the length criteria will not be reached.