Case Analysis in Strategic Management

St.
Paul University Philippines

Tuguegarao City, Cagayan 3500
St. Paul University Philippines
CBME 102 STRATEGIC MANAGEMENT AND TOTAL QUALITY MANAGEMENT
__________________
In Partial Fulfilment of the Requirements for the Degree Bachelor
of Science in Hospitality Management and Tourism Management 3A
__________________
Submitted to: Dr. Juvie D. Bacani

CASE ANALYSIS
Facebook: Social Media Dominance And Data Privacy
____________________
Prepared by:
Manuel, Mharianne L.
TABLE OF CONTENTS
1. Introduction
2. Environmental Analysis
2.1 General Environment
2.2 Operating Environment
2.3 Internal Environment
3. Problem Definition
4. Alternative Courses of Action
4.1 Data Privacy Breaches
4.2 Anti-Trust Concerns
4.3 Content Moderation Failures
5. Chosen Alternative and implementation
5.1 Improving Data Privacy Practices
5.2 Addressing Anti-trust Concerns
5.3 Improving Content Moderation
5.4 Implementation Plan
5.5 Key Resource and Potential Challenges
6. Summary of Analysis
7. Technical Appendices
8. References
1. Introduction
Facebook was founded in 2004 by Mark Zuckerberg
and quickly grew from a college social network to a global
phenomenon. By 2012, Facebook had reached 1 billion monthly
active users, and by the end of 2021 it had over 2.9 billion
users, making it the largest social media platform in the world.
(Carlson, N. 2023) Facebook's user base dwarfs that of other
major social networks like TikTok, Instagram, Twitter, and
Snapchat, and the platform has become an essential utility for
billions of people to communicate, share content, and consume
news and information.
Facebook's explosive growth was fueled by several
key factors, including viral growth and network effects as more
people joined to connect with friends and family, successful
mobile apps that drove adoption on smartphones, strategic
acquisitions of popular apps like Instagram and WhatsApp, and
leveraging user data to provide highly targeted advertising
opportunities. This rapid expansion allowed Facebook to solidify
its position as the dominant social media platform globally.

However, Facebook has also faced numerous
controversies and issues over the years. There have been numerous
scandals over how Facebook collects, uses, and shares user data ,
most notably the Cambridge Analytica scandal in 2018, which
raised major concerns about the platform's privacy practices.

1
Facebook has also struggled to effectively
moderate the massive amount of content shared on its platform,
including the spread of misinformation, "fake news", and divisive
political content. Additionally, Facebook's market dominance and
acquisitions have raised concerns about stifling competition in
social media, leading to increased regulatory scrutiny and
investigations. These issues have resulted in significant
reputational damage for Facebook, and the company continues to
grapple with these complex challenges as it maintains its
position as the global social media leader.

2. Environmental Analysis
2.1 General Environment
Social
Social trends surrounding data privacy have undergone a
significant shift in recent years. Users are increasingly
concerned about how their personal information is handled by tech
companies like Facebook. High-profile data privacy scandals, such
as the Cambridge Analytica incident, have eroded trust in the
platform and highlighted the need for greater transparency and
accountability. Moreover, there is a growing emphasis on ethical
technology, with users demanding that companies prioritize values
like privacy, security, and fairness.
Economic
Facebook's dominance in the social media market has raised
concerns about competition and innovation. The platform's sheer
size and reach give it significant market power, which has led to
accusations of anti-competitive behavior. Regulatory responses,
such as antitrust investigations and lawsuits, aim to address
these concerns and promote a more level playing field in the
digital economy.
3
Political
The political landscape is shaped by evolving policies and
regulations aimed at protecting user data and promoting
competition. Laws like the GDPR in the EU and the CCPA in
California represent significant milestones in data privacy
regulation, imposing stricter requirements on companies like
Facebook. Additionally, increased antitrust scrutiny seeks to
challenge the dominance of big tech firms and ensure fair
competition in the marketplace.
Legal
Facebook has faced legal repercussions for its past privacy
violations, including fines and regulatory sanctions. The
platform's handling of user data has come under intense scrutiny,
leading to investigations by government agencies and regulatory
bodies. As the regulatory landscape continues to evolve, Facebook
may face further legal challenges and regulatory actions that
could impact its business operations.
Technological
Technological advancements play a pivotal role in shaping
Facebook's approach to data privacy. The rise of data-driven
business models enables the platform to leverage user data for
targeted advertising and personalized services. However, the
4
emergence of alternative social media platforms, including
decentralized and privacy-focused alternatives, poses a challenge
to Facebook's dominance and underscores the importance of
prioritizing user privacy and security.
2.2 Operating Environment
International
Facebook operates on a global scale, with a presence in
almost every country around the world. However, the regulatory
environment varies significantly across different regions,
presenting a complex challenge for the company. In some regions,
like the European Union, stringent data privacy laws such as the
GDPR impose strict requirements on how companies handle user
data. In contrast, other regions may have more lax regulations,
creating potential risks for data misuse and privacy violations.
Facebook must navigate these diverse regulatory landscapes while
ensuring compliance with local laws and regulations.
Suppliers
Facebook relies on a network of suppliers, including data
providers, advertising partners, and technology suppliers, to
support its operations. Data providers play a crucial role in

5
supplying the platform with user data, which is used for targeted
advertising and content personalization. Advertising partners
help monetize the platform by placing ads and sponsoring content.
Technology suppliers provide the infrastructure and tools
necessary for Facebook's services to function efficiently.
Maintaining strong relationships with these suppliers is
essential for Facebook's continued success and growth.
Competition
The social media landscape is highly competitive, with
numerous platforms vying for user attention and engagement. While
Facebook remains the dominant player, it faces increasing
competition from platforms like TikTok and other emerging
alternatives. TikTok, in particular, has experienced rapid
growth, especially among younger demographics, posing a
significant challenge to Facebook's market share. To stay
competitive, Facebook must innovate and adapt its offerings to
meet changing user preferences and behaviors.
Customers
Facebook's customers, namely its users, have evolving
preferences, concerns, and behaviors related to data privacy and
content moderation. There is a growing awareness of data privacy
issues among users, driven by high-profile data breaches and

6
scandals. Many users are becoming more cautious about sharing
personal information online and are demanding greater
transparency and control over their data. Additionally, concerns
about misinformation, hate speech, and harmful content have led
to calls for stricter content moderation policies. Facebook must
listen to its users' feedback and address their concerns to
maintain trust and loyalty.
Labor
Facebook faces challenges in attracting and retaining
talent, particularly in areas such as content moderation and
ethical AI. Content moderation is a demanding and emotionally
taxing job, requiring employees to review and remove potentially
harmful content from the platform. Facebook must provide adequate
support and resources to ensure the well-being of its content
moderators and prevent burnout. Additionally, as the ethical
implications of AI become increasingly important, Facebook needs
to recruit skilled professionals who can develop and implement
ethical AI practices. Competition for talent in these areas is
fierce, requiring Facebook to offer competitive salaries,
benefits, and opportunities for career advancement.
2.3 Internal Environment

7
Organizational
Facebook's business model revolves around data collection
and targeted advertising. The platform collects vast amounts of
user data, including demographics, interests, and online
behavior, to create detailed profiles that advertisers can target
with precision. This data-driven approach allows Facebook to
offer highly effective advertising solutions while providing
users with personalized experiences. However, this reliance on
data collection also exposes the company to risks related to data
privacy and regulatory compliance.
Marketing
Facebook's brand reputation and public perception have been
significantly impacted by data privacy scandals in recent years.
Events like the Cambridge Analytica scandal have raised concerns
about the company's handling of user data and eroded trust among
users and regulators. Facebook has faced backlash and criticism
from various stakeholders, leading to damage to its brand
reputation. Efforts to rebuild trust and improve public
perception are ongoing, but the company continues to face
scrutiny and skepticism regarding its commitment to data privacy.
Financial
8
Facebook faces potential financial impacts from regulatory
fines, user attrition, and increased compliance costs. Regulatory
fines for data privacy violations can be substantial, as
demonstrated by multi-billion-dollar penalties imposed by
regulatory authorities. User attrition resulting from privacy
concerns or dissatisfaction with the platform could affect
advertising revenue and overall profitability. Additionally,
increased compliance costs associated with implementing stricter
data privacy measures and regulatory requirements can put
pressure on the company's financial performance.
Personnel
Facebook's leadership, decision-making processes, and
organizational culture play a crucial role in shaping the
company's approach to data privacy and ethical practices.
Leadership decisions regarding data policies and privacy controls
have significant implications for user trust and regulatory
compliance. The company's organizational culture should
prioritize ethical considerations and transparency in data
handling practices. Efforts to promote a culture of
accountability and responsibility in data management are
essential for maintaining user trust and regulatory compliance.
Production
9
Facebook employs various content moderation strategies and
technologies to address harmful and misleading content on its
platform. These include a combination of automated tools,
artificial intelligence, and human moderators to review and
remove violating content. However, content moderation poses
significant challenges, including the sheer volume of content
uploaded to the platform, the diversity of languages and cultures
represented, and the need to balance free speech with preventing
harm. Facebook continually invests in improving its content
moderation processes and technologies to address these challenges
effectively.
3. Problem Definition
Data Privacy Breaches
Facebook has been embroiled in numerous data privacy
scandals, most notably the Cambridge Analytica incident, where
the personal data of millions of users was harvested without
their consent for political purposes. These breaches have eroded
user trust and raised serious concerns about Facebook's handling
of user data, including its transparency, accountability, and
commitment to protecting user privacy.
Antitrust Concerns
10
As one of the largest tech companies in the world,
Facebook's market dominance has raised antitrust concerns. The
company's acquisitions of potential competitors, such as
Instagram and WhatsApp, have drawn scrutiny from regulators and
lawmakers, who argue that Facebook's market power stifles
competition and innovation. Additionally, concerns have been
raised about Facebook's control over the digital advertising
market and its ability to exploit user data for anticompetitive
purposes.
Content Moderation Failures
Facebook has faced criticism for its handling of harmful and
misleading content on its platform. Despite investing heavily in
content moderation tools and processes, the company has struggled
to effectively curb the spread of misinformation, hate speech,
and other harmful content. High-profile incidents, such as the
role of Facebook in the spread of misinformation during elections
and the proliferation of hate speech and violence on the
platform, have underscored the shortcomings of Facebook's content
moderation efforts and raised questions about its ability to
responsibly manage its platform.
4. Alternative Courses of Action
11
4.1 Data Privacy Breaches:

- Implement robust data security measures and encryption to
protect user data from breaches and hacking attempts.
- Increase transparency around data collection and usage
practices and provide users with granular control over how their
information is used.
- Strengthen data protection regulations and enforce hefty
penalties for companies that mishandle or improperly share user
data.
- Conduct regular independent audits of data practices and
security protocols.
- Provide users with easy mechanisms to access, download, and
delete their personal data.
4.2 Antitrust Concerns:

- Enforce antitrust laws to prevent further consolidation and
promote competition in the social media/tech sector.
- Break up dominant tech conglomerates into smaller, independent
companies to reduce their power and influence.
- Impose restrictions on mergers and acquisitions to limit the
ability of large platforms to acquire potential competitors.
- Require social media platforms to allow data portability and
interoperability to reduce user lock-in.
- Regulate dominant platforms as essential infrastructure and
utilities, subjecting them to more public oversight.
4.3 Content Moderation Failures:

- Develop clear, transparent, and consistent community guidelines
for acceptable content and behavior.
- Invest in scalable and effective AI-powered content moderation
tools, while maintaining human oversight.
12
- Empower users with more control over their feeds and the
ability to customize their experience.
- Increase platform accountability through independent audits of
content moderation practices.
- Collaborate with experts, civil society, and policymakers to
address complex content moderation challenges.
- Expand fact-checking efforts and promote media literacy to
combat the spread of misinformation.
5. Chosen Alternative and Implementation

5.1 Improving Data Privacy Practices:
Strengths:
 Enhances user trust and loyalty by demonstrating a
commitment to privacy.
 Proactively addresses regulatory scrutiny and potential
fines.
 Positions Facebook as an industry leader in responsible data
stewardship.
Weaknesses:
 Requires significant investment in security infrastructure
and personnel.
 May limit Facebook's ability to monetize user data through
targeted advertising.
13
 Faces resistance from shareholders prioritizing growth and
profitability.
5.2 Addressing Antitrust Concerns:
Strengths:
 Reduces Facebook's dominance and market power, potentially
fostering more competition.
 Appeases regulators and policymakers seeking to curb the
influence of tech giants.
 Opens up opportunities for smaller social media platforms to
gain market share.
Weaknesses:
 Requires complex and protracted legal battles with antitrust
authorities.
 Disrupts Facebook's strategic vision and business model.
 May result in a loss of scale advantages and synergies.
5.3 Improving Content Moderation:

14
Strengths:
 Enhances Facebook's reputation as a responsible platform
for user-generated content.
 Helps mitigate the spread of misinformation, hate speech,
and other harmful content.
 Demonstrates a commitment to addressing societal concerns
around social media's impact.
Weaknesses:
 Requires significant investment in human reviewers and AI-
powered moderation tools.
 Faces challenges in effectively moderating content at scale
across multiple languages and cultural contexts.
 May result in user backlash or perceptions of censorship,
depending on the approach.
5.4 Implementation Plan:
1. Enhancing Data Privacy Practices (0-24 months):
- Conduct a comprehensive review of Facebook's data
collection, storage, and usage practices.
- Implement robust data security measures, including end-

15
to-end encryption, multi-factor authentication, and regular
security audits.
- Increase transparency around data practices through
clear and user-friendly privacy policies and controls.
- Empower users with granular control over their personal
data, including the ability to access, download, and delete
information.
- Collaborate with privacy experts and regulators to
ensure compliance with evolving data protection laws.
2. Addressing Antitrust Concerns (12-36 months):
- Engage with antitrust authorities and policymakers to
understand their concerns and explore potential solutions.
- Consider strategic divestitures of certain business
units or platforms to reduce Facebook's market dominance.
- Advocate for regulations that promote interoperability
and data portability, enabling users to more easily switch
between social media platforms.
- Invest in the development of smaller, independent
social media platforms to foster greater competition in the
market. 16
3. Improving Content Moderation (6-24 months):
- Establish clear and transparent community guidelines
for acceptable content and behavior.
- Invest in scalable AI-powered content moderation tools,
while maintaining human oversight and review processes.
- Empower users with more control over their feeds,
including the ability to customize and filter content.
- Collaborate with external experts, civil society
organizations, and policymakers to develop best practices for
content moderation.
- Expand fact-checking efforts and promote media literacy
initiatives to combat the spread of misinformation.
5.5 Key Resources and Potential Challenges:
- Significant financial and human resources to invest in
data privacy, security, and content moderation efforts.
- Attracting and retaining talent with expertise in data
protection, antitrust, and content moderation.

17
- Navigating complex regulatory environments and potential
legal battles with antitrust authorities.

- Managing user backlash and maintaining platform engagement
during the implementation process.
- Ensuring seamless integration and coordination across
various initiatives and teams.
6. Summary 18
Facebook has faced numerous controversies over how it
collects, uses, and shares user data, most notably the Cambridge
Analytica scandal. This has resulted in significant reputational

damage and raised major concerns about the platform's privacy
practices.
To rebuild user trust and address these data privacy issues,
Facebook needs to take a comprehensive, responsible approach to
platform governance. A crucial element of this is demonstrating a
strong commitment to data privacy and transparency through
several key actions.
Improving Data Privacy Practices, this is a prudent and
responsible approach that addresses growing concerns around data
privacy and security. Enhancing data protection measures,
increasing transparency, and giving users more control over their
personal information are all important steps that can help build
user trust and mitigate regulatory risks. The investment required
is significant, but the long-term benefits of positioning
Facebook as an industry leader in responsible data stewardship
outweigh the potential drawbacks of limiting certain monetization
activities.
Addressing antitrust concerns through measures like
enforcing competition, restricting mergers and acquisitions, and
promoting data portability is a complex challenge that will
likely require extensive legal battles and regulatory

19
negotiations. While this approach can reduce Facebook's market
dominance and foster a more competitive landscape, the disruption
to the company's strategic vision and potential loss of scale
advantages are significant weaknesses that need to be carefully
considered. Collaboration with policymakers and a proactive
stance may be necessary to navigate this issue effectively.
Enhancing content moderation capabilities, expanding fact-
checking, and promoting media literacy are all crucial steps in
addressing the growing challenges around misinformation, hate
speech, and other harmful content on social media platforms. This
approach can help improve Facebook's reputation and demonstrate a
commitment to addressing societal concerns. The significant
investment required in human reviewers and AI-powered tools, as
well as the inherent complexities of moderating content at scale,
are important considerations. Maintaining a balance between
effective moderation and preserving user experience will be
crucial.
By taking these concrete steps across policy, reporting,
governance, collaboration, and product design, Facebook can show
its genuine dedication to protecting user data and regain
credibility. This holistic approach to responsible data practices
is crucial for the company's long-term sustainability amidst the
evolving social media landscape. 20

7. Technical Appendices
https://www.bing.com/images/search?
view=detailV2&ccid=hOD1GLc6&id=8798C102E1DD694F8FAB583C124AA25AF2356F2A&thid=OIP.hOD1G
Lc6Dk5Dph3hjjBhIwAAAA&mediaurl=https%3A%2F%2Ffanyv88.com%3A443%2Fhttps%2Fth.bing.com%2Fth%2Fid
%2FR.84e0f518b73a0e4e43a61de18e306123%3Frik%3DKm818lqiShI8WA%26riu%3Dhttp%253a%252f
%252fcdn.statcdn.com%252fInfographic%252fimages%252fnormal%252f10047.jpeg%26ehk%3D
%252fHS3DOK%252bQzWloeu78ZhrLWoWl0hyaMLOFgWToy%252f%252f8QM%253d%26risl%3D%26pid
%3DImgRaw%26r
%3D0&exph=474&expw=474&q=Facebook+User+Growth+and+Revenue+Trends&simid=608037082068314
535&form=IRPRST&ck=15E822188F2D089F077856AFBDD6EEE9&selectedindex=1&itb=0&ajaxhist=0&a
jaxserp=0&pivotparams=insightsToken
%3Dccid_51qd6MCs*cp_A4720BBB4175EB7E2FC4006DA65D7CDF*mid_E3E1945F27E55AB50BBB173628D5D
F3182BB3947*simid_608046603981753099*thid_OIP.51qd6MCsMIFxxOQMYfZvEAHaFR&vt=0&sim=11&i
ss=VSI&ajaxhist=0&ajaxserp=0
21
8. Reference
https://blog.hubspot.com/marketing/facebook-case-study
https://www.inderscienceonline.com/doi/abs/10.1504/
IJSHC.2013.053268
https://dl.acm.org/doi/abs/10.1145/2212776.2212819
https://www.erudit.org/en/journals/irrodl/2012-v13-n4-
irrodl05105/1066996ar/abstract/
https://www.sciencedirect.com/science/article/pii/S026840121
4000851
https://heinonline.org/hol-cgi-bin/get_pdf.cgi?
handle=hein.journals/berktech28&section=41
https://journals.co.za/doi/abs/10.4102/sajim.v17i1.636
http://www.scielo.org.za/scielo.php?pid=S0038-
23532018000300009&script=sci_arttext
22

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St.

Paul University Philippines

CBME 102 STRATEGIC MANAGEMENT AND TOTAL QUALITY MANAGEMENT

In Partial Fulfilment of the Requirements for the Degree Bachelor

of Science in Hospitality Management and Tourism Management 3A

Submitted to: Dr. Juvie D. Bacani

Facebook: Social Media Dominance And Data Privacy

2.1 General Environment

2.2 Operating Environment

2.3 Internal Environment

4. Alternative Courses of Action

4.1 Data Privacy Breaches

4.2 Anti-Trust Concerns

4.3 Content Moderation Failures

5. Chosen Alternative and implementation

5.1 Improving Data Privacy Practices

5.2 Addressing Anti-trust Concerns

5.3 Improving Content Moderation

5.4 Implementation Plan

5.5 Key Resource and Potential Challenges

Facebook was founded in 2004 by Mark Zuckerberg

and quickly grew from a college social network to a global

phenomenon. By 2012, Facebook had reached 1 billion monthly

users, making it the largest social media platform in the world.

(Carlson, N. 2023) Facebook's user base dwarfs that of other

major social networks like TikTok, Instagram, Twitter, and

Snapchat, and the platform has become an essential utility for

billions of people to communicate, share content, and consume

news and information.

Facebook's explosive growth was fueled by several

key factors, including viral growth and network effects as more

people joined to connect with friends and family, successful

mobile apps that drove adoption on smartphones, strategic

acquisitions of popular apps like Instagram and WhatsApp, and

leveraging user data to provide highly targeted advertising

opportunities. This rapid expansion allowed Facebook to solidify

its position as the dominant social media platform globally.

However, Facebook has also faced numerous

most notably the Cambridge Analytica scandal in 2018, which

raised major concerns about the platform's privacy practices.

moderate the massive amount of content shared on its platform,

including the spread of misinformation, "fake news", and divisive

political content. Additionally, Facebook's market dominance and

acquisitions have raised concerns about stifling competition in

social media, leading to increased regulatory scrutiny and

investigations. These issues have resulted in significant

reputational damage for Facebook, and the company continues to

grapple with these complex challenges as it maintains its

position as the global social media leader.

2.1 General Environment

significant shift in recent years. Users are increasingly

concerned about how their personal information is handled by tech

companies like Facebook. High-profile data privacy scandals, such

as the Cambridge Analytica incident, have eroded trust in the

platform and highlighted the need for greater transparency and

accountability. Moreover, there is a growing emphasis on ethical

technology, with users demanding that companies prioritize values

like privacy, security, and fairness.

Facebook's dominance in the social media market has raised

concerns about competition and innovation. The platform's sheer