Twitter Case Analysis
To the average technologically advanced American, Twitter is one of the most visited social media sites. From a popularity contest standpoint, Twitter would be amongst the top winners; however, when evaluating Twitter from a business analytical aspect it might not be a lucrative business venture.
The attractive attribute to Twitter Inc. is the fact the sites does not make any of its users pay. Twitter is designed to allow users to voice multiple thoughts, ideas, or share different information amongst the site’s visitor.
Unlike Facebook, Twitters does not have multi-million dollar corporations using the site on a regular basis to market more potential users.
Therefore, with a low revenue base and poor strategic development implementation plan it’s going to be hard for Twitter Inc. to grow into a lucrative corporate investment. From a consultant standpoint, many business analyses would characterize Twitter Inc. as a “dog”. A dog is considered to be a man’s best friend, however form a business outlook it could be the indication that a business is in their final stages of existence.
When a product is evaluated as being a dog most business experts would describe the company as have a low or staggered growth rate and yielding no profits.
Twitter has documented that it does not have enough money many times to meet the site’s operation cost. Many experts believe that Twitter needs to expand the company in order to see some financial gain. The only problem with expanding the company is most investors need some form of a positive indicator that they are going to get their money back along with interest. From an explicit view, why should money be invested in Twitter?
Nearly every expert has come to the same conclusion that a social media site is a risky investment. Primarily, this investment is risky because consumer taste change, and social media sites has a previous trend of not being in existence more than five to seven years.
Twitter consumer base is narrow, and the differentiation of the market sector would just add the list of difficulties the company is currently trying to solve. Twitter has been segmented since the creation of the company; they tend to have a consumer base in the age group of 13 to 35 years of age. The age group of 13 to 35 tend to spend the most money, owever this consumer base taste tend to be very inconsistent. Twitter is experiencing a maturity phase. In the maturity phase, there is little growth and the profit margin has reached its highest peak.
If present circumstances are any forecast of the future, Twitter Inc. is in the early portion of the declining stage. In the declining stage there is no growth and the company spread sheet starts to show the company in operating in the red or negative. My recommendation for Twitter is quite simple. Twitter Inc. needs to restructure their company and marketing scheme.
They need to market the site for corporations to think it is worth the investment to advertise. Twitter need to find sponsors to give financial support to a new site design, better advertisement, and also creating partnerships. Twitter Inc. needs to reposition itself to look more like a corporate media site and not a site for teens to release trash gossip. In the segmentation of the market, Twitter should segment the market for mature users and teens. In the segmentation they may have one side that focus on corporate sponsors and the other side should focus on alternative financial support.
Additionally, it would be interesting to experiment with the merging of Twitter, Facebook, and Instagram. All of these social media sites would cover the different segmentation of the market, which would give them the advantages of reaching from the youngest to oldest of users. These social media sites would allow users to upload thoughts, ideas, statements, and pictures to a single site. From a financial standpoint, there would be a large revenue base because of advertisement and sponsors trying to penetrate this lucrative market.
Contrastingly, the only set back is the division of power and how would the profits be allocated in the new company corporate structure.
Twitter has the fundamental basis of being an enjoyable, yet profitable company to own. However, Twitter needs to start making decisions that promotes growth and look to attract corporations to advertise on their site. Its time for Twitter to move on the matrix from a “dog” to a “cash cow”, and they will find there balance sheets doing more than breaking even. The segmentation and differentiation of markets will also help them find various area of potential success.