Facebook, Inc.

, 2015

[Link] BACKGROUND

Headquartered in Menlo Park, California, Facebook is the largest social media network in the world, with
over 1.3 billion current active users of its website. Facebook ended 2014 with record numbers: a total of
890 million users, 745 million daily active mobile users, and $3,851 million in revenue. Facebook’s
revenues from advertising totaled $3.6 billion, and $257 million in collected payments and other fees. The
company spent 29 percent of its revenue dollars on research and development (R&D) in 2014, and spent a
record $1,831 billion on purchasing new property and equipment.
Facebook was founded in February 2004 by Mark Zuckerberg and his Harvard University roommates.
Initially, it was to be used only by Harvard University students, but eventually Zuckerberg and the other
founders gave access to the Ivy League universities and Stanford University. As Facebook grew popular,
user access was given to other universities, as well as Boston area high school students. Today, Facebook
has grown into a phenomenon and anyone over the age of 13 can have access to Facebook, a social media
platform loved by millions.
After launching his initial ([Link]) website, three Harvard University seniors accused
Zuckerberg of taking their idea to create a social network called [Link] to create a
competitive product. After the three individuals made a complaint, an investigation was initiated, and a
lawsuit filed, which was settled in 2008 for 1.2 million shares ($300 million) of Facebook’s IPO offering.
Facebook’s initial big investment was given by the co-founder of PayPal, Peter Thiel. In 2005, the
company bought the domain name [Link] for $200,000 and dropped “the” from the original name.
The investments began to grow as in 2005, as Accel invested $12.7 million and Jim Breyer added $1
million of his own money. Facebook has recently surpassed both Google and Amazon in percent market
share and number of users in the social media industry.

[Link] ANALYSIS
A. EXTERNAL ENVIRONMENT ANALYSIS
A.1. GENERAL ENVIRONMENT (PEST ANALYSIS)

General Environment Opportunities Threats

Political/ Legal  Social media companies are  Threat of legal issues against
meeting with groups who petition firms using fake accounts is
their governments for Internet increasing daily
access and are taking very
different approaches to getting the  The age of users continues to
world connected be an external issue

 New applications which

enable users to comment on
political debates and issues
have caused to the banning of
 the social media platforms.
Economic  Social media companies want to
aggressively help phone
companies build Internet
connections globally
 Social media use and its number of
users is growing exponentially
 Social media companies have been
buying rivals which they think will
give them greater market share and
more profit in the future

Socio-Cultural  Pinning, tweeting, posting,  Issues affecting data privacy,

tagging, texting, liking, and other fake accounts and scams may
social media lingo have become a ruin the name of companies
major part of daily lives, with  many companies have banned
almost two billion people in the employees from using the
world being active users of social social media platforms at
media applications. work
 many persons lose significant
productivity at work by
spending too much time on
social media
 social media users
increasingly feel
commercialized when pop-up
ads cover their computer
screens while surfing social
media platforms
 Approximately 1 of 8
Americans show signs of
having a social media
addiction, which consists of
declining social relationships,
anger and depression when
the Internet is not available
for use, lying about usage,
and experiencing high levels
of happiness when using the
Internet.

Technological  building applications that will  Entry of other competing

accurately measure and target brands with more
digital marketing ads beyond sophisticated applications
the cookie to (1) correct and features
cookies’ inaccuracies in order  digital marketers have
to make right decisions and been constrained to an
marketing strategies increasingly outdated
technology known as the
cookie, which are still
 used to measure and
target digital ads
 Cookies generate poor
approximations of how
many people view a
digital ad and provides
inaccurate estimates of
how many times any
given individual sees an
ad
 Cookies give unreliable
measures of clicks and
sales and are not used on
mobile apps

A.2 INDUSTRY ENVIRONMENT

Functional Areas Strength Weaknesses

Rivalry  Facebook has a significant  The major competitors
advantage in any of Facebook include
competition, given its Instagram, Snapchat,
reported 1.35 billion users LinkedIn, Google+, and
who are active monthly and Twitter.
864 million who use it daily,  Snapchat is a more
compared to LinkedIn’s private medium than
claims of 332 million Facebook, which is why
registered users, but only 90 it’s growing in
million persons visited the popularity
site from July through  Google+ and Twitter
September 2014. compete with Facebook
 Facebook recently surpassed for users and time spent
both Google and Amazon in on social media.
percent market share and
number of users in the social
media industry
 For Facebook, Google,
Yahoo!, Microsoft, and
AOL, the primary revenue
sources are Internet
advertising
 Facebook now also offers a
work-oriented product
similar to LinkedIn and
rivals Microsoft, Google,
and [Link]
 The new service includes
online chatting with
professional colleagues,
which is a serious challenge
to LinkedIn, the leading
 business-oriented social
network.
 The new service comes with
tools to share and store
documents, taking aim at
products and services from
Microsoft, Google, and
[Link].
 Facebook’s wide following
is its main competitive
advantage
Bargaining Power of  Since Facebook is already a  Hacked accounts and fake
Consumers very established firm and a accounts which are used by
global social platform, scammers which victimizes
bargaining power of small other platform users may
businesses owners and lead to legal issues and
entrepreneurs who wanted lawsuits against the
to ask for the lowering of company.
the payment for their
product exposures for them
to receive high volumes of
distribution of their
materials, may not anymore
be significant for Facebook,
while this may not be the
case for big multinational
companies and for bigger
firms which may ask for
discounts from Facebook.
 Facebook launched its
audience network in 2014,
which allowed advertisers to
run their Facebook ads on
third-party mobile
applications. These will
limit the bargaining power
of customers since they will
definitely find platform with
a wider audience network.
 In 2015, Facebook unveiled
its own mobile advertising
distributor, similar to rival
Twitter’s MoPub aimed at
attracting more businesses.
These will limit the
bargaining power of
customers since has already
developed its own mobile
advertising distributor.
Bargaining Power of Suppliers
New Entrants and Entry  Existing social media  Not easy for new entrants to
Barriers platforms are already enter and to maintain its
established and already have platform unless they have a
millions of users worldwide more advanced and
sophisticated than the
existing social platforms
Threats from Product  Limits the threats and  Hacked accounts and fake
Substitution effects of substitution accounts which are used by
through the acquisition of scammers which victimizes
WhatsApp for $19 billion other platform users may
and Instagram whose lead them to transfer to
primary customer base is more private and more
teenagers secured platforms
 Since Facebook has already
started to ask for payment
for product exposures of
entrepreneurs and small
business owners for them to
receive high volumes of
distribution of their
materials, they may tend to
transfer to other platforms
that offers free or cheaper
payment.

B. INTERNAL ENVIRONMENTAL ANALYSIS

B.1 THE FUNCTIONAL AREAS

Functional Areas Strength Weaknesses

Finance  Firm’s net income more  Most Facebook users
than doubled in 2014 obtained free marketing and
advertising of a product or
service by creating posts on
their “wall” to their mass
audience
Marketing  New system was installed  Since Facebook has already
toward the end of 2014 that started to ask for payment
Individuals now wanting to for product exposures of
gain exposure based on free entrepreneurs and small
advertising and marketing business owners for them to
will no longer obtain the receive high volumes of
high-traffic distribution to distribution of their
their page “fans.” materials, they may tend to
transfer to other platforms
 The only way entrepreneurs that offers free or cheaper
and small business owners payment.
can receive high volumes of
 distribution of their
materials is to pay Facebook
for their product service
exposure

 The more money paid by the

individual or business, the
more reach their message
will be distributed.

Another marketing item

Facebook has initiated is
product ads, which show users
pictures of products and prices,
once the user has visited the
specific product’s website,
based on the users’ interests
and/or location
Organization and  “Facebook Personnel” are  Some analysts suggest the
Management expected to act lawfully, organizational structure of
honestly, ethically, and in Facebook is too complex,
the best interests of the with overlapping duties, and
company while performing would prefer to see
duties on behalf of something similar to a
Facebook. strategic business unit
 The company code of (SBU) structure
conduct applies to all
Facebook personnel,
including members of the
board of directors (in
connection with their work
for Facebook), officers, and
employees of Facebook, Inc.
and its corporate affiliates,
as well as contingent
workers (e.g., agency
workers, contractors, and
consultants) and others
working on Facebook’s
behalf
 Spent a record $1,831
billion on purchasing new
property and equipment.
Production
Research and Development  The company spent 29  No means on how to
percent of its revenue determine and minimize
dollars on research and fake accounts
development (R&D) in  lacks research and
2014, in order to improve development in developing
the features of social media other features that will
 platform safeguard the data of users
 New Facebook  high research and
“professional” service development costs
enables users to keep their
personal postings, pictures,
and identity separate from
the professional and work
content
 Facebook-owned Atlas aims
to take digital marketing
beyond the cookie to (1)
correct cookies’
inaccuracies and (2)
discover what’s happening
within the cookieless world
of mobile apps
 Atlas strives to be able to
connect offline purchases
and conversions to digital
ads shown across mobile
apps and the Web
 Facebook’s Atlas is an ad
server that allows ad buyers
to measure, target, and
optimize digital and mobile
ads across digital apps (i.e.,
not just on Facebook)
 Klout has grasped the idea
that society has become
aware of individual brands,
and has made it easier for
human resource managers to
review a potential
employee’s social media
influence. Klout uses Bing,
Facebook, Foursquare,
Google+, Instagram,
LinkedIn, Twitter, and
Wikipedia data to create
Klout user profiles that are
assigned a unique “Klout
Score.”

Information Technology  Hacked accounts and fake

accounts which are used by
scammers that victimizes
other platform users are not
addressed
C. INTERNAL AND EXTERNAL ENVIRONMENT ANALYSIS

STRENGTH:

Facebook has grown into a phenomenon and anyone over the age of 13 can have access
to Facebook, a social media platform loved by millions.

“Facebook Personnel” are expected to act lawfully, honestly, ethically, and in the best
interests of the company while performing duties on behalf of Facebook.

Recently surpassed both Google and Amazon in percent market share and number of
users in the social media industry.

Facebook’s revenues from advertising totaled $3.6 billion, and $257 million in
collected payments and other fees

Firm’s net income more than doubled in 2014

The company’s goodwill more than doubled, partly because Facebook in 2014 acquired
the messaging service WhatsApp for $19 billion

Facebook in 2014 acquired the messaging service WhatsApp for $19 billion

Facebook recently acquired Instagram, whose primary customer base is teenagers.

Instagram is the Web’s leading photo-sharing and video-sharing social media service
and is on pace to top 100 million users in the United States by 2018

Instagram is the Web’s leading photo-sharing and video-sharing social media service
and is on pace to top 100 million users in the United States by 2018

The number of U.S. users of Instagram climbed by nearly 60 percent to 64.2 million in
2014 versus the year-earlier

WEAKNESS:

The company structure is a hybrid, being divisional by region and by product and some
analysts suggest the structure is too complex, with overlapping duties, and would prefer
to see something similar to a strategic business unit (SBU) structure

Overtaken by Google in terms of Digital Display Ad Revenues for three consecutive

years and the gap between its own revenues and Google has been increasing from 2012
to 2014

It is unclear yet whether the new Facebook “professional” service will charge users or be
paid for by advertising.
Unable to maximize its profits in Europe, Asia-Pacific and the rest of the world

More than 10 percent of Facebook accounts are fake.

OPPORTUNITIES:

[Link] is Facebook’s fledgling effort to create new users in countries with little or
low Internet use.

Instagram’s user growth is expected to climb to 21 percent in 2015, 15 percent in 2016,

and 10 percent in 2017, whereas Twitter’s user growth is expected to decline to 9
percent in 2015, 8 percent in 2016, and 7 percent in 2017

Analysts expect that by 2018, Instagram will have 106.2 million users in the United
States, up 7 percent, compared to Twitter, which is projected to have 66 million users
and year-over-year growth of 6 percent.

Facebook has launched apps with basic free services in six countries: Zambia, Ghana,
Kenya, Tanzania, Colombia, and most recently, India. The app is customized for each
country and telecom operator, in order to attract new users while not hurting the
telecoms’ already existing base of customers

Facebook offers free versions of services users already paid for— a primary reason why
[Link] does not include the WhatsApp messaging service

THREATS:

The major competitors of Facebook include Instagram, Snapchat, LinkedIn, Google+,

and Twitter. Snapchat is a more private medium than Facebook, which is why it’s
growing in popularity.

Many companies have banned employees from using Facebook at work

Many persons lose significant productivity at work by spending too much time on
Facebook

Information leaked through employees “communicating” on Facebook could potentially

land in the hands of competitors, causing damage to the business.

Information leaked through employees “communicating” on Facebook could potentially

land in the hands of competitors, causing damage to the business

LinkedIn is gaining users and platform time from Facebook due to the professional
nature of LinkedIn

Google+ and Twitter compete with Facebook for users and time spent on social media.
 Facebook currently has a policy that children age 13 or younger must have parent
consent to create a page on their platform, which parallels with the Children’s Online
Privacy Protection Act (COPPA).

Approximately 1 of 8 Americans show signs of having a social media addiction, which

consists of declining social relationships, anger and depression when the Internet is not
available for use, lying about usage, and experiencing high levels of happiness when
using the Internet. Other characteristics of this addiction consist of waking up in the
middle of the night to check Facebook, checking social media before getting out of bed,
and using social media to cover up everyday life problems.

A new Facebook application enables users to comment on political debates and issues.
Users connecting via the Facebook platform and the company pushing the idea of
political impact caused the Egyptian government to ban Facebook in their country.

CENTRAL PROBLEM:
A. General Statement of the Problem:
Facebook should device ways on how it can sustain profitability, increase its revenue from advertising,
payments and other fees, while continuing its commitment to social and legal responsibility by protecting
the rights of its user’s by developing programs that will improve data privacy.
A.1 Support Evidence of the Problem
1) With regards to the Digital Display Ad Revenues of year 2014, Facebook is considered second from
Google since 2012, and the gap between Facebook and Google has been increasing from 2012 by 1%,
2013 of 2.8%, and 2014 of 5.7%, respectively.
2) Though its net income and its net assets have more than doubled in 2014 as compared to 2013 Balance
Sheet and Income Statement, there is still a need for Facebook to exert more effort to increase its income
from advertising and from payments and other fees, and try to analyze how Google was able to leap its
revenue from advertising from 2012 to 2014.
3) With its aim of expanding globally, its founder and CEO Mark Zuckerberg spent much of early 2015
personally traveling the world, to India, Latin America, Africa, Jakarta, and elsewhere, meeting with
groups who petition their governments for Internet access. He wants to aggressively help phone
companies build Internet connections globally, since, only about half of Facebook’s revenues currently
come from outside the United States and Canada. Internet access will be the gateway for Facebook to
increase its market share and its users, and encourage entrepreneurs and small business owners to
advertise their products through Facebook for their product service exposure.
4) Facebook launched its audience network in 2014, which allowed advertisers to run their Facebook ads
on third-party mobile applications, in order to increase its income from advertising. Then in 2015,
Facebook unveiled its own mobile advertising distributor, similar to rival Twitter’s MoPub aimed at
attracting more business.
3) It was able to adjust its Marketing Strategies which are aimed to increasing its Revenues from
Advertising, through the following:
a) Developing a new system that was installed toward the end of 2014, where individuals now wanting to
gain exposure based on free advertising and marketing will no longer obtain the high-traffic distribution
to their page “fans.” The only way entrepreneurs and small business owners can receive high volumes of
distribution of their materials is to pay Facebook for their product service exposure. The more money paid
by the individual or business, the more reach their message will be distributed.
b) Another marketing item Facebook has initiated is product ads, which show users pictures of products
and prices, once the user has visited the specific product’s website, based on the users’ interests and/or
location. Facebook now also offers a work-oriented product similar to LinkedIn and rivals Microsoft,
Google, and [Link]. The new Facebook “professional” service enables users to keep their
personal postings, pictures, and identity separate from the professional and work content.
c) Development of Facebook-owned Atlas which aims to take digital marketing beyond the cookie to (1)
correct cookies’ inaccuracies and (2) discover what’s happening within the cookieless world of mobile
apps. Atlas strives to be able to connect offline purchases and conversions to digital ads shown across
mobile apps and the Web. In essence, Facebook’s Atlas is an ad server that allows ad buyers to measure,
target, and optimize digital and mobile ads across digital apps (i.e., not just on Facebook).
A.2 Time Context
The time context of the case is 2015 where Facebook was already overtaken by Google in terms of
Digital Display Ad Revenues for three consecutive years and the gap between its own revenues and
Google has been increasing from 2012 to 2014, and there are areas that needs improvement such as
increasing its income outside the United States and Canada, since, only about half of Facebook’s revenues
currently come from Europe, Asia-Pacific and the rest of the world.
A.3 View Point
Based on the case, we will be taking the viewpoint of the founder and CEO of the company, Mark
Zuckerberg, whose main function is to oversee Facebook’s operation and the overall strategic direction of
the company while ensuring the alignment of its company’s mission and vision.

IV. ALTERNATIVE COURSES OF ACTION

QUANTITATIVE STRATEGIC PLANNING MATRIX (QSPM)
Market Penetration:
[Link]-up Existing Facebook platforms by Intensifying advertising and marketing
Market Development:
1. Promote Facebook into new geographical markets, and in other countries
2. Continue helping countries through its initiatives, in improving internet connectivity for it to able to
use Facebook and become its future target markets
Related Diversification
1. Opening hardware business segments for it to have other sources of income and improve its revenues

Key Factors Weight Strategy 1 Strategy 2 Strategy 3

 Building-up Promote Opening
existing Facebook into hardware business
Facebook new segments for it to
platform by geographical have other sources
intensifying markets and in of income and
advertising and other countries improve its
marketing revenues
Rating Score Ratin Score Rating Score
g
Opportunities:
[Link] is Facebook’s .10 2 .20 4 .40 2 .20
fledgling effort to create new
users in countries with little
or low Internet use.
Instagram’s user growth is .15 3 .45 3 .45 2 .30
expected to climb to 21
percent in 2015, 15 percent
in 2016, and 10 percent in
2017, whereas Twitter’s user
growth is expected to decline
to 9 percent in 2015, 8
percent in 2016, and 7
percent in 2017
Analysts expect that by 2018, .12 3 .36 3 .36 2 .24
Instagram will have 106.2
million users in the United
States, up 7 percent,
compared to Twitter, which
is projected to have 66
million users and year-over-
year growth of 6 percent.
Facebook has launched apps .05 2 .10 3 .15 1 .05
with basic free services in six
countries: Zambia, Ghana,
Kenya, Tanzania, Colombia,
and most recently, India. The
app is customized for each
country and telecom
operator, in order to attract
new users while not hurting
the telecoms’ already
existing base of customers
Facebook offers free versions .05 2 .10 3 .15 1 .05
of services users already paid
for— a primary reason why
[Link] does not include
the WhatsApp messaging
service
Threats:
The major competitors of .08 1 .08 1 .08 2 .16
Facebook include Instagram,
Snapchat, LinkedIn,
Google+, and Twitter.
Snapchat is a more private
medium than Facebook,
which is why it’s growing in
popularity.
Many companies have .05 1 .05 1 .05 1 .05
banned employees from
using Facebook at work
Many persons lose .05 1 .05 1 .05 1 .05
significant productivity at
work by spending too much
time on Facebook
Information leaked through .05 1 .05 1 .05 2 .10
employees “communicating”
on Facebook could
potentially land in the hands
of competitors, causing
damage to the business.
LinkedIn is gaining users and .07 1 .07 2 .14 2 .14
platform time from Facebook
due to the professional nature
of LinkedIn
Google+ and Twitter .05 1 .05 3 .15 2 .10
compete with Facebook for
users and time spent on
social media
Facebook currently has a .05 1 .05 1 .05 3 .15
policy that children age 13 or
younger must have parent
consent to create a page on
their platform, which
parallels with the Children’s
Online Privacy Protection
Act (COPPA).
Approximately 1 of 8 .08 2 .16 2 .16 2 .16
Americans show signs of
having a social media
addiction, which consists of
declining social
relationships, anger and
depression when the Internet
is not available for use, lying
about usage, and
experiencing high levels of
happiness when using the
Internet.
A new Facebook application .05 2 .10 1 .05 1 .05
enables users to comment on
political debates and issues.
Users connecting via the
Facebook platform and the
company pushing the idea of
political impact caused the
Egyptian government to ban
Facebook in their country.
Sub-total 1.00 1.87 2.29 1.80
Strengths:
Facebook has grown into a .12 3 .36 4 .48 2 .24
phenomenon and anyone
over the age of 13 can have
access to Facebook, a social
media platform loved by
millions.
“Facebook Personnel” are .05 3 .15 3 .15 3 .15
expected to act lawfully,
honestly, ethically, and in the
best interests of the company
while performing duties on
behalf of Facebook.
Recently surpassed both .08 3 .24 4 .32 1 .08
Google and Amazon in
percent market share and
number of users in the social
media industry.
Facebook’s revenues from .05 3 .15 3 .15 2 .10
advertising totaled $3.6
billion, and $257 million in
collected payments and other
fees
Firm’s net income more than .05 3 .15 4 .20 2 .10
doubled in 2014
The company’s goodwill .08 3 .24 4 .32 2 .16
more than doubled, partly
because Facebook in 2014
acquired the messaging
service WhatsApp for $19
billion
Facebook in 2014 acquired .07 3 .21 4 .28 2 .14
the messaging service
WhatsApp for $19 billion
Facebook recently acquired .07 3 .21 4 .28 2 .14
Instagram, whose primary
customer base is teenagers
Instagram is the Web’s .05 3 .15 4 .20 2 .10
leading photo-sharing and
video-sharing social media
service and is on pace to top
100 million users in the
 United States by 2018
The number of U.S. users of .05 3 .15 4 .20 2 .10
Instagram climbed by nearly
60 percent to 64.2 million in
2014 versus the year-earlier
Weakness:
The company structure is a .05 2 .10 2 .10 2 .10
hybrid, being divisional by
region and by product and
some analysts suggest the
structure is too complex,
with overlapping duties, and
would prefer to see
something similar to a
strategic business unit (SBU)
structure
Overtaken by Google in .12 3 .36 4 .48 1 .12
terms of Digital Display Ad
Revenues for three
consecutive years and the
gap between its own
revenues and Google has
been increasing from 2012 to
2014
It is unclear yet whether the .03 3 .09 2 .06 1 .03
new Facebook “professional”
service will charge users or
be paid for by advertising
Unable to maximize its .08 2 .16 4 .32 1 .16
profits in Europe, Asia-
Pacific and the rest of the
world
More than 10 percent of .05 2 .10 2 .10 1 .05
Facebook accounts are fake.
Sub-total 1.00 2.82 3.64 1.77
Overall Score 4.69 5.93 3.57
Recommendation Facebook should promote its platform through into new markets
and in other countries.
Primary Strategy: Market Development
Secondary Strategy: Market Penetration

Note: 1-Not Attractive; 2-Somewhat attractive;3-Reasonably attractive; 4-Highly attractive

V. Recommendation:
Facebook should select ACAs No. 2 (Market Development), which is to promote its platform into
new geographical markets and in other countries. There is no need for Facebook to do market
development in US and Canada since they are already widely known there. All it must do is to penetrate
into other countries since it only earns half of its income in Europe, Asia-Pacific and other countries
worldwide combined. We can say that the US and Canada is already saturated with the Facebook
platform, it has to go overseas. Mark Zuckerberg has seen the problem that is why he is concentrating by
focusing into other markets outside US. With the marketing strategies that it has installed, such as, (a)
developing a new system that will control the exposure of a business through advertising and marketing;
(b) the product ads, which show users pictures of products and prices, once the user has visited the
specific product’s website, based on the users’ interests and/or location; and (c) development of
Facebook-owned Atlas which aims to take digital marketing beyond the cookie, will definitely increase
Facebook’s revenue, but concentrating into other new markets will definitely give a more robust source of
income. Facebook’s fledgling effort to create new users in countries with little or low Internet use
through [Link]., launching apps with basic free services in six countries: Zambia, Ghana, Kenya,
Tanzania, Colombia, and most recently, India, and customizing the app for each country and telecom
operator, in order to attract new users while not hurting the telecoms’ already existing base of customers,
and offering free versions of services to users, definitely are marketing strategies that it has imposed in
order to increase its revenues and income in Europe, Asia-Pacific and the rest of the world. Facebook
CEO Mark Zuckerberg and Google Vice President Sundar Pichai are planning to collaborate more and are
taking very different approaches to getting the world connected, since this will benefit both companies.
VI. Action Plan

Activities Program Responsible Person Time Budget

Frame
1. Create an Members will be CEO and the Board January to $5,000.00
Innovation chosen by the CEO of Directors February,
Committee and the board. The 2015
committee may
include the heads
of each
department.
2. Planning for a Meeting on how Innovation March, $50,000.00
Feasibility Study feasibility study Committee 2015
will be conducted
for the
implementation of
the market
development
strategy, if there is
a need to hire
additional
personnel for the
feasibility study,
the time and
financial
constraints of the
study.
3. Conduct of After the Innovation April to $500,000.00
Feasibility Study Feasibility Study, Committee June, 2015
and its results will be
Communicating studied thoroughly
the Results to the and submitted to
 CEO and Board the CEO and the
of Directors Board of Directors
for their final
decision and
approval
4. If the Results of Once the result is CEO and Board of July, 2015 $15,000.00
the study is found considered to be Directors
to be Feasible, Feasible, the Board
the Board of Directors and
approved the the CEO, will plan
Product again on how
Development market
Strategy, development will
planning for the be done. Approval
product of the budget for
development will market
follow. development will
soon follow, taking
into consideration
the human
resource, asset
requirements and
the monetary
requirements for
the said strategy
5. Implementation This includes HR Department August to $50,000.00
of the Market hiring of additional /Board of Directors/ December,
Development personnel and CEO 2015
Strategy training based on
the organizational
structure which is
included in the
Feasibility Study,
construction of
office if included
in the plan and
acquisition of
assets in other
countries to
effectively
supervise the
progress of the
market
development
strategy. HR must
ensure that there is
no overlapping of
duties.
6. Conduct After the office has Manager assigned in January $ 3,000,000.00
extensive been established, the area 2016 to
promotional assets acquired March,
 strategies about which will be used 2016
Facebook in the operation,
and personnel have
been hired, it is
now time to start
the extensive
promotion.
Progress must be
monitored by the
manager assigned
in the area and to
study the factors
and take actions on
how to improve its
revenues

7. Monitor the Timely monitor CEO and the Board March 2016 $ 5,000.00
results of the the Market of Directors to present
Market Development
Development Strategy

VII. Projected Financial Performance

Projected Income Statement and Assumptions for the Next 3 Years of Facebook (in millions USD)

2014 2015 2016 2017

Amount Amount % Amount % Amount %
Increase Increase Increase
from from from
2014 2015 2016
Revenues 12,466 16,560 33% 21,698 31% 29,324 35%
Operating Expenses 7,472 8,466 13% 9,543 13% 11,657 12%
EBIT 4,994 8,094 62% 12,155 50% 18,667 54%
Interest Expense 84 95 13% 124 31% 162 31%
EBT 4,910 7,999 63% 12,031 50% 18,505 54%
Tax 1,970 2,103 7% 2,496 17% 2,869 15%
Income from 2,940 5,896 50% 9,535 62% 15,636 64%
continuing operations
Discontinued (15) (45) 300% (67) 49% (98) 46%
operations
Net Income 2,925 5,851 100% 9,468 62% 15,538 64%

Projected Balance Sheet for the Next 3 Years of Facebook (in millions USD)

2014 2015 2016 2017

Amount Amount Amount Amount
 Assets
Current Assets
Cash and Cash Equivalents 11,199 13,456 16,659 18,654
Accounts Receivable 1,678 3,845 4,234 6,654
Other Current Assets 793 1,107 2,243 4,355
Total current assets 13,670 18,408 23,439 29,663
Property Plant and Equipment 3,967 6,567 10,890 13,760
Goodwill 17,980 21,524 22,675 25,794
Intangible Assets 3,929 5,104 6,560 9,960
Other Assets 638 1,190 2,789 3,367
Total assets 40,184 52,793 66,050 82,544
Liabilities
Current Liabilities
Short-term debt 180 1,953 2,740 3,356
Accounts payable 378 945 1,550 890
Other Current Liabilities 866 2,080 2,897 1,768
Total Current liabilities 1,424 4,978 7,187 6,014
Long Term Debt 119 960 1,680 1,590
Other liabilities 2,545 4,908 5,768 7,987
Total Liabilities 4,088 10,846 14,635 15,591
Equity
Common Stock 0 0 0 0
Retained Earnings 6,099 11,950 21,418 36,956
Paid in capital and Other 29,997 29,997 29,997 29,997

Total Equity 36,097 41,94 51,415 66,953

7
Total liabilities and Equity 40,184 52,793 66,050 82,544

Projected Ratio Analysis

2014 2015 2016 2017

[Link] Ratios
Current Ratio 9.60 3.64 3.26 4.93
Quick Ratio 9.04 3.48 2.95 4.21
Cash Ratio 7.86 2.70 2.32 3.10
2. Leverage Ratios
Debt Ratio 10.17% 20.54% 22.16% 18.89%
Debt to Equity Ratio 11.33% 25.85% 28.46% 23.29%
3. Asset Utilization Ratio
Asset Turnover Ratio .35 .36 .39
Return on Asset 7.28% 11.08% 14.33% 18.82%
4. Profitability Ratio
Net Profit Margin Ratio 23.46% 35.33% 43.63% 52.98%