1.

0 Strategic Profile and Case Analysis Purpose

Twitter started in 2006 when the podcasting company Odeo realized they needed to reinvent
themselves and began brainstorming new creative ideas. Twitter is a free social
networking micro blogging service that allows registered members to broadcast short posts
called tweets. Twitter members can broadcast tweets and follow other users' tweets by using
multiple platforms and devices. Tweets and replies to tweets can be sent by cell phone text
message, desktop client or by posting at the Twitter.com website.

In laymen's terms, Twitter is a website for sharing what you are doing at any given moment
with other people online. In a more complicated term, Twitter is a powerful social networking
tool for both business and personal uses. Twitter uses "tweets," which are 140-character
(maximum) messages you post to your Twitter profile. The restriction on length is one of the
features that makes Twitter unique compared with other social networking sites.

Regarding to our assignment, we will inspect the Twitters strategies used through the
situation such as analysis of general environment, industry, competitor and interior of Twitter.
Besides, SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis of Twitter will
be conducted in our assignment as well. These studies are strategic management tool which
supports manager to create more resourceful ideas and make better decisions. Hence, Twitter
only can build its competitive advantage and achieve above average returns if Twitter may
successfully comprehend these analysis.

Furthermore, the purpose of doing these analysis is for the Twitter to mitigate the issues that
faced by Twitter lately. Based on these studies, Twitter may offer those related business
strategies to cope with its problem. In addition, Twitter can through these researches to
further improve its competitive advantages to compete with other rivals. Therefore, strategy
formulation (include of strategic alternatives, alternative evaluation and alternative choice)
and strategic alternative implementation (include of action items and action plan) must be
went through in order to adopt strategies more smoothly.

2.0 Situation Analysis

2.1 General Environment Analysis
Before we can form our vision and mission for the company, we need to do the external
environment analysis such as general environment analysis, industry environment analysis
and competitor analysis. By referring to lecturing slide, a general environment refer to an
industry and the firms within it being influence by the broader society dimensions. Besides,
this general environment had an indirect influence towards the firms within the industry. In
general environment analysis, we need to analyse general environment trends, which refer to
the seven dimensions or environmental segment, when studied or analysed, these information
will provide us a valuable insights. Besides, these trends need to be evaluated for their impact
on the firms strategy and on the industry in which it competes in order to achieve the
strategic competitiveness.
2.1.1. Demographic
Demographic refer to the populations size, age structure, geographic distribution, ethnic mix,
income distribution. Normally, this dimension will be analysed on a global basis because of
their potential effects across countries borders and global markets. According to Pew
Research Center, the demographic of social media users showed that there are 72% of online
American adults use Facebook, but there are only 23% of all online adults use Twitter. From
this indication, therefore, Twitter need to provide a superior value to its customer than what
had provided by its competitor, which is Facebook. So, Twitter had added and improve the
features of its products to satisfied customers needs effectively and able to gain competitive
advantage over its competitor. Besides, the research also showed that women will be the users
that spend more time on social networking site if compared with men. From this indication,
Twitter had added new features to its products, such as Rich Site Summary (RSS), which is to
delivery regularly change web content and this will enable users easily keep themselves up to
date with the latest information or trend. For example, fashion website is the favourite
website for majority of female, with the features of RSS, female will be able to access to the
latest fashion trend or information effectively and efficiently, so that this will help to gain the
recognition from majority of the female and make Twitter become more competitive.
2.1.2. Economic
This segment refers to the nature and direction of the economy in which a firm competes or
may compete. Generally, a firm will choose to compete in a relatively stable economies with

strong growth potential. There is a strong intensity of rivalry among Twitter and Google or
Facebook, all of these social networking site are competing in America, which is a country
with a relatively stable economies and have a strong growth potential. Twitter was founded
by Evan Williams, who was an American. Besides, Facebook was founded by Mark Elliot
Zuckerberg, who was an American also. Furthermore, Google was founded by Lawrence
Larry Page, who was an American also. These indicate that these social networking site
was being founded and used in American at first, the founder choose to compete with their
competitor in American is mainly because the economies in there consider stable and have a
potential to growth.
2.1.3. Political / Legal
This segment refers to the arena in which organizations and interest groups compete for
attention, resources and a voice in overseeing the body of laws and regulations guiding
interactions among nations as well as between firms and various local government agencies.
Besides, this segment also represent how a firm and government mutually try to influence
each other. Twitter being cited as being influential factor in socio-political events such as
Senator Barack Obamas U.S. presidential campaign. Some other examples are Twitter being
used in a political protests in Iran, and the uprising in Egypt and Algeria in 2011. These
indicate that social networking site and social media is increasingly important and play an
important role in political area. Besides, it can be used as a forum for political activism. For
example, Twitter gained in usage during the 2008 U.S. presidential campaign and cited as a
key tool during the 2008 attacks in Mumbai, India. Moreover, during Iranian presidential
election, Twitter was used by protesters as a tool, participants relied on the service to
coordinate their movements and to send message to the world outside Iran.
2.1.4. Socio-cultural
This segment is concerned with a societys attitudes and cultural values. This is because
attitudes and values form the cornerstone of a society, and they often drive demographic,
economic, political/legal, and technological conditions and changes. Peoples socio-cultural
value will change from time to time. In the era of technology, people such as adult are more
often to share their photos, express their feeling as well as information through a social
networking site. Therefore, this had led to an increase in the used of social networking site
such as Google, Facebook, Twitter or other relevant social networking site that is applicable.
Besides, organization also began to take note of Twitters potential to reach out a more

technologically savvy audience. This is because with Twitter, it provide or allow small
organization update to a growing list of followers. On the other hand, in larger organization, it
allows managers to update and coordinate groups of employees.
2.1.5. Technological
This segment includes the institutions and activities involved with creating new knowledge
and translating that knowledge into new outputs, products, processes and materials. Given the
rapid pace of technological change and risk of disruption, it is vital for a firm to study and
have a better understanding on this segment. Twitter is an easy-to-use, micro-blogging
application, instant messenger or social presence notifier. Nowadays, the demand of
customers for technological products and services are increasingly important. Besides,
Twitter is also a kind of social networking site which is built on as an open source software.
Therefore, the demand of customers towards Twitter also show a significant increase in the
number of users. Furthermore, in order to satisfied the customers needs effectively, Twitter
had update their current technology and added new features to its products such as RSS feeds
and integration with IM, so this can help Twitter to remain competitive in this industry or
market.
2.1.6. Global
This segment include relevant new global markets, existing markets that are changing,
important international political events and critical cultural and institutional characteristics of
global market. Twitter being cited as one of the hottest technology companies since Google
and Facebook, and during the Iranian presidential election, protesters were use the service of
Twitter to manage their actions and to deliver message to the people outside the Iran. As a
conclusion, Twitter is gradually play an important role in political area either local or global
especially in the political instability country.
2.1.7. Physical
This segment refers to the potential and actual changes in the physical environment and
business practices that are intended to positively respond to and deal with those changes.
Besides, it also concerned with trends oriented to sustaining the worlds physical
environment, firm recognise that ecological, social, and economic systems interactively
influence what happens in this particular segment. Nowadays, there is a lot of changes in
customers needs and expectations such as changes in socio-cultural trend, technological

trend, demographic trend, and political trend. Therefore, in order to satisfied these customers
needs, Twitter keep update or improve their current technology, provide or add new features
to its products. Besides, Twitter also tried to satisfied customers needs in different ways,
such as provide the features that are differed from Facebook. So that, Twitter can be more
competitive and gain a large number of market share in this particular market.

2.2 Industry Environment Analysis

Once we analyse the general environment, we need to study their impact on industry. We
need to analyse industry environment is because the same trend or segment in general
environment may have different impact to the industry. An industry refer to a group of firms
producing products that are close substitutes. In compare to general environment, this
industry environment will have a more direct influence on a firms strategic competitiveness
and its ability to earn an above-average return. It is important for a firm to analyse its industry
environment and the five competitive forces carefully, because these will affect the strategy
used by the firm. Besides, an industrys profit potential is a function of the five forces of
competition such as threat of new entrants, bargaining power of suppliers, bargaining power
of buyers, threat of substitute products, and the intensity of rivalry among competitors, which
also known as Porters five forces competition model.
2.2.1. Threat of New Entrants
New entrants can threaten market share of existing competitors and it may affect the sales or
profit of existing competitors. However, it may bring additional production capacity towards
the market or industry it goes into. Threat of new entrant in technology industries is low
because it needs a huge amount of capital or cost to invest in research and development
activities, so that a firm can produce the products or provide the services that effectively
addressed or satisfied customers unique needs and expectation. Besides, there is a high cost
needed to be incurred by the firm to start-up in technology business such as Twitter, Google,
and Facebook. Furthermore, Twitter allowed users to disseminate information to other in realtime and send tweets of 140 characters or less to their followers. On the other hand,
Facebook allowed its users to share photos and videos, update their post or status, and other.
This make Twitter become more unique and meet customers need, it also gained the
recognition and users brand loyalty. In conclusion, threat of new entrants in this industry is
low.
2.2.2 Bargaining Power of Suppliers
Bargaining power of suppliers is powerful when there are few large companies and more
concentrated than the industry to which they sell, where there are no substitutes, and where
industry firms are not significant customers to supplier group. In Twitter case, the bargaining
power of suppliers in this industry consider low. This is because Twitters investors injected a
total of $155 million to Twitter in 2009. Some of the investors included Institutional Venture

Partners, Benchmarks Capital, Union Square Ventures, Spark Capital, Digital Garage, Bezos
Expeditions and Insight Venture Partners, and others. In December 2010, another $200
million of capital was injected into Twitter. Besides, in 2008, Facebook planned to purchase
Twitter with $500 million of Facebook stock but this offered was rejected my Twitter
management team. This indication showed that power of supplier is low and Twitter has more
power to reject and able to continuing improve their products and services provided to their
customers without any restriction from the suppliers.
2.2.3 Bargaining Power of Buyers
Bargaining power of buyers is powerful when the buyers purchase large portion of industrys
total output and the switching cost to other industry product is relatively low. In Twitter case,
the bargaining power of buyers in this industry consider high. This is because others social
networking site such as Facebook, Whatapps, Wechat, Instagram, and Google are also
provided similar features such as sharing video, and photos, view the latest news and
information with Twitter to their customers. Therefore, the switching cost for users to use
other social networking site is relatively low to Twitter, the possibility of switching to other
social networking site is high because all these application can be downloaded for free, it also
consider easy to use and understand.
2.2.4 Threat of Substitute Products
Threat of substitute products arise when goods or services outside of given industry perform
same or similar functions at a competitive price or cost. In Twitter case, the threat of
substitute product is low. For Twitter, its close substitute products will be the traditional ways
of text message and calls from communication devices, and with a paid for what we had text
or call. In the era of technology, majority of the people will not use the traditional ways to
communicate with others; instead, they use the social networking application such as Twitter,
Whatapps, Google and Line. With all this social networking application, users can text or call
without any payment, but just need to paid for the connection to mobile devices such as wifi.
2.2.5 Intensity of Rivalry among Competitors
In Twitter case, the intensity of rivalry among competitors is high. This is because there is
low even no switching cost for users to use any of these social networking application such as
Facebook, Google, Line, Wechat, WhatsApp, and Instagram. Besides, all these social
networking application are providing the similar functions and features to their users. So

when a particular social networking application cannot satisfy the needs of user, the user can
easily switching to other application without a switching cost. In order to retain the existing
market share, Twitter needs to focus on satisfying their current users and continue improve
their products to meet the needs of new users in the market. As a result, Twitter can only
remain competitive in this industry to compete over its competitors.

2.3 Competitor Analysis

Competitor analysis is also another area that we need to study and analyse carefully, this is
because from this analysis we can know who are our direct or indirect competitors, collect the
competitive intelligence, and have a better understanding about what are the objectives,
strategies, assumptions, and capabilities of our competitors, so that we can take the correct
competitive action and competitive response towards our competitors. Besides, there are two
components that commonly used to assess whether that particular competitors is our direct or
indirect competitors which comprise market commonality and resource similarity.
2.3.1 Market Commonality
Market commonality concerned with the number of market with which the firm and a
competitor are jointly involved and the degree of importance of the individual markets to
each. For Twitter case, it is a social networking application that focus on allowed user to
update, sharing their photos, expressing their feeling, view the latest news, and others.
Besides, Twitter was used by 32% of internet users who age between 18-29 years old, follow
by 29% of internet users who age between 30-49 years old, Age between 50-64 years old
represent the 13% of the internet users, lastly, 6% of internet users belong to users who age
65 years old and above.
However, Facebook is also a social networking application that provide its users to upload
and share their photos and video, updates and view the latest news, and posted the status on
Facebook. Besides, Facebook demographic show that its main users are between 18-29 years
old, represent 82% of internet users, follow by 79% of internet users who age between 30-49
years old, 64% of internet users who age between 50-64 years old, lastly, 48% of internet
users who age 65 years old and above.
Furthermore, in 2010, Google launched a Twitter competitor called Google Buzz, the
functions and features of Google Buzz is quite similar to what that Twitter had provide to
its users, which allowed its users to post updates in real time by using mobile phones. Google
earned a huge income from selling the advertising and made no money from Google Buzz.
In conclusion, Twitter, Facebook and Google are consider as relatively high in market
commonality.

2.3.2 Resource Similarity

Resource similarity is the extent to which firms tangible or intangible resources are
comparable to competitors in type and amount. For Twitter case, it allowed its users to
connect or log in through PC or mobile devices. Besides, Twitter also aimed to expand its
existing market share by increasing the number of users, make Twitter become more friendly
and easy to used and accepted by local and global users.
However, Facebook launched many features such as allow it users to have a closer integration
with other websites and producers of applications that run via Facebook. Besides, Facebook
allowed its users to connect through PC or mobile devices, it is similar to Twitter which also
allowed its users to connect through PC and mobile devices. Furthermore, Facebook also able
to connect people that not only locally but globally as well with one billion active monthly
users.
Moreover, Googles mission is to organise the worlds information and make it universal
accessible and useful. From the statement above, Google aim is let everyone at every country
to be able to access to it and get the latest information as soon as possible. Besides, Google
also allowed its users to connect via PC or mobile devices, this feature is similar to Twitter
and Facebook mentioned in above.
In conclusion, Twitter, Facebook, and Google are consider as relatively high in resource
similarity.
After study and analyse the competitor by using the market commonality and resource
similarity, it shows that Twitter, Facebook, and Google, are high in both market commonality
and resource similarity, this mean that Facebook and Google are consider direct and mutually
acknowledge competitors to Twitter. After done the competitor analysis, Twitter already
know who are the direct competitors to them, therefore Twitter need to collect the
competitive intelligence about Facebook and Google. Besides, Twitter need to get the
information about Facebook and Google through an ethical ways such as attend trade fair and
shows, collect brochures, view exhibits, or listen to their discussions. After having better
understanding about Facebook and Google, Twitter can plan the necessary competitive
actions or competitive response to or when being attack by Facebook and Google.

2.4 Internal Analysis

Internal analysis is to analyse and study the strength and weaknesses of the firm itself. In
order to do an effective internal analysis, the firm need to have the ability to study an internal
environment of the firm in ways that do not depend on the assumptions of a single country,
culture, or context. Besides, the firm also need to analyse firms portfolio of resources and
bundle heterogeneous resources and capabilities. Furthermore, in internal analysis, it
normally involves identifying, developing, deploying and protecting firms resources,
capabilities and core competencies. For Twitter, it needs to analyse its basic resources, bundle
all these resources to create organizational capabilities to achieve specific task or set of tasks,
then fully utilise the capabilities that serve as a source of competitive advantage for Twitter
over its rival, and this will help to distinguish Twitter from its competitors such as Facebook
and Google. Moreover, Twitter also need to expand its strength, at the same time, it also need
to reduce or eliminate its weaknesses so that it only can perform the strategies effectively and
at the end satisfy the need of targeted users as well as achieve the profit maximization.
2.4.1 Advantages
Twitter being cited as an influential factor in socio-political events, for example, Senator
Barack Obamas U.S. presidential campaign, the political protests in Iran, where Iranian
participants relied on Twitter service to coordinate their movements and send message to the
world. Besides, Twitter offers an option of integrating other applications via an application
programming interface (API). An application programming interface allow third-party
software developers to build programs to interface with Twitters data. Furthermore, Twitter
added new features to its product such as RSS feeds and integration with IM, with these new
features, the number of users and usage per user. Moreover, Twitter allows anyone to sign up
and log into Twitter to view any public tweets they like, this features is different from
Facebook. Twitter also commences to promote a Follower Milestone. The function of
Follower Milestone is to help to increase users followers on Twitter. This is a good strategy
for a campaign when users are nearing a landmark figure on Twitter. Users can set a follower
target for example '1000 Followers' and ask people to Tweet them guessing the time and date
they will reach this milestone. With all these new features and strength, Twitter had
successfully gained the public recognition and increasing the number of users worldwide.

2.4.2 Disadvantages
On the other hand, many Twitters users face the privacy and confidential issues, this is
because Twitter allow its users to freely sign up then log into Twitter and view all public
tweet or information they want. This make its users feel unsecure while using Twitter,
because they will feel like sharing their own personal information with third parties. Besides,
this will cause the online fraud cases to increase because of lack of personal privacy that
offered by Twitter. Furthermore, another weaknesses of Twitter is that Twitter still remain
essentially text-based and allow its subscribers to send tweets of 140 characters or less to
their followers. This is because some of the users may not be able to express their feeling
or view point within 140 characters. As a result, Twitter had a lot of dead or not active
subscribers, this is because they are not able to connect and adapt to the philosophy of
express their feeling within 140 characters.

3.0 SWOT Analysis

3.1 Strength
3.1.1 Global presence
Twitter has gained usage during the U.S presidential campaign and was cited Twitter as a tool
during the attack in Mumbai, India during 2008. This is because during the attack Twitter
provides system which can allow users to keep on updating the latest news and information
on the crisis to friends and people around the world.

Other than that, during Iranian

presidential election, protesters also used Twitter as a tool to manage their movements and to
deliver message to the world outside Iran. Besides that, twitter continued to play important
role in politically. For instance, during the Arab Spring uprisings in early 2011 in Tunisia and
Egypt, Twitter offers the clearest evidence where people engage in democratic conversations
were located. For example, the organizations using social media to spread words or videos
which President Zine El Abidine Ben Alis wife using a government jet to have shopping trips
in Europe.
3.1.2 Strong research and development
In order to satisfied customers needs, Twitter keep on updating or improving their current
technology and provide new features to its products. Twitter built on open source software
which allows users to transmit short information to friends and strangers in real time. Other
than that, Twitter started to release new version of technology for free in order to grow user
numbers steadily. Furthermore, Twitter has strong research and development which works on
new public demand, designs and technological of the system. For example, users can tweet
through Really Simple Syndication feeds and integration with Instant Messaging.
3.1.3 Strong rapid growth
With just a handful employees and small amount of venture capital, Twitter had started to
release new versions of technology for free in order to catch more user attention. Less than 4
years after its started, company had not yet generate any revenue and was not close to
turning a profit. After the several years, Twitter begin to growth more users in mid-2009 and
its keep on rising from 29 million to nearly 200 million by March 2011.

3.2 Weaknesses
3.2.1 Limited character messages
Twitter is a micro-blogging service which only allows users to disseminate message to others
by limiting on sending tweets of 140 characters or less to their followers which cause the
users not be able to fully express their expressions or view point within 140 characters.
3.2.2 Privacy and confidential issues
Twitter allow any users to sign up and log into Twitter and view all public tweet or
information they want. This will cause users to feel unsecure as they feel like sharing
personal information with third parties. This open source also can cause the online fraud
cases to increase as the lack of personal privacy that offered by Twitter. Other than that,
during the politically or those country under attack, some users has giving false information
or reports to the public which can cause the chaotic of the city. Furthermore, it can also allow
the terrorists to track the movements of law enforcement which giving them more easy way
to attack as they had handful of information and details.
3.2.3 Not a strong brand like Facebook
Twitter could not build it presence other known brand like Facebook as Facebook has a
secure system which users only can communicate with each other only by mutual consent
while Twitter allow anyone who log in and view public tweets they like which private data
has been violated. On the other hand, Facebook allow users to exchange videos and photos,
whereas Twitter remains essentially text-based.

3.3 Opportunities
3.3.1 Partnership with organization
Organizations began to notice of Twitters potential to reach out to a more technologically
savvy audience. The service was especially valuable to small companies, with limited
budgets, looking to gain recognition in the marketplace. With Twitter, these small firms could
reach out and provide updates to a growing list of followers. Within larger organizations,
there was the potential for managers to update and coordinate groups of employees. Twitter
may also become the dominant way for businesses to communicate with their customers. The
organizations can connect with their customers with unparalleled reach and amplification
through one-to-one-to-many interactions. By delighting the customers on Twitter can give an
outsized impact to the companies because the conversations are open for the world to see, can
be shared across the platform and embedded across other media. In addition, the companies
can have a real-time conversation with the customers to help resolving issues while
demonstrating their brand voice. Interactions on Twitter improve the companies ability to
deliver exceptional customer service efficiently. They can respond to the customers more
rapidly.
3.3.2 Expand option in the application
Twitter should add more features to improve the social functions. On April 2010, Twitter
would launch promoted tweets which allow the advertisers to insert themselves in the
stream of real-time conversations on Twitter, based on their relevance to the subject matter
being discussed. Several companies signed up to advertise in this way such as Best Buy,
Starbucks and Bravo. Tweets are embeddable in a similar way as YouTube video, so Twitter
can let the users to upload the videos to Twitter instead of YouTube. This can help Twitter to
steal market shares and advertising revenue from YouTube.
Other than that, Twitter can improve its search engine to enable the users to find the
information in a more effective and efficient way. It is more real-time than Google and it will
be more advantageous than Google.
Twitter should go beyond the 140-character limit for tweets. Public tweets are currently
limited to 140 characters because of Twitters heritage that Twitter was launched as a mobile
service that made heavily use of phone text messaging, it had to stay below the SMS limit of
160 characters. Twitter should extend the tweet limit and allow the users to publish longer

entries. Even with a new tweet limit, the Twitter timeline may still look the same as the new
feature can apparently hide extended text entries behind a kind of read more link to keep
tweets short in the timeline.
3.3.3 To revolutionize email
Twitter can scale down the communication overload by restricting the messages to certain
characters through new email programme. It can enable some conversations become more
public and more social. The new email programme should be created to be linked to the
Twitter account. Over time, Twitter can make email become much more social and more
efficient. The length limit on messages is long enough to express most coherent points or ask
a colleague a question while filtering out much spam, newsletters, promotions and
dissertations. The new email programme not only uses Twitter handles to help people claim
their addresses but also gives them the access to a website with a basic interface to contact
other users.
3.3.4 E-commerce
E-commerce could be able to create more opportunities for companies. Sellers and buyers
could use Twitter as a platform to deal with each other. As Twitter was getting much more
trustworthy, whereby sellers and buyers would feel safety when sell and buy through Twitter.
E-commerce navigation and payments will play an important role in Twitter monetization.
Twitter also can help to develop filters to help users to manage their tweet streams and
classify them into different categories.

3.4 Threats
3.4.1 Friendfeed and Identi.ca may grow and steal the market share
Competitors started to emerge and offering functionality that was unavailable from Twitter.
Friendfeed allowed users to send text messages as well as import information from their
blogs, Flickr photos and YouTube videos. Identi.ca, another micro-blogging service, made its
source code freely available, allowing users to create their own micro-blogging service. As
long as they provide some services and features that are unavailable from Twitter, the users
may switch to them.
3.4.2 Facebook has twice as Twitters users and may get even more tweety to compete
face-to-face with Twitter
In an attempt to win market share in this growing space, larger, more established companies
have rolled out free services as well. In 2008, Facebook attempted to purchase Twitter for
$500 million in Facebook stock, but being rejected. After this, Facebook introduced several
Twitter-like changes to its service, including updating users home pages to allow them to
provide real-time updates to friends. Facebook also give more visibility to its pages for
celebrities and other high-profile figures thus lifted the ceiling on the maximum number of
online fans they could have on the site.
3.4.3 Instagram recently surpassed Twitters user base
Recently, Instagram has a user base with more than 300 million monthly active users
worldwide against Twitters 284 million. Instagrams growing popularity can be assessed by
the massive 70 million photos and videos shared on the platform every day. In an attempt to
prevent the accounts of celebrities from being hacked, Instagram recently launched the
system of granting verified badges to these accounts just like Twitter. Instagrams user base
has exhibited a growth rate of more than 50 % whereas Twitter has been plagued by the
persistent problem of a slowdown in its user growth rate.

4.0 Strategy Formulation

4.1 Strategies Alternatives & Alternative Evaluation
Strategy plays an important role in the business world for companies as one of several
determinants for a company to be successful. Strategy is an integrated and coordinated set of
commitments and actions designed to exploit core competencies and gain a competitive
advantages. The main objective of strategy is to create a competitive advantage and use it to
achieve above average returns. Strategy can be diversified into two categories, namely
business level strategies and corporate level strategies.
As we see from the case and the analysis from above, several recommendations were made to
Twitter to remain its competitiveness in the industry, and expands its market share in the
industry.
4.1.1 Differentiation
By looking at the SWOT of Twitter, one of the strengths Twitter has is a strong research and
development. Therefore, Twitter is able to produce differentiated products or services in order
to compete with other competitors. To differentiation a product or service, Twitter has to use
their knowledge or specialization to create more unique features in their product. Twitter
must target broad scope and provides good quality of products and services. Besides, in order
to implement differentiation strategy, Twitter must have a thorough understanding of what the
needs of the customers. Innovation of the product and consistently upgrade the differentiated
features is the core of differentiation strategy. Differentiation strategy can increase the loyalty
of the customers to the product and the sensitivity will become lesser. Therefore bargaining
power of customers will decrease and put Twitter in a better position. Differentiation strategy
also can help Twitter to compete with other competitors. It also can prevent others to imitate
Twitter features. This is because differentiation can gain customers confident and increase the
brand of Twitter. However, there are disadvantages and risks that Twitter has to take care if
Twitter implements differentiation strategy. Nowadays, there are many apps are trying to
compete with Twitter. Some people may hear about Twitter, but may not try to use Twitter
before. Some of them are used to with their current apps, so that the experience of the
customer can narrow customers perception. This will result Twitter in losing potential
customers.
4.1.2 Acquisition

Under the weaknesses, we found that Twitter is not strong as Facebook brand. Nowadays,
Facebook is trying to build a strong market power by using acquisition. Therefore, the other
method that I would like to propose to Twitter is to use acquisition for their business strategy.
Twitter can buy a controlling of the other small companies. By using this strategy, Twitter can
increase their market power and the market power exists when Twitter is able to sell its
product above competitive levels. If Twitter achieves enough market power, it can become a
market leader. If Twitter wants to develop new products internally and successfully, time of
the payback and the resources needed in order to develop the new product are the main
concerns. By using acquisition, Twitter can save the time and resources and lower the risk
compared to developing new products. Acquisition through other kind of business also can
gain capabilities that Twitter does not possess. Therefore, Twitter can gain some extra
knowledge and share with each other, so that Twitter and its subsidiaries can improve or
enhance their products. However, there are some problems in achieving acquisition success
for Twitter. If Twitter takes over a company that is larger than Twitter, it might not have the
ability to run and control the company.
4.1.3 Strategic Alliance
According to the SWOT analysis of Twitter, one of the weaknesses it has is lower brand
identification than other competitors such as Facebook. Therefore, I recommend Twitter to
conduct strategic alliance with other companies in order to improve its brand name and
increase market share. Twitter could share its resources or capabilities with others for the
purpose of creating a competitive advantage. Twitter may cooperate with educational
institutions to help commercialize ideas flowing from basic research projects completed at
universities. According to historical data, alliances can increase firms sales revenue up to 25
percent, in for-profit organizations, many executives believe that strategic alliances are
essential to increase firms growth and lead to success. Twitter may also face the problem of
lack of full set resources and capabilities to reach its objective, so through strategic alliance,
Twitter may share other firms resources and capabilities that Twitter does not have in order
to achieve its objective. In summary, strategic alliance allow firms to gain new knowledge
and experiences to increase competitiveness and create avenue for firm to gain access to
resources. However, strategic alliance has its own risks, one of the risks is that firm may act
in a way that its partner thinks is opportunistic. Not only that, strategic alliance may fail due
to a firm has misrepresented the competencies it can bring to the partnership. A firm fails to

use its partners resource and capabilities is also one of the risk. Lastly, one firm may make
investments that are specific to the alliance while its partner dose not.
4.1.4 Diversification
Based on the strength of Twitter, we found that Twitter has a strong research and development
basis and also strong rapid growth, so we recommend that Twitter could diversify its
business. Because Twitter has a strong foundation, it is easier for Twitter to develop another
related business in order to gain market share to competitors. Other than that, due to strong
rapid growth, which means Twitter business is constantly growing, so Twitter may consider
to expand its business to maximize profit and shareholders wealth. Typically, a
diversification strategy is used to increase the firms value by improving its overall
performance.

4.2 Alternative Choice

After discussed, our group thinks that strategic alliances is our ultimate choice for the
proposal strategy. This is because strategic alliance strategy provides Twitter the best
opportunities to expand its business. By using strategic alliances with other companies,
Twitter can share other company's resources and capabilities that it does not have in order to
achieve its objectives. Twitter may cooperate with educational institutions as young
generation usually could generate more innovative ideas that may be helpful for Twitter in
increasing its competitiveness. Through strategic alliance, Twitter also can enhance the speed
of responding to market opportunities, technological changes, and global conditions that
result in strengthening its brand name and increase its competitiveness.
Differentiation is too risky for Twitter because competitors will always try to imitate their
product features. Besides, economic situation is not really performed well in this few years; it
is not a good timing for Twitter to conduct acquisition now. It is because in order to conduct
an acquisition, Twitter needs a lot of funds and resources. Therefore, Twitter is suggested to
be more conservative and manage their funds prudently.
Although Twitter has a strong research and development basis and also strong rapid growth,
the market share of Twitter in Malaysia is still considered as low, because some of its
competitors has occupied most of the market share in Malaysia such as Facebook. Which
means its business is still not mature enough. So diversification is not suitable for Twitter to
adopt.
In summary, we think that Twitter should adopt strategic alliances is because the more friends
(strategic alliances) you make, the fewer enemies (competitors) you have. By conducting
strategic alliances, we can turn our competitors into our partners; this is a win-win situation.

5.0 Strategic Alternative Implementation

Based on the strategy formulation plan, strategic alliance is the option for the proposal
strategy. This is because strategic alliance provides Twitter the best opportunity to expand its
business by sharing resources, capabilities and core competencies to achieve its objective.
In order to achieve this strategic alliance, there are a few action item needed for the action
plan which are ethical of the corporate governance and mechanism, using functional structure
with differentiation strategy, global strategy, external labor market and entrepreneur
opportunity.
5.1 Action Items
Corporate governance is set to be the cornerstone of the every company. Each and every
company has different set of values and core competency due to the corporate governance.
Hence, for Twitter to have good and ethical corporate governance, first we have to change the
culture of the company.
After regulating the corporate governance, strategy is needed to be implemented which is
strategic alliance. In order to implement strategic alliance, Twitter is required to use certain
structure and strategy so that it will be align with the strategic alliance.
After re-structuring the company, then Twitter can began to implement the global strategy so
that it will be centralized decision making and produce standardized product.
Then, for further growth of the company, Twitter need to have strong management team and
limitless entrepreneur opportunity. Firstly, in order to have a strong management team,
Twitter has to use external labor market so that has expertise in various fields.
Lastly, entrepreneur opportunity can be obtain through intervention, imitation and innovation.
This opportunity arises from the main strategy which is the strategic alliance. Using the core
competencies and sharing of resources, Twitter are able to outlearn the competitors and create
a differentiation product which can be used as a part of revenue model.

5.2 Action plan

The definition of the corporate governance is the set of mechanisms used to manage the
relationships among stakeholders and to determine and control the strategic direction and
performance of organizations by aligning with company values. The Twitter Chairman Jack
Dorsey (2008) should have lesser separation between ownership and management control.
But as the time goes on, Evan William has been replaced and rehired as the Chief Operation
Officer (COO) on March 2011. After re-hiring Evan William, both Chairman and COO work
more closely than 2008 when Evan William was replaced by Jack Dorsey as the Chairman of
Twitter.
Furthermore, Twitter should configurating the executive compensation to discipline the
ineffective managers. The executive compensation is the mechanism that that seeks to align
the interests of top managers and owners through salaries, bonuses and long-term incentive
compensation such as stock awards and stock options.
Even though evaluating the managers of the Twitter is difficult, but we can evaluate them
based on the revenue business model or capitalizing business model. The effectiveness of
their revenue model will determining the effectiveness of their performance. This will
motivate the managers more especially Evan William as he is focusing on the product
strategy.
Not just the executive compensation is important, but the market for internal control is as
well. Twitter has been proposed to be bought by Google and Facebook in the past. However,
thanks to CFO of the Twitter, the acquisition process has been cancelled. In the perspective of
the institutional investor, it would be great as they can have their return on investment. But in
the perspective of the Twitter staff, they will be disappointed due to their culture and value of
the company. Therefore, the internal control is needed to be maintain all the time to prevent
acquisition from other company.
Next adopting the Twitter main strategy which is strategic alliance, the company needed to
change with its certain structure. By predicting its structural stability and structural flexibility
where the firm require consistently and predictably manage its daily work routine as well as
opportunity to explore competitive advantages firm will need to be successful in the future.

When implementing the strategy, organizational control is need as well. Organizational

control is the control that guide the use of the strategy, indicate how to compare actual results
with expected results and suggesting the corrective action when the differences is
unacceptable. In this case, Twitter are ought to emphasize more on financial control because
they are developing revenue model. Using established quantitative standards such as return
on investment (ROI) , return on equity (ROE), the company can tell the difference of the
expected and actual result and provide reasonable explanation to the investors.
After having an organizational control, Twitter should restructure into functional structure
where managers and key personnel make all the decision with all the functional line
managers in dominant organizational areas. Using functional structure, the decision making is
centralized and able to work together towards the same goal which is creating a revenue
model and increasing user database. However, it can negatively affect communication and
coordination among those representing different organizational control. Hence, using the
corporate governance of lessening the separation of the staff and ownership will avoid valuedestroying bureaucratic procedures such as failing to promote innovation.
In the functional structures using the differentiation strategy will pull off the Twitter needs,
meaning that integrating the set of actions designed by the firm to produce the or deliver the
goods or services at an acceptable cost that customers perceive s being different in ways that
are important to them in which targeting the customer with perceived value product.
-

Featuring with unusual application,

Responsive customer services,

Rapid product innovation ,

Technological leadership

Engineering design and performance

By doing this, twitter can have retains more of cross-functional product development teams,
strong focus on marketing and research and development (R&D), broad job scope and
informal rules and procedure. Having strong focus on marketing and R&D will help to
innovate the product and have competitive edge in branding. Broad job scope will increase
the cost but will also help in innovating and improve certain procedure or reduce expenditure
in the long run.

Overall, this would create and perceived Twitter as the having a high customer loyalty with
high profit margins due to product differentiation and increase entry barriers due to core
competencies.
Then, Twitter can implement the global strategy. Global strategy is the strategy whereby firm
offers standardized products across the country markets with the competitive strategy being
dictated by the home office. The main objective the global strategy is that to emphasizing on
the economies of scale and centralization of the firm strategy.
Hence, to adopt the strategic alliance, Twitter would need to use cooperative strategy or
strategy business unit (SBU) by integrating them with other company who wishes to join
forces in order to achieve its objectives.
Next, is the strategic leadership. Strategic leadership is the ability to anticipate the, envision,
maintain flexibility and empower others to create strategic change as necessary. This can be
done by having a top management team which are to make decision for the global strategy.
These team members which comes with a variety of strength capabilities and knowledge and
provide effective strategic leadership when faced with complex environmental forces.
-

Has greater propensity for strong competition

Tends to think outside the box

Offers various areas of expertise

Promote debating in order to have better perspective and competencies

However, after a long tenure with the same company will have reduction of the ability of
innovation. Hence, it is recommended that to hiring from outsiders to being diverse
knowledge bases and social network which offer the potential for synergy and competitive
advantage. Using the external labor market to hire expertise from various field to provide
advice and information to the management team.
Lastly, in order for the company to have competitive edge in the industry, the company must
have entrepreneur opportunity at all time. Entrepreneur is the opportunity in which new
products or services can satisfy a need in market due to competitive market imperfections and
unevenly distributed information. In other words, these opportunities can create new wealth-

producing resources with enhanced potential for creating wealth with innovation, intervention
or imitation.

For instance, Twitter can revolutionize the email by Twitter can scale down the
communication overload by restricting the messages to certain characters through new email
programme. It can enable some conversations become more public and more social. The new
email programme should be created to be linked to the Twitter account. Over time, Twitter
can make email become much more social and more efficient. The length limit on messages
is long enough to express most coherent points or ask a colleague a question while filtering
out much spam, newsletters, promotions and dissertations. The new email programme not
only uses Twitter handles to help people claim their addresses but also gives them the access
to a website with a basic interface to contact other users.

As such, using innovation as the cooperative strategies which can help to cooperate, integrate
knowledge and resources. Moreover, established companies may need new technologies
knowledge possessed by newer entrepreneur firm. Therefore, strategic alliance and joint
ventures allow this to occur.