The Treat of substitute products and services
Facebook at the minute is the dominant social networking site, but there are other large ones, such as Bebo, which from my own knowledge, its popularity is going downhill due to a large amount of users moving to Facebook, largely due to its more grown up user interface and just the ease of doing things. Facebook is over time being introduced to many more sites and applications that allow them to post things on your Facebook page, its things like this that is keeping Facebook fresh, as it is now basically available everywhere, even when not on the actual Facebook website.
The Threat of the entry of new competitors
With the internet being open to anyone to use, it is very easy for similar products to appear that could very much cause threat to any business, Facebook’s main growing rival at the minute would be twitter, a micro blogging sight that works very like the status updates on Facebook, except unlike Facebook many people are drawn to it due to the fact that many celebrities have and use the service quite regularly and any normal person can “follow” them to get updates from them, Facebook has got fan pages for people but its not the same as they are mostly companies that just bombard people with information about upcoming products. Most websites and applications now also have twitter support as well as support for Facebook, which shows just how much it has grown in a short amount of time I expect its popularity to increase rapidly.
The Intensity of competitive rivalry
Facebook is not overly different than any other networking site, myspace and bebo let you do basically all of the same things, just with different user interfaces. Facebook is however the one that introduces the most new products, things like the iphone applications means that more people will use the service whilst on the move, something that the competing sites do not have. Facebook is continuously updated with new features and novelty items that will keep people visiting the site, just to see what has changed. Facebook is also now available in the majority of countries world wide and is available in over 70 languages, 2 of which are novelty languages, English Pirate, and English Upside down, both of which have no real use, but will make people use Facebook over other sites.
The Bargaining power of Customers/buyers
Large amounts of users on Facebook are likely to be able to have quite an effect on Facebook, as it relies largely on the network effect, if one person was to leave it to try a different site, so might their friends, then their friends friends, and in a short space of time a very large amount of people may have left, leaving Facebook to try and find ways to out do its competitors further to try and get the market share back. Many firms do however have spaces in Facebook which means that there is very little reason to leave it for any reason as everything is already available without signing up for anything now, benefits Facebook, but also the other companies due to the hugh amounts of traffic that Facebook offers.
The Bargaining power of suppliers
The main suppliers of Facebook would be of physical computer components and internet usage, with a company the size of Facebook its likely that their computers and servers would be updated quite regularly due to the speed of growth, so there will be many suppliers that want to supply to youtube, which will mean they will offer their best possible price to try and get them to buy from them. With the ISP that Facebook uses they probably charge for the amount of traffic, again Facebook will be going to bring a lot of business to the ISP company so again there will probably be some sort of price war to get their business.
