Furthermore, by buying Instagram, Facebook ensured that it has a competitive advantage over Google, Microsoft, and other competitors. Instagram allows Facebook to compete in a market where it doesn’t have a very strong presence, and helps it retain younger users. The $1B price tag may have seemed exorbitant in 2012, but looks almost cheap today. More importantly, it attracts the adolescents and teens that are leaving Facebook in droves.įacebook’s strategy in acquiring Instagram was to a) corner the fledgling mobile image sharing market, and b) hedge its bets for future growth. It is the dominant photo sharing app on all mobile platforms. To most outsiders and pundits, this looked like a rather rash decision from a pre-IPO Facebook.įast forward to 2014 and Instagram’s user base has shot past 150M. STRATEGIC WAR OUTLINES PDF ANDROIDKeep in mind that until then, Instagram had *just* 30M users and did not have an established presence on the Android OS. In April 2012, Facebook changed the mobile startup scene overnight by acquiring the photo sharing startup, Instagram, for an unprecedented $1B. Think of the Fortune 500 firm that buys out a competitor, or when a larger firm merges with a competitor to corner a young market.Įxample: Facebook’s Instagram acquisition One very common business strategy is for larger firms to gain a stronghold in a growing market through aggressive M&A activity. You can learn more about different business concepts with this simple smart business system. In this article, we will look at a few common business strategies and see some actual examples of the same from the business world. From partnering with other firms and attracting top talent to acquiring new technology all comes under the gamut of business strategy. It is a very broad term that encapsulates everything a business does to make money. Business strategy defines the approach, tactics and strategic plan adopted by a business to attract customers and achieve its business goals.
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