Facebook Adoption

Satisfactory Essays
To create and maintain healthy levels of firm value, profitability and other factors essential in running a successful business, organisations like Facebook understand the significance of customers being central to all their marketing activities (Pride et al. 2012, p.4). This essay will analyse Facebook’s billion dollar purchase of the photo sharing app Instagram in 2012, in the context of the article ‘Facebook buys Instagram for $1 billion’. Further on, this paper will explore the theory of customer orientation as a marketing concept and evaluate how Facebook’s acquisition is an example of this notion. Zuckerberg (2012) states that as a result of the change in business, the Facebook brand with be expanded, while also becoming competitor orientated. Lastly, this paper will conclude by explaining the impact those factors like customer/competitor orientation and branding, have on the sustainability and corporate value of an organisation like Facebook.

The multi-billion dollar non-commercial business ‘Facebook’ is one of the biggest competitors within the social media market and is visited approximately by 400 million users monthly, (Carlson 2010). Quickly reaching Facebook’s level of popularity, Instagram’s user base is made up of 200 million members, with over 20 billion posts made within two years (Instagram blog 2014). This rapid level of success sparked interest from other businesses like Google (Constine et al. 2012), and concluded with Facebook’s successful purchase in 2012.

Facebook’s acquisition of Instagram, as exemplified in the article, is considered a good example of customer orientation. Customer orientation is defined as “the set of beliefs that puts the customer's interest first, while not excluding those of all ot...

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...and positively associating it with Instagram, Facebook heightens the chances of gaining an even larger customer base, effectively increasing profits and market share, resulting in a sustainable positive firm value. Lastly, through eliminating other competitors within the social media market, Facebook earns larger shares within their respective market, while gaining assets, again contributing to a healthy firm value.

Facebook’s acquisition of Instagram in 2012 is a decent illustration of marketing strategies like customer/competitor orientation and branding in action. The company values their customers and views products from their perspective, are conscious of their competitors actions and have extended their brand to millions of other potential customers. This has had a positive impact on the company, allowing for it to enjoy a sustainable and healthy firm value.
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