Facebook is losing customers : is it time for Facebook to invade China?

Facebook could files S-1 to the SEC in the end of this year or first quarter of 2012, a lot of investors are super-excited about this upcoming IPO. The IPO valuation of Facebook could be around $100 billion. Facebook is currently worth about $80 billion on secondary markets. It's set to turn in revenues surpassing $4 billion this year.

If Facebook actually through its IPO at a valuation of more than $100 billion, then its way surpasses others social network which recently went public such as LinkedIn and Groupon. Facebook value would put them as massive as Microsoft, Apple and Google.

The shocking news arise following the IPO of Facebook later this year, Facebook reported lost lots of customers, mainly in their mature market. According to Inside Facebook's data service, Facebook lost 6 million users in the U.S. last month, dropping from 155.2 million to 149.4 million. That's the first time U.S. numbers have dropped in more than a year. It also lost around 1.52 million users in Canada.

Although total of Facebook users is increase 1.7% but big drops in the countries where Facebook is become popular is cannot be good. There is indication a saturation condition to respective countries that Facebook lost their customers. A forecast by Google insight might suggest that after the decline in the first quarter, the growth of Facebook users will be steady in the second and third quarter this year and will increase at the end of this year. An indication of saturation condition in the countries such as U.S, Canada and U.K will force Facebook makes a breakthrough to maintain sustain customer growth, otherwise a valuation of more than $100billion for its IPO will be over-value for a social network company.

The question is, how Facebook increase their users significantly but also losing lots of them on the other side of the world? Given that Facebook has not been able to break into the Chinese market – the world’s largest internet market with more than 457 million Web users – taking away a very significant number of potential members, there is some speculation regarding how sustained Facebook’s popularity and growth is likely to be in the future. The only way Facebook can keep growing, then, is to add big new countries, and that country is China.

Facebook was said to be trying to break into the Chinese market through partnering with a local technology firm. The coming IPO for Facebook is the good opportunities to attract investor that have good relationships in China.

It is time for Facebook to invade China.

Balance Scorecard Framework

The balanced scorecard is a strategic planning and management system that is used extensively in business, industry and non-profit organizations worldwide to align business activities to the vision and strategy of the organization

The balanced scorecard is a management system (not only a measurement system) that enables organizations to clarify their vision and strategy and translate them into action. It provides feedback to both the internal business processes and external outcomes in order to continuously improve strategic performance and results. Balance scorecard is linking strategy and operation

Balance Scorecard framework is consist of a strategy map and four perspective of the balance scorecard.

Strategy map is a visual framework for integrating the organization’s objectives with the four perspectives of a Balanced Scorecard.
The four perspectives of balance scorecard are :

1. Financial perspective : Describes the tangible outcomes of the strategy in traditional financial terms.

2. Customer perspective : Defines the value proposition for targeted customers.

3. Internal process perspective : Identifies the critical core processes that are expected to have the greatest impact on the strategy.

4. Learning and growth perspective : Identifies the intangible assets that are most important to the strategy.

Here is some illustration of the architecture of balance scorecard

check this Balance Scorecard presentation slide

Strategic Planning Steps - Total Quality Management Approach

Once the vision of the organization and the mission of the internal work groups have been identified and communicated, a documented business plan of the organization is followed upon and the results are compared and analysed against the objectives.

Total Quality Management (TQM) is a powerful, yet simple method of process improvement to achieve customer satisfaction, without the need for substantial additional resources. TQM anticipates customers’ needs and encourages employees’ participation and ownership of work processes. It is an essential first step, which allows an organization to define its own quality standards, compete on a higher level, exceed customers’ expectations, and increase profitability. Successful implementation of TQM requires a focus

on processes, systematic thinking, teamwork, cross-functional management, and an understanding of how and why the output or result of one’s work can have an impact on the next process. That means coordination and communication across, as well as through the hierarchies of the organization is essential.

Applying TQM requires understanding and applying methods to identify and solve problems, and improve on process cycles. The approach is an applied variation of the scientific method and process of problem-solving, called PDCA, “Plan-Do-Check-Act”.

 

The cycle (Shewhart cycle) below consists of the four steps from which the basic systematic analytical approach can be applied to improve quality and raise business standards. In short, to elevate the quality of the entire business process in a dealership, four basic steps must be taken as follows;

Step 1: Develop a business plan.

Plan to improve your operations first by finding out what things are going wrong (that is identify the problems faced), and come up with ideas for solving these problems. A business plan by definition is a written document describing the nature of the business, the sales and marketing strategy, and the financial background, of which contains a projected profit-and-loss statement. A business plan is also a road map that provides directions so a business can plan its future to avoid bumps on the road. Once the business plan is thorough and accurate, and kept up-to date, it will be an investment that pays big dividends in the long term.

Step 2: Operate according to this plan.

Do changes designed to solve the problems on a small or experimental scale first. This minimizes disruption to routine activities while the changes are tested for their workability. This can be summarised as testing the theory, recommending the action, and implementing the planned change, initially on a small scale. Measures are also to be established and data is to be collected.

Step 3: Understand and analyse the results of the plan.

Check whether or not the small scale or experimental changes are achieving the desired result. At the same time, continuously check nominated key activities to observe the results. With these results, summarise the data, identify the root causes, analyse, evaluate, and compare the effects, of the actual change with expected or planned outcomes.

Step 4: Take necessary countermeasures so that results are reflected in the future plans.

Act to implement changes on the results. Make changes in the “plan” where expectations are not met. At the same time, involve other persons (other departments, suppliers, or customers) affected by the changes and whose co-operation is needed for the changes to be implemented on a larger scale, or those who may simply benefit from what has been learned (of course, these people could already have been involved in the Do or Check stage). Grab this advantage and repeat the process to

achieve higher performance levels.

Planning is vital to increase profitability. Despite criticisms, many researchers suggest that formal planning systems do help managers make better strategic decisions. For strategic planning to work, it is important that top-level managers plan not just in the context of the current competitive environment but also in the context of the future competitive environment. To try to forecast what the future will look like, managers can use scenario planning techniques to plan for different possible futures.

The great virtue of scenario planning is that it can push managers to think outside the box, anticipate what they might have to do in different situations, and to learn that the world is a complex and unpredictable place that places a premium on flexibility rather than on inflexible plans that may turn out to be incorrect. Managers can also involve operating managers in the planning process and seek to shape the future competitive environment on strategic intent by prioritization of opportunities, management of risks, co-ordination of activities, communication of expectations, motivation of

organization and personal learning.