Meta (Facebook)
Meta Platforms, Inc., is a social media application development company based out of Menlo Park, California. It is most widely known for its software products and family of apps, whose members include Facebook (FB), Instagram (IG), Whatsapp, Facebook Messenger and more. Meta also engages in hardware products, such as its Oculus headware developed by the Reality Labs (RL) branch.
Does the company have a comparative advantage over its rivals?
In total, Meta declares that it has a reach of 3.6 billion individuals monthly and a reported profit of $7.5 billion for the first quarter of 2022. (Frenkel, 2022) With annual revenue higher than some country’s GDP, Meta has a huge comparative advantage in the capital available to invest in its own products and services. This financial capital is not the only resource Meta is capable of flexing. The human capital is considerable, with Meta’s employee count at a staggering 71,970. This is more than Twitter and Snap, who have employee counts of only 7,500 and 5,661 respectively. (Factiva, 2022)
Explain the supply and demand for its key product or service.
With Meta’s offerings being so diverse, it can be difficult to pinpoint an exact key product or service. For instance, one can point to key metrics such as sales of their VR headsets, which exceeded over 4.6 million dollars in 2021. (Chahuan, 2021) This would only be one key product in one subsets of their technology companies. Other subsets, such as Facebook have seen less favorabe results in the last year. As Naughton reports in The Guardian “ shares dropped 25% at one point, taking $240bn (£177bn) off its market value, which in turn led to a 2% drop in the Nasdaq index.” (2022) While some would suggest that these metrics are indicators of waning demand on the super tech giant, it is best to temper these expectations with other reports emerging from nonfiscal arenas. For instance, Meta is currently wrapped up in at least 8 lawsuits involving claims that they have overengineered their product to the point of causing addiction in youth and adolescents. (Soon, 2022)
Provide the GDP of its home country and a key market (country).
Meta is undoubtedly an international company. The GDP of its home country (USA) is 22.99 trillion USD with an annual growth rate of 5.7%/ (Statista Research Department, 2022). India, a key market for Meta, has a GDP valued at nearly three trillion U.S. dollars and real GDP growth rate of 8.95%. (Basuroy, 2022)
How does fluctuations in GDP, economic growth, investments, and patents affect the company’s profitability?
Meta’s products entirely depend on technological access. In developing nations or impoverished communities, Meta will have little to no demand. As countries continually rise in GDP per capita, technological access is more widely distributed and therefore Meta’s market continues to expand. Patents are also extremely important when it comes to competition in the technological space. With so much capital, Meta has more opportunity for invention and innovation, which is incentivized in societies that allow them to hold patents.
References
Basuroy, T. (2022, March 4). The Statistics Portal. Statista. Retrieved June 28, 2022, from https://www- statista-com.ezproxy.regent.edu/topics/9061/the-indian-economy/#topicHeader__wrapper
Chauhan, B. K. (2021, July 14). Oculus quest 2 cumulative sales hit record 4.6 MN. Counterpoint Research. Retrieved June 28, 2022, from https://www.counterpointresearch.com/xr-headset-shipments-almost-triple-yoy-q1-2021/
Factiva. Meta Platforms, Inc. Company Snapshot. (n.d.). Retrieved June 28, 2022, from https://global-factiva-com.ezproxy.regent.edu/pcr/default.aspx.
Frenkel, S. (2022, April 27). Meta, Facebook's parent, reports a 21 percent drop in profits. The New York Times. Retrieved June 28, 2022, from https://www.nytimes.com/2022/04/27/technology/facebook-meta-earnings.html#:~:text=Meta%2C%20the%20company%20formerly%20known,on%20revenue%20of%20%2428.2%20billion.
Guardian News and Media. (2022, February 6). For the first time in its history, Facebook is in decline. has the tech giant begun to crumble? | John Naughton. The Guardian. Retrieved June 28, 2022, from https://www.theguardian.com/commentisfree/2022/feb/06/first-time-history-facebook-decline-has-tech-giant-begun-crumble
Soon, W. (2022, June 9). Meta is facing 8 lawsuits that claim Facebook and Instagram lure young people into addiction for profit. Business Insider. Retrieved June 28, 2022, from https://www.businessinsider.com/meta-facing-8-lawsuits-facebook-instagram-lure-young-people-profit-2022-6
Statista Research Department (2022, June 21). Topic: GDP of the United States. Statista. Retrieved June 28, 2022, from https://www-statista-com.ezproxy.regent.edu/topics/772/gdp/#topicHeader__wrapper
Brad,
Excellent post on Meta. It's fascinating to see the way that this company has progressed, focusing on technology's future. It seems to be following Google's move in 2015, making a larger parent company named "Alphabet". In the same way, Alphabet has multiple companies within itself, making it difficult to pinpoint their main product, similarly to Facebook's Meta. You mentioned that Meta would not have any demand in developing parts of the world. It seems like Meta's goal is to give connection to every part of the world, why would that not happen in developing countries?