Strategy illustration on External Analysis Essay

Strategy illustration on External Analysis - Essay Example The direct investments in Facebook have valued the company up to $50 billion. The company raised this money for making a further bolster its cash reserves. By this move, the company aimed to strengthen its reserves and surplus thereby increasing financial stability and limiting any liquidity risk by the company in the short term. The company also took care about the limited dilution factor of its shareholders. Macro Environment The investment thereby generated many questions among the shareholders of the company and the investor class as it was against their speculations. The company disclosed no immediate plans to invest the money rose by them and clarified that the money was raised to strengthen the cash position of the company. By this move, the company aimed to strengthen its reserves and surplus thereby increasing financial stability and limiting any liquidity risk by the company in the short term. The company also took care about the limited dilution factor of its shareholders. The company disclosed that under the transaction terms, it had option to accept between $375 million and $1.5 billion to receive from Goldman Sachs by the way of overseas offering. ... Facebook is incorporated in US through Macro-Economic forces in the country have a little impact of the company. Facebook is social networking build on a global platform where factors like inflation rates, interest rate and current exchange rates in bear some impact, but such impact can’t be considered influential. As the interest rates are slashed as a result of recession in the economy, the company could borrow money at a cheaper interest rate. Same is the case with changes in current exchange rates. Global Forces Barriers of trade and information sharing impact the company’s business in a primary way. Removal of such barriers helps the company to expand its operations in other countries. These also help in raising funds globally thereby giving advantage of cheaper funds. Growth in countries like India and China are posing increased opportunities of doing business in these countries. Technological Forces Being a social network company, technological forces impacts the company in a big way. Technology sector in the US includes more than 140,000 companies with combined annual revenue of about $900 billion. AT&T, IBM, Intel, Adobe, Apple, and Microsoft are the major companies (US Technolgy Sector Analysis, 2010). â€Å"Industry concentration is high in many segments with the largest 50 participants generating more than 60% of the segment revenue† (US Technolgy Sector Analysis, 2010). Scientific discoveries and new product developments form the basis of profitability in this industry. Both large and small companies can compete successfully – the mammoths have access to capital and marketing and the miniatures have domain-specific expertise. In the period Aug-10 to Jan-11, the Application Software industry has been on a bullish trend before being thrust