Twitter Case Study
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Introduction:
Twttr Beta, or more formally known in todays blogging world as twitter.com, is a broadcasting system that allows users to share small bits of information to people all over the web. Twitter is unique in a way such that it is an open source software that allows users to send and receive blogs in real-time. Twitter is regarded as one of the fastest growing technology companies since Google and Facebook. Users have grown substantially from 29 million in mid-2009 to about 200 million by March of 2011. Although twitter is one of the hottest technology companies out there, it has many complications as well.
This company has been criticized for having no moneymaking business, organizational turbulence (among managers), and also several server crashes. However, every company is presented with complications. According to Evan Williams and Dick Costolo, the companys CEO, they have declined many offers to sell the company and urge that the company is not for sale for a reason. They believe twitter will continue to grow and the best is yet to come. They also insist that the reason they do not have a structured moneymaking business model is because they believe twitters perceived value has extreme potential and they want to have as big of an impact as possible.
Stakeholders and their expectations
Twitters Primary Stakeholders are the stockholders who use their money to fund the company. Also their investment is greatly associated with the performance of the company, therefore if the company does well the stock can increase in value. Some names of the business investors are : Institutional Venture Partner, Benchmark Capital and Digital Garage. Also some of Twitters stakeholders are creditors that loan money (as much as $200 million in December 2010) to the firm. Concerns that creditors may have is that the loan/capital financing may not be refunded and ends in a default. Other stakeholders of the company may contain: employees, customers ,owners and Users/customers.
Stakeholders expect a high return on their venture and want mangers to focus on maximizing returns. This may entail less cost and more profits. These Investors believe in company and expect it to grow but soon will want a return on their investment. Twitter has other plans instead of distributing money to its stakeholders , they are focusing on enlarging the company and is reinvesting the shareholders money back into the company to support the mangers new ideas.
Therefore , analyst suspect that the investors are eventually going to drive Twitter to make an return on their investment. Twitter should attempt to improve communication with the stakeholders by listening to the stakeholders ideas and concerns. By doing this they can ensure long term success. As a result of the rapid growth In 2009 , the company has had several server crashes in the past, this type of problem may influence the users to stop using Twitter which equals less revenue for the company. The business should not only focus on expanding the company but updating its current foundation to do so. Having a plan to improve is beneficial especially in the technology world.
Stakeholders may also like to see a business plan and suitable disclosure of financial information. They also need to know about changes in management, such as an new Chairman or the CEO on board are they internal or external substitutes. Stakeholders should know who is running the company and what impact can it have on the business. The constant change of management can also affect the stakeholders sense of continuity.
Strategic Leadership
Strategic Leaders, according to the book “Competing for Advantage” involves managing through others, managing an entire enterprise rather than a functional subunit, and coping with change. There are five different levels involved; Level 1- Highly capable individual, level 2 -contributing team member, level 3- competent manager, level 4- effect leader, and level 5- executive. The skills of the lower levels are essential to become a great leader which very few are able to attain.
Strategic leaders should ensure that the firm is profitable, maintain a competitive advantage, a create stakeholder relationships all which in return show a higher performance of the company. Twitter is not doing so well. They are having a hard time competing with others who have the same functionality and come across more appealing to users. It is clear that if top management and the CEOs were successful strategic leaders, then Twitter would have no problem gaining a competitive advantage over others. Although founder Even Williams came up with this idea to communicate with others over the internet in real-time, this new technology would soon be available to others such as Facebook and other social networking sites.
After 4 years, Twitter faced competitors and therefore have not earned a major amount of revenue. Soon after, Williams along with Danny Sullivan and Jack Dorsey came up the Twttr Project, which soon became Twitter. Over the years it has become increasingly more popular, and has received investments which added value to the company, but it is lacking a business model. This should have been done previously to its continuing growth