Introduction
Twitter’s SWOT analysis demonstrates strong brand recognition and a solid customer base. At the same time, it was found that the operational costs are increasing. One of the opportunities that needs to be seized is the enhancement of users’ experience with the threat of rising competitiveness, which puts the company’s position at risk.
Considering the SWOT analysis, this paper aims to suggest a strategic initiative to address the opportunities and threats and to analyze the company’s strategy through the Miles and Snow framework. The suggested strategy, that is, the implementation of a subscription service, will then be justified through the SAF framework, and the future possibilities will be inferred as a result of the CAGE analysis.
Current Business-Level Strategy
Twitter’s current business-level strategy can be analyzed through the Miles and Snow (M&S) framework. It categorizes companies into the following four types: defenders, analysts, prospectors, and reactors. Defenders can be characterized as businesses that place more focus on maintaining their current position rather than adopting innovations and opting for risky decisions (Aljuhmani, Emeagwali, and Abadneh, 2021).
Prospectors are, on the contrary, not afraid of adopting risky, innovative strategies, which can place them ahead of their competitors (Verma and Sharma, 2019). These companies hold firmly to their current positions but are not afraid to explore new opportunities, albeit with a highly analytical approach (Alnoor et al., 2022). Finally, reactors adapt their strategies according to external changes; they react rather than act.
Taking into consideration the M&S typology, it can be inferred that Twitter belongs to the category of prospectors. Defenders and reactors can be excluded as possible types of Twitter’s strategy, as Twitter’s priority has always been innovation rather than preserving its current position. Twitter cannot be characterized as a reactor either, as most of its strategic decisions did not come as a result of the reaction to changes in the market. On the contrary, in many cases, Twitter was a catalyst for market changes (Van Dijck, de Winkel, and Schäfer, 2021). The category of prospector is more suitable for Twitter, as innovations play a more important role than defending the current position.
Since its creation, Twitter has been known for innovative approaches to its business and marketing strategies. In the beginning, Twitter was presented as an innovative platform with original functionality that no other platforms of the time could offer (Thomases, 2010). Over the years, it has continued to demonstrate its willingness to experiment with unconventional ideas and try to stay ahead of its competitors in the market (Burgess & Baym, 2022).
The examples that illustrate Twitter’s role as a prospector on the market are a range of services introduced by the company throughout its existence, as well as some decisions that were deemed controversial. Some of the controversial decisions of the time included acquisitions of companies such as Vine and Periscope, which were leaders in the social media market in the 2010s (Burgess & Baym, 2022).
These decisions demonstrate Twitter’s predisposition to keep expanding in the market and maintain its relevance against emerging competitors. In the future, Twitter will likely continue elaborating its strategy as a prospector in the social media market. Some of the future directions for its strategic development might include the expansion of the monetization options for Twitter content creators and the invention of innovative ways for implementing monetization.
Twitter has also made an emphasis on its aim of fighting against misinformation, which might distinguish it from its competitors as few social media platforms prioritize this kind of objective (Haro-de-Rosario, Sáez-Martín, and del Carmen Caba-Pérez, 2018; Masroor et al., 2019). Twitter might also aim to introduce innovative services, such as a payment subscription service, with exclusive new features that other platforms do not provide, which could place them ahead of their competitors.
Strategic Initiative
This paper proposes that Twitter implement a monthly payment subscription service. This strategic initiative will, on the one hand, correlate with Twitter’s role on the market as a prospector in case this subscription service provides innovative, exclusive features absent on other social media platforms (Gil de Zúñiga, Koc Michalska, and Römmele, 2020). On the other hand, it will help to recover and increase the company’s revenue, which has been declining steadily in recent years.
In order for this strategy to help Twitter compete in the market, it needs to be tailored specifically to how Twitter caters to the necessities and demands of its users. Firstly, by implementing certain exclusive features, such as offering exclusive content and benefits to subscribers, Twitter could attract and further retain users who demand a more personalized experience on the platform (Skrob, 2022).
Twitter emphasizes freedom of expression; thus, if the new strategy gets somehow intertwined with this foundational value, it could help attract and retain more users who share the same value (Beausoleil, 2022). By this, Twitter could, on the one hand, distinguish itself from its competitors, who do not emphasize freedom of expression and increase revenue.
Another aspect in which Twitter needs to compete with other platforms in the market is monetization for content creators. Other social media platforms provide their own monetization methods, which help them retain content creators. Content creators are the figures who help social media platforms attract and retain users (Skrob, 2022). This is why, if Twitter provides content creators with exclusive and convenient monetization methods through a subscription service, it would increase Twitter’s ability to compete in the social media market.
Regarding the Knowledge and Skills framework in the social media industry, several important aspects need to be considered when developing this strategic initiative. These aspects include the convenience of content creation and curation for the users, the engagement of the audience, the consideration of analytics and metrics, specific audience targeting, and crisis management (Hanlon, 2021). Legal and ethical considerations are also important, especially since Twitter prioritizes freedom of speech and expression.
In terms of content creation and curation, the subscription strategic initiative will provide users with new innovative ways of creating and managing content (Kao & Luarn, 2020). Offering possibilities for collaborative, more interactive, and personalized content can distinguish Twitter from other social media platforms (Wojcik & Hughes, 2019). The engagement of the audience is another important aspect, which could be increased by providing features exclusive to Twitter, including new ways of content creation.
SAF Framework and Strategy Justification
The justification for this strategy can be explained through the SAF framework. The SAF framework includes criteria such as suitability, acceptability, and feasibility. In terms of suitability, it is necessary to evaluate whether the current strategy addresses the market circumstances, the industry, and the company’s operation in particular (Hanlon, 2021, p. 348).
Specifically, the opportunities and the constraints need to be addressed in order to meet the suitability criteria. Acceptability deals with the risks that this decision might imply, as well as the stakeholders’ readiness to implement the decision (Grant, 2021). Finally, the feasibility criteria deal with whether the resources at the disposal of the organization correlate with the resources necessary for the implementation of the strategy.
To analyze the suitability of the strategy, it is necessary to look at the industry trends and the market. There are several trends that the current strategy will comply with: first, it is the trend of personalizing the social media experience and making it more exclusive. Secondly, there is a trend of introducing subscription services, which gives platforms an additional revenue source (Cho et al, 2022). By implementing such a service, Twitter addresses diversifying revenue generation opportunities. Moreover, it addresses the opportunity of increasing audience engagement. When it comes to constraints, the constraint of limited revenue sources is addressed.
To evaluate the acceptability, it seems crucial to look at the audience’s general predisposition to accept this kind of model and whether the stakeholders will be ready to implement it. When it comes to stakeholders, they are most likely to be open to introducing the current strategy. As Twitter is a prospector, Twitter’s stakeholders opt to introduce innovations to the platform’s operation.
On the other hand, the risk may come from the audience’s readiness to start using this product (Shaw, 2021). Twitter audience might be reluctant to start using a service that they need to pay for, especially if the benefits do not cater to their needs or are not thoroughly explained. Thus, it is necessary to prepare for this risk properly.
In terms of feasibility, the resources necessary to implement this strategy would include proper technical infrastructure to ensure convenient and secure payment, as well as marketing resources, customer support, and financial resources (Skrob, 2022). All of these resources are at Twitter’s free disposal. Thus, the feasibility criteria can be met fully.
Hence, the inclusion of the mentioned service can potentially improve financial results by giving the company access to a new source of income (Hansbrough & Schyns, 2018). Investors and other stakeholders may look at this favorably since it shows that Twitter is trying to evolve and create stable revenue streams. Twitter’s vulnerability is that it has not yet perfected the art of selling its membership service to its target demographic and tailoring its features to their specific demands.
Future Directions
The evaluation of the possible future directions for developing Twitter’s business strategy can be conducted through the application of the CAGE framework. The CAGE framework refers to four aspects of a strategy: the cultural, administrative, geographical, and economic distance (Bouzid, 2020). In particular, it is used when the applied strategy has an international scope; thus, it is necessary to measure what differences exist and can affect the strategy on the four levels of the CAGE framework (Bouzid, 2020). As for Twitter’s future directions, an international approach is necessary as Twitter operates in most countries, and therefore, considering the CAGE aspects is necessary.
In terms of the cultural factors, it is necessary to consider how the cultural differences affect target markets. For example, it is essential to consider what kind of content is demanded in one country or another and adapt the subscription service conditions based on these demands (Bouzid, 2020). The administrative factor refers to content regulation in certain parts of the world, as well as payment regulation. Another aspect of this factor is data privacy and censorship, which can be harder to regulate with the subscription model (Skrob, 2022).
Regarding the geographic factor, the most important aspect to consider is the geographic distribution of the potential subscribers, with a particular focus on the markets with the most numerous target audiences (Lopez-Cabrales & DeNisi, 2021). A focus on more populated countries where Twitter has a notable presence, particularly countries such as the US, Japan, and India, might be the most beneficial approach. The economic conditions of the present countries’ markets must also be considered: developing markets with a potential to grow should be targeted.
By conducting this analysis, the following future strategy can be suggested: the focus needs to be on developing highly populated markets with a particular demand for content where Twitter already has a notable presence. Considering these criteria, further expansion into the Indian market seems an appropriate choice for future direction, as India’s market is developing fast and has a high demand for the services offered by Twitter.
Conclusion
The present analysis has helped identify what aspects need to be considered when dealing with the company’s future strategy formation. First, Twitter’s current business strategy was evaluated with the application of the Miles and Snow framework, which showed that Twitter can be classified as a prospector, which means it focuses on innovative and risky incentives. With the consideration of this framework, it was suggested that the subscription service strategic initiative be implemented, which, after analyzing it through the SAF framework, was found to satisfy the suitability, acceptability, and feasibility criteria.
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