�Avery Sevigny
Briyana Sutherland
Gabriella Piveta�Leila Hassan
Taylor McLaughlin�
Assessment - SWOT
Strengths | Weaknesses |
1. Collecting user data | 1. User startup cost (oculus) |
2. Market Dominance | 2. 26% decline in shares |
3. Brand awareness | 3. Decline in new users |
4. Facebook, Instagram, Whatsapp | 4. The strain on users eyes |
5. Environmentally Friendly | 5. Lack of experts in the field |
Opportunities | Threats |
1. Pandemic | 1. Increased security protection |
2. Demographic (technology generations) | 2. Doxing |
3. Cryptocurrency | 3. Mental health concerns |
4. Enterprises | 4. Reputation issues |
5. Expansion of pre-existing platforms | 5. Competition from other platforms |
Assessment - SWOT
Strengths: Meta’s biggest strength is collecting user data, to use for their advantage in the future.
Weakness: Expensive start up cost that discourages some first time users who are already on the fence.
Opportunities: Since the start of the pandemic, online/technology is becoming more present than ever.
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Threats: Young demographic is vulnerable to malicious cyber attacks, which is increasing mental health concerns.
Assessment – Income Statement
(In millions)
Financial Metric | Current Year | Prior Year | Change |
Sales | $117,929 | $85,965 | 37.2% |
Gross Profit | $46,753 | $32,671 | 43.1% |
SG&A | $23,872 | $18,155 | 31.5% |
Net Income | $39,370 | $29,146 | 35.1% |
Gross Profit Percentage | 39.32% | 38.01% | 3.4% |
Return on Sales | 39.6% | 38% | 4.2% |
Assessment – Income Statement
-Meta has increased revenue by almost 50 billion since 2019
-Meta’s net income has more than doubled over the last three years
-The weighted average shares (what’s used to compute earnings per share) have decreased each year since 2019
Assessment – Balance Sheet
(In millions)
Financial Metric | Current Year | Prior Year | Change |
Cash & Equivalents | $16,601 | $17,576 | -5.5% |
Receivables | $14,039 | $11,335 | 23.9% |
Inventory | $57,809 | $45,633 | 26.7% |
Debt | $21,135 | $14,981 | 41.1% |
Other Liabilities | $7,227 | $6,414 | 12.7% |
Current Ratio | 3.15 | 5.05 | -37.6% |
Quick Ratio | 0.419 | 2.01 | -0.79% |
Leverage | 0.169 | 0.116 | 45.7% |
Assessment – Balance Sheet
-Lost $9 billion in assets from 2020-2021
-Total stockholders equity dropped about 3 billion over the year span
-Class A shares: lost almost 80 million in shares from 2020-2021
-Class B shares: lost 20 million in shares from 2020-2021
Analysis – Primary Problem
The primary problem identified for Meta Platforms Inc. is the shareholder returns…
Alternatives
We identified the following three alternatives that each solve our primary problem:
1. Separate Meta from Facebook
2. Including Oculus VR headset as a bundle with consoles.
3. Partner with IBM to sell Oculus to global companies
Alternative #1
Separate Meta from Facebook. Spin Off Facebook
Spin-off Facebook
Analysis of Alternative 1
Benefits | Challenges |
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|
|
|
|
|
Increase in Sales / Cost Reduction | Investment Required |
14% percent ⬆️ |
|
Alternative #2
Include Oculus VR headset as a bundle deal with consoles.
Oculus Bundle
-100+ MILLION monthly users
-20 MILLION new edition Xbox and PS5 sold
-Accessibility to gaming demographic; gaming conventions
-Relieve decision making; buyers save money
-Positive relationship between Sony & Microsoft
-Overall increase popularity
Analysis of Alternative 2
Benefits | Challenges |
Introduce Oculus to a larger audience (100+ million monthly users) | Competition from other VR headsets |
Decrease marketing and distribution costs | Marketing would primarily rely on Sony and Microsoft |
Increase overall sales, leading to increase in profit | If more bundles are sold than the individual product, it will affect the individual product’s bottom line price |
Increase in Sales / Cost Reduction | Investment Required |
$7,500,000 | Increased cost of production due to larger demand for Oculus:$3,520,000 |
Alternative #3:
Partnering with IBM consultants to sell Oculus headset to global companies for example, Microsoft.
Alternative 3
-
-
-maximize CRM platforms
-notes, activities, metrics into one cohesive
system
32.68% vs 11.9%
-2.5 years creating a way for up to 16
people to sit around a conference table
Analysis of Alternative 3
Benefits | Challenges |
Executives would be able to communicate with each other/other businesses | Won’t like the VR headset |
Higher shareholders return | High price tag |
Save money on travel | Underlying health effects (eyestrain, headaches) |
Increase in Sales / Cost Reduction | Investment Required |
$400 per Oculus Up to 16 executives in conference through VR (400x16= $6,400) Roughly around 500,000 sold worldwide per month (500,000x 400= around 200 million) | IBM Consultant Team (4): $432,000 IBM Marketing Team (2): $166,000 Travel & Accommodations: $18,000 =$616,000 |
Final Recommendation
Alternative # | Source of Funds | Investment Required | Revenue | Return on Investment |
Spin-off Facebook | Money from the spin-off. | 124.879 billion | Revenue went up to 142.362 Sales = 17.483 million annually. | 14% |
Oculus Bundle | Money saved from marketing expenses | Distribution: $880,000 Development: $3,520,000 | $7,500,000 | 12% |
Sell Oculus to global companies | Money saved on advertisement | $616,000 | $200,076,800 | 243% |
Our team decided alternative 3 was the best alternative!
Implementation – Impact on Stakeholders
Stakeholder | Implementation Summary |
Customers | Customers would gain brand awareness. |
Investors | Investors would be profiting more once sales start rising and cryptocurrency. |
Employees | Employees would gain more experience and ability to connect with more customers. |
Management | Management would gain accessibility to new consumers and continue to grow their business. |
Implementation – Timeline
30-day:
1 year:
3 year:
Conclusion