1. The main three general environmental factors to be considered for this industry are demographic, economic and socio-cultural. Effects for these factors are positive, negative, and positive respectively. In social media industry demographic factor is positive, because Facebook is free social networking site that allows users from age of 13 to any age to use it. Also, Facebook allows users to continuously stay in touch with friends, relatives and other acquaintances wherever they are in the world.
2. Five forces in social media industries are threat of new entrants (low) because Facebook is the biggest social networking site with one billion active users per month. Threat of substitute (moderate) due to other countries has their own social network sites such as Germany has Wer-kent-wen and Google is one of their biggest competitors. Bargaining power of customer is high, because users and advertisers are biggest customer in social media industry. Bargaining power of suppliers is high because users are also the “suppliers” due to the fact amount of information users provide to facebook. The competition rivalry on social networking market is low as ther is no social networking site with over a billion users on monthly base. Industry is definitely attractive for new entrants; however, it’d be really hard for new entrants to break though successful companies like Google and Facebook. If anything new entrants would be bought out by them before they go viral.
3. Google plus and LinkedIn are facebook’s two major competitors. Google’s video calling services like Google hangout can attracts more users by allowing video communication over cell phone and desktops. Google’s competing with facebook at many levels from social networking to advertising. Yet, Google’s future goal is to compete for advertising budget of other companies. On the other hand, LinkedIn is working on