+1 862 207 3288 Valuing Facebook
Case 3 in Grant’s Contemporary Strategy Analysis (8th ed.) (pp. 462-471)
The case outlines the debate over the value of Facebook in the weeks prior to Facebook’s IPO on May 15, 2012. The focus of the case is on how strategic analysis of Facebook can provide a foundation for determining, or assessing, how much Facebook is worth. The key question that the case poses is: Given an IPO price of $34-$38, is Facebook a “once-in-a-lifetime opportunity” or is it “muppet bait”? (Please do not assume that investors knew how the stock price of Facebook would change between 2012 and now. They didn’t and couldn’t know! So, you cannot use a simple stock chart of Facebook from 2012 to 2015 to answer this question. Instead, you need to use this case to demonstrate your reasoning skills about assessing strategy, corporate performance, and firm value at a given point in time—without knowledge of the future.)
Based on the case and your own research, how would you describe and analyse Facebook’s strategy and its implementation? To answer this broad question, perform a comprehensive written case analysis, for which the expectation is that you (1) identify all important strategic issues that the company needs to address, (2) perform a detailed analysis and evaluation, and (3) propose an overall action plan and set of specific recommendations addressing the issues you have identified. In going through the exercise of “Identify-Evaluate-Recommend,” please follow the advice (pp. 8-10) in the Guide to Case Analysis (which is linked on the LearnOnline course website). Thus, your case analysis should consist of the following three sections:
1. Identification of Strategic Issues and Problems
2. Analysis and Evaluation
3. Recommendations
The three major sections of your report should be numbered and presented separately. Please use the headings above (and any other subheadings, if necessary or appropriate). In addition to these three main sections, please include an (unnumbered) Introduction and Conclusion. The Introduction should not summarise the case, but instead preview the main conclusions and structure of your analysis. The Conclusion should present general, creative, and insightful take-away lessons that may be applicable to other companies that may—or may not—be in the same industry as Facebook.
The ideal process for preparing your submission will probably look as follows:
1) Read the Facebook case in the latest edition of Grant’s textbook.
2) Read the Guide to Case Analysis (pp. 8-10) PDF that is linked in the Assignments folder on the LearnOnline website.
3) Review all course material and try to figure out what tools, theories, or concepts from BUSS 3023 are most relevant to this case. Be selective. Each case in Grant has its own unique focus.
4) Read the chapter(s) in Grant that you deem most useful for completing the three sections listed above and answering the key question.
5) Also think about material from other business courses that may apply and should therefore be referenced in your capstone case analysis. In this context, note that the case presents many numbers and formulas; use them in your analysis.
6) Perhaps you can (on your own) identify other research that may be relevant to this case analysis. Because the case is quite short you may have to conduct a bit of additional web research. There is no minimum or maximum number of sources to draw on; instead, please use your own best judgment about how many references are needed to support your case analysis. The help material on the course website and a few workshop exercises in weeks 10-13 will cover our expectations in further detail.
7) Ask your tutor any questions you may have about the case or the assignment instructions.
8) Listen to the lecture that will be devoted to this case. This is currently scheduled for week 9 or 10. (Upon request, I may be able to deliver the case lecture sooner.)
9) Read the Facebook case again.
10) Develop a detailed outline of your paper (going beyond the three main sections mentioned above).
11) Following the instructions in this document, write your paper.
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