Entry of Facebook Inc. into China

Executive Summary

The core purpose of this paper is to examine the efforts made by Facebook to enter China’s internet technology market. The paper has started by examining the non-market issues by providing an explicit explanation of why it is a potential problem or opportunity for Facebook. The arena, especially the political forums where the identified issues can be addressed, is another area of concern. Additionally, the key actors and interests, information, and assets for each actor have been examined. The possible outcomes if actions to improve the bargaining position of the company are not taken are also predicted. The appropriate strategies, both market and nonmarket, have been constructed and the discussion of the tactics to implement such strategies to secure the best outcome for the firm have been provided, given the constraints faced. In conclusion, Facebook Inc. needs to address several issues such as ensuring user’s human rights and countering the competitors in the Chinese market.

Entry of Facebook Inc. into China

This paper aims at investigating the entry of Facebook Inc. into China and the effect it has had on the users in the country. No doubt, Facebook is among the internet technology companies that have gained popularity globally. Recent research indicates that many people are currently using Facebook internet forums for interactions with friends and family (Muncaster, 2012). There have been increased concerns on how the entry and popularity of Facebook have become a potential problem or opportunity for this internet technology organization. As such, this paper examines the information, interests, and assets of the key actors with regards to the company’s current position in China. Most importantly, Facebook’s entry into China has called for the construction of the market and nonmarket strategies, which need to be implemented to ensure its outcomes are secured in the best way possible.

Issue

Most internet technology organizations including Facebook Inc. have been blamed for the negative effects they have on the wellbeing of the people because of their recently developed censorship tool (Technical News, 2016). Notably, the internet services provided by Facebook have been blocked in the recent years resulting from different human rights issues. For instance, there are claims that the personal information of the internet users has been subjected to censorship and surveillance and, thus, compromising their human rights and privacy. As such, the Human Rights Watch (2011) raised concerns that the company needs to disclose to the public the plans it had concerning how it would safeguard users from any form of online cybercrimes infringing their personal information. Additionally, the popularity of this firm has come with the issue of the wellbeing of people being affected by the daily interactions with their friends. Thus, this situation has required the company’s effort to ensure personal accounts and messages are safeguarded.

Actors, Interests, Information, and Assets

Actors

The first actor is Facebook Inc. whose aim is to enter China market as another opportunity for growth. Additionally, the Chinese Government plays a role in setting laws and policies to govern the content posted on the social media platform provided by Facebook. Additionally, the presence of the local companies like Baidu.com indicates the competitive force that the company needs to tackle to do well in China. Lastly, the Human Rights Watch has been another actor that has kept the track of whether the internet technology companies protect the human rights of the users.

Interests

First, the company has an interest in expanding its market by connecting people worldwide, including China. Facebook has spent time to understand and learn more attributes concerning China given its great diversity and difference in culture from the West. On the other hand, the Chinese government has shown interest in accessing the information of Facebook Inc. overseas to confirm the claims that it does not control the contents people post. Also, most of the users of social media have chosen the internet services offered by Facebook than other internet service providers. The Chinese users comprise the target customers of Facebook. Moreover, Facebook Inc. has shown an interest in partnering with Baidu.com to enter the Chinese market. Finally, the Human Rights Watch has been interested in the content censorship by Facebook Company.

Information

Although many people use the services provided by Facebook globally, there is no clarity on how it will offer protection to the human rights of the users including the Chinese Citizens. The only approach that Facebook can use to get into China is through the Chinese government because of its power to regulate the content on social media (Horwitz, 2016). Thus, the company’s entry in this nation can be successful if the government authorities are involved. Facebook has allowed for people to exercise their rights of freedom of speech online. Conversely, Baidu is the local company that has been rated the most heavily utilized search engine in China; however, it aggressively censors the content. Moreover, the Human Rights Watch has raised concerns about how Facebook is going to safeguard the rights of its users in many nations including China. This group suggests that firms like Facebook need to put in place effective policies as well as procedures that protect human rights online. It also holds that the policy helps in ensuring that the firms respect human rights of the customers and users.

Assets

The key asset that the company in question has is the censorship instrument that helps in the achievement of its entry into China market. Facebook also developed software that makes sure the posts are suppressed from appearing in the news feeds of the users in certain geographies. Facebook has also spent a lot of resources to study the country’s dynamics. In addition, the government policy and laws on social media constitute the greatest asset for the country. It has been noted that the company can access, share, and also preserve user’s information to address the legal request since they are made aware of what the law needs them to do. Also, the information of the users is the company’s asset that needs to be protected. Facebook is targeting Baidu.com because of its popularity among the local companies. The greatest asset that Human Rights Watch include its ability to ensure the companies offer protection to the rights of the users of their services.

The Political Forums where the Issue is Likely to be Addressed

The company’s effort to enter China relies on several arenas that must be dealt with for its marketing plan to be successful. Most importantly, the arena to be considered is the political forums where the issue is likely to be addressed. The issue surrounding the entry of the company has encouraged government criticism based on the fact that the censorship in China permits it. Notably, the government of China, influenced by political leaders, has designed a program that limits the Chinese people’s freedom of speech as a way of addressing the issues associated with censorship resulting from social median (MacKinnon, 2012). This program is important for the government since it helps it reduce the incidences of the people criticizing the poor performance of the company on social media. In effect, the government of China has come up with a collective action potential, which only allows people express themselves collectively.

This company makes it possible for people to communicate on the social media on a common subject, and particularly the actual collective actions including protests and the events that can lead to any form of collective action. In this case, the “Great Firewall of China” has been used by the government to disallow some websites to operate in the company (MacKinnon, 2012). As an illustration, Facebook has been blocked in China, and thus, RenRen became a substitute, though has not been available. Additionally, keyword blocking approach has been suggested by the government to prevent a user from posting the texts that bear restricted phrases or words. The situations depict that foreign firms in China, including Facebook encounter political pressure from a variety of regulations. As a matter of fact, the military newspaper of the nation refers to the internet as the most vital front in an ideological battle opposing the “Western anti-China forces” (Technology News, 2016).

The media has also played a critical role in spreading rumors that Facebook has created a platform for many cybercrimes to take place and also viewing of the content that is unacceptable such as pornographic materials. Such allegations have led to the organization’s struggle in the recent years where it has been reported that Facebook eliminates some content on its service unfairly and thus posing human rights issues to its users (Muncaster, 2012). In spite of this situation, the company aims at continuing to grow in the developing nations including China where its penetration has been smaller.

Bargaining Context

Notably, there is an increasing concern about a bargaining context existing between Facebook and Human Rights Watch, where the latter has warned the former that it could turn out to be complicit in government censorship. In a similar vein, the efforts of both have been believed to stifle online organization as well as obtaining the personal information of online critics or cyber-activists of the Chinese government (Muncaster, 2012). For instance, the company has been in contact with the Human Rights Watch concerning the letter, which was sent to the firm to respond to the concern of the way it will protect human rights online in China like any other part of the world. Further, the entry of Facebook into China calls for an effective bargaining process between the company and the Chinese government as well as the local firms like Baidu.com. The information provided indicates that the entry and survival of Facebook depends on the government policies and regulations governing the content of the internet technological firms with a view to protecting the human rights of the users. The Chinese government has required that Facebook says publicly how it intends to protect the human rights of the people prior to entering the Chinese market (Horwitz, J. (2016). Additionally, the bargaining process between Facebook and the Chinese government started right from the time Facebook was blocked with allegations that protection of the user’s information was not guaranteed. On the other hand, the organization intends to enter a partnership with local companies like Baidu.com. This partnership has resulted from the Chinese government’s requirement that the domestic firms should partner with the foreign companies in the formation of local counterparts.

Nonetheless, the services provided by Facebook may be threatened by the presence of the competitors who are already established in the China such as “WeChat.” Most Chinese citizense have utilized this form of social media for communication as well as making purchases, booking appointments with doctors, and hailing taxis, and thus, it is difficult to avoid “WeChat” while making any entry strategy. However, it requires little effort for Facebook to make “WeChat” come to its knees. In this case, Facebook only requires to capture a small portion of the largest Internet market in China to generate reasonable revenue to outperform any other social media service provider in the nation (Technical News, 2016). No doubt, the domain in which Facebook operates cannot allow WeChat to thrive in a competitive market. In other words, Facebook is a global identity while WeChat only stands out in China. 

Range of Outcomes

The outcomes predicted in this context seek to improve the bargaining position of the company in China. First, the company has predicted its growth in the developing nations where there are smaller rates of penetration at the moment. In this connection, it has been asserted that Facebook may enter new international markets where it is limited or no experience in selling, deploying, and marketing its products, and thus its continued efforts to purpose entering China. Additionally, Facebook’s entry into China will result in the world being more connected and open. This argument gains support from the fact that connectivity is important in spite of the sacrifices that have to been made along the course of the participation in the Chinese censorship (Horwitz, 2016). The company will be well established in the country considering the fact that it will provide a platform to address the legal concerns that have been raised on its need to safeguard the human rights of the users in the China.

Strategy

Zuckerberg reveals the intention of the firm as connecting people around the globe as a greatest strategic element by using its advertisement platforms (Technical News, 2016). Facebook plans to develop software whose aim is to help the third party in monitoring trending information online. The company also capitalizes on the extensive opportunities that is present in China, although this has not been fully exploited (Muncaster, 2012). Additionally, the organization’s interest has been to enter new international markets, it has limited or no experience in selling, deploying, and marketing of its products, like China. The firm’s focus is currently on assisting the Chinese businesses as well as the developers to expand to new markets in and outside China by utilizing its advertising platform.

Another marketing strategy is the company’s ability to counter its local competitors who have proved to be fierce in the country including social networking sites such as Sina, Tencent, and RenRen (Muncaster, 2012). For instance, Sina has attained most of the parts of China and the neighborhood because of its microblogging service called Weibo. Also, Facebook has considered partnering with the China’s largest tech firms like Baidu to aid the marketing of its product. Additionally, product development has been another marketing consideration that Facebook has utilized, where new software that allows a third party to keep the track of the popular stories, as well as topics, has been developed (Muncaster, 2012).

Moreover, its nonmarket strategy also plays a critical role in the company’s decision on its entry in China. One of the key strategies of this category is the compliance with the Chinese government’s regulations regarding the security of the user’s human rights. In this case, Facebook has resorted to complying with the government’s policies concerning the content on the social media platforms (Horwitz, 2016). Also, the strategy of the firm borrowing from the playbook of Chinese rival has created more opportunities for Facebook to enter China market.

Conclusion

There are increasing concerns about the recent efforts by Facebook to enter into China as a new opportunity for its global market expansion using social media as one of its verticals. It is worth noting that China has the largest market for internet technology organizations like Facebook. Nonetheless, there are challenges that company must face to makes its entry to the country. Such challenges include its inability to safeguard the human rights of the users, government regulations on the content posted on the social media platforms supported by the company, and the competition from the already established local firms that provides the social networking sites, such as RenRen and Sina. Therefore, it is important for the company to address these aspects to successfully enter the Chinese social media market. 

References

Horwitz, J. (2016). The only way Facebook enters China is as a tool of the government. Retrieved from https://qz.com/644588/the-only-way-facebook-enters-china-is-as-a-tool-of-the-government/

Human Rights Watch, (2011). Facebook: Safeguard users before entering China market: a critical step to avoid abetting a crackdown on dissent. Retrieved from https://www.hrw.org/news/2011/06/03/facebook-safeguard-users-entering-china-market

MacKinnon, R. (2012). Consent of the networked: The worldwide struggle for internet freedom. New York, NY: Basic Books.

Muncaster, P. (2012). Facebook’s IPO unveils plans to invade China: Social network would love to tap that. Retrieved from https://www.theregister.co.uk/2012/02/06/facebook_ipo_china_plans/

Technical News, (2016). Facebook builds censorship tool to attain China re-entry: NYT. Retrieved from

http://www.reuters.com/article/us-facebook-china-idUSKBN13I03H

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