Snapchat Inc. is one of the most successful organizations in the social media industry (Snapchat.com 2018). This report will help in understanding the structure and characteristics of the selected organization and at the same time will highlight the principles of modern management. Moreover, the interrelationship between business environment, functional management and strategic objectives will be discussed here. Primarily, the organization will be introduced followed by its detailed structure. After all these, benefits and drawbacks of a specific modern management approach will be discussed along with cultural web analysis. Finally, two strategic management approaches taken by Snapchat will be discussed.
Snapchat is the multimedia mobile application that operates in both iOS and Android platform. The core product of this organization is its free app that the users mostly prefer for sharing media, especially pictures. Snapchat is operating on the social media industry and by giving free access to its users; it has drawn huge attention globally. The application was released in 2011 and now it is competing with Facebook and Instagram. The company was established by mixing the business ideas of Evan Spiegel, media entertainment ideas of Reggie Brown and coding ideas of Bobby Murphy. Currently, its maximum revenue is collected from the digital advertisers and with the Geofilter feature; it has started gaining more response from investors and other partners (Snapchat.com 2018).
The core purpose of this organization is to share entertainment among users digitally by accessing the camera of smartphones. Users mostly use this app for fun purpose whereas company ensures great privacy through one-to-one message encryption technology.
Figure 1: Snapchat Scope and Scale
(Source: Velten and Arif 2016)
From the above image, it can be said that the organization is growing rapidly each year and is standing at the 4th position in social media industry. Therefore, it has huge scope for market expansion in future as well. On the other hand, Fortune (2018) pointed out that fourth-quarter revenue of Snapchat jumped to 72% on 6th February 2018. Moreover, with 8.9 daily active users it is gaining the biggest quarter-to-quarter jump.
Figure 2: Organization Structure of Snapchat
(Source: Lee, Kozlenkova and Palmatier 2015)
From the above figure of organizational structure, it is evident that Snapchat Inc. follows functional organizational structure. As per this organizational structure, Snapchat groups their employees as per their areas expertise. Moreover, these people are supervised by functional heads having expertise in the same field. Each department of the organization has its own departmental heads like chief operating officer, information security head, business development head, marketing centre, finance centre and engineering centre (Tseng and Lee 2014). The chief operating officer is responsible for supervising and tracking the performance level of the HR, advertisement, public policy and remote application department. On the other hand, Finance centre and marketing centre head is responsible for supervising and maintaining the performance of finance department and marketing department. In such organizational structure, the employees can apply their expert knowledge and skills to their respective department for enhancing the performance of department under direct supervision of department head (Reitzig and Maciejovsky 2015).
Situation management approach builds the theme that there is no single best way of managing a situation that may be applied to all managerial situation. As per this management approach, management approach depends on the peculiarities of situation and adopts the approach that yields best results under a particular circumstance. While applying this approach on Snapchat Inc, there can be both benefits and drawbacks on its managerial decisions.
More Control over Current Situation
Situational management approach allows the managers to adopt strategy based on the current situation. Moreover, the managers need not to be overburdened with preparation of strategies for controlling future situation. Moreover, Snapchat can adopt customized approach as per the current situation of the market for gaining more control over the current market situation (Krupa and Wi?niewski 2015). Hence, this approach can help the organization to have powerful strategy for beating the current market crisis and use current market opportunities.
Flexibility
Managers are often scared of preparing strategies for dealing with unexpected matters of future market condition. However, situational management approach gives the managers the freedom and flexibility of choosing strategies based on the current market situation. Moreover, the managers of Snapchat may feel more prepared with situational approach for dealing with the current market situation.
Diversion of Focus
Situational management approach is always based on the current situation of business. It has less relevance and connection with past and future condition of market. Hence, while applying this approach, the managers of Snapchat can be diverted from the long-term strategies for the organization. It can ultimately hamper the success of long-term organizational goals of the organization.
Lack of Readiness
In situational management approach, the managers take instant decisions as per the peculiarities of the current market condition. Hence, the employees may not get much time to make themselves ready towards the execution of the strategies (Thompson and Glasø 2015). In this way, the effectiveness of strategy execution may get hamper in situation management approach.
Johnson & Scholes Cultural Web Framework has identified six elements for assessing the culture of an organization. Among all the six elements, three elements are described in the following to assess the organizational culture of Snapchat. The “3-picture narrative input chart story” in Appendix 1 describes the organizational culture of Snapchat.
Power structure is actually defined by the pocket of real power within an organization. Moreover, it shows the distribution of organizational power among the groups of people within an organization. According to Denison, Nieminen and Kotrba (2014), most powerful organizational members are likely to be associated with cultural paradigm. In case of Snapchat Inc, the organizational power is equally distributed among the groups of people within an organization. The employees have equal power to share their views towards organizational success. However, the core power of taking high level of business decision is limited only within the business executives and CEO of the organization.
Stokes, Baker and Lichy (2016) pointed out that Symbol of an organization carries a particular meaning recognized by the organization that shares a culture. On an ironic note, the faceless ghost symbol of Snapchar represents the fact that even though the users cannot see their photos anymore does not mean they are actually gone. It also represents the diversity of expression of the people to be shared among each other.
Snapchat has an effectively organized control system for achieving organizational success. The financial distribution of the organization is done in highly an organized manner through the order from the treasure and audit head. Likewise, the managers of Snapchat uses reward system for organizing and enhancing the productivity of the employees.
Innovative strategic management objective and framed with an intention is to achieve the strategic goals of organizations. Innovative strategic management objective of Snapchat Inc has led to its success within shorter period. The two most important innovative strategic management objectives of this organization are the followings:
These two innovative strategic management objectives of Spanchat can be explained through using Porter’s Generic Strategy Matrix.
Cost Leadership Strategy
As per cost leadership strategy, organizations either sell their products or services at average industry price for gaining higher profit over their rivals or sell their products or services at below the average industry price for gaining high market share. Snapchat has adopted cost leadership strategy for achieving their strategic objective of increasing media dominance and marker share. In this strategy, Snapchat Inc. has adopted Freemium pricing policy for maintaining a powerful hold in the industry. As per this strategy, the users can download and use the Snapchat app at free of cost, but they may need to pay for availing additional features and services (Bettis et al. 2016). In this way, the organization is being able to gather more number of users using their app, which can definitely help it in achieving the strategic objective of increasing media dominance and market share.
Differentiation Strategy
Differentiation strategy suggests development of products and services, which offers unique value to the customers. Differentiation strategy leads to improvement of products and services for gaining high level of competitive advantage. Hence, Snapchat had adopted differentiation strategy for achieving the strategic objective of improving service approach to new and existing customers. As per this strategy, Snapchat Inc. offers unique ways to the users for expressing their feeling through unique symbols. It also allows the advertisers and media companies to create their individual stories through featured title Discover (Bettis et al. 2014). Apart from that, attractive stickers, GIFs, audio and video calling have added unique value to the life of users.
Focus Strategy
Snapchat has targeted the tech savvy people and advertisers for offering their unique service of interacting with people. In focus strategy, the organization has adopted differentiation strategy of offering unique features of services for enhancing the quality of life of the people. Hence, this strategy can also help the organization to achieve their strategic objectives.
Figure 3: Porter’s Generic Strategy
(Source: Tseng and Lee 2014)
Conclusion
While concluding the study, it can be said that Snapchat Inc. follows functional organizational structure. As per this structure, the employees are grouped as per their expertise and they work under one functional head. The situational management approach can be highly effective for having huge control over current situation. As per the cultural web framework, core power making high-level business decision is limited within the CEO and business executives. The organization has adopted cost leadership strategy for gaining median dominance and increasing market share.
References
Bettis, R., Gambardella, A., Helfat, C. and Mitchell, W., 2014. Quantitative empirical analysis in strategic management. Strategic Management Journal, 35(7), pp.949-953.
Bettis, R.A., Ethiraj, S., Gambardella, A., Helfat, C. and Mitchell, W., 2016. Creating repeatable cumulative knowledge in strategic management. Strategic Management Journal, 37(2), pp.257-261.
Denison, D., Nieminen, L. and Kotrba, L., 2014. Diagnosing organizational cultures: A conceptual and empirical review of culture effectiveness surveys. European Journal of Work and Organizational Psychology, 23(1), pp.145-161.
Fortune. 2018. Snapchat Touts Redesign as Surprising Revenue, User Growth Send Shares Soaring. [online] Available at: https://fortune.com/2018/02/06/snapchat-revenue-user-growth-rebound-snap-stock/ [Accessed 6 Mar. 2018].
Krupa, T. and Wi?niewski, M., 2015. Situational management of critical infrastructure resources under threat. Foundations of Management, 7(1), pp.93-104.
Lee, J.Y., Kozlenkova, I.V. and Palmatier, R.W., 2015. Structural marketing: Using organizational structure to achieve marketing objectives. Journal of the Academy of Marketing Science, 43(1), pp.73-99.
Reitzig, M. and Maciejovsky, B., 2015. Corporate hierarchy and vertical information flow inside the firm—a behavioral view. Strategic Management Journal, 36(13), pp.1979-1999.
Snapchat.com. 2018. Snapchat – The fastest way to share a moment!. [online] Available at: https://www.snapchat.com/ [Accessed 6 Mar. 2018].
Stokes, P., Baker, C. and Lichy, J., 2016. The role of embedded individual values, belief and attitudes and spiritual capital in shaping everyday postsecular organizational culture. European Management Review, 13(1), pp.37-51.
Thompson, G. and Glasø, L., 2015. Situational leadership theory: a test from three perspectives. Leadership & Organization Development Journal, 36(5), pp.527-544.
Tseng, S.M. and Lee, P.S., 2014. The effect of knowledge management capability and dynamic capability on organizational performance. Journal of Enterprise Information Management, 27(2), pp.158-179.
Velten, J.C. and Arif, R., 2016. The influence of snapchat on interpersonal relationship development and human communication. The Journal of Social Media in Society, 5(2), pp.5-43.
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