Fwd SANCHIT - BAP32 A Final Examination Final file.docx -...

1
RISK MANAGEMENT ASSIGNMENT

2
Introduction
The report mainly covers the different implications of risk factors that are associated
with the social media networking company named Facebook. An analysis of the external
forces impacting the company has also been conducted. Moreover, the general and
specific forces affecting both the industry and the company has been highlighted and
justifications are being provided with context to that. The high priority risks concerning
that of Facebook are demonstrated and the specific actions that are taken by the giant
social media networking site in order to mitigate the risk factors have also been
specified in the study.
Task A
Analysis of the external environment impacting Facebook
The strategic analytical tool of PESTLE (Political, Economic, Social, Technological,
Environmental, and legal factors) has been helpful in pinpointing the external forces that
have been impacting Facebook in one way or another. In simpler terms, it primarily
involves a critical analysis of the various impact of the factors on the social media
website.
Political Factors
The political attributes play an essential role in ascertaining the scenarios which can
impact the long-term profitability of Facebook Inc. in a country or a market. Facebook
Inc. is known to be operating in various regions across the globe and it has been
subjected to different kinds of political environments and the risks of political systems.
The giant social networking site has been functioning well as a dynamic internet
provider of information and has been diversifying the systematic risks concerning that of
its political environment. The following factors have been closely analysed by Facebook
before investing or entering a market:
I) Significance of Internet Information Providers and political stability of the economy of
the country.
ii) Level of corruption with special focus on the different factors of trade regulation and
tariffs in the technological sector.
iii) Protection of intellectual property and legal framework for the enforcement of a
contract.

3
Economic Factors
Some of the macro-environment factors such as the rate of inflation, rate of interest and
savings, and foreign exchange have impacted and forecasted the growth of the
technology sector. In a hindsight, Facebook has taken into consideration the type of
system of economy in the countries of its operation and assessing the stability of the
economic system of a nation.