In 2014, Twitter, the online messaging platform, was face to face with some difficult choices. Share...

 

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In 2014, Twitter, the online messaging platform, was face to face with some difficult choices. Share value had halved in the past year and many believed that the social network had peaked at around 20 percent of the size of Facebook. Twitter has been trying to find ways to boost the amount of time that users spend on the platform. It was actively looking to acquire online music services and, according to many, had set its sights on both SoundCloud, valued at $700 million, and Spotify, valued at $4 billion. In acquiring new and successful businesses such as those that offer music streaming services, Twitter would not only be enjoying its largest acquisition to date, but would also be securing new areas for growth. Acquisitions are, however, not new for Twitter. It bought the start-up Vine, a video-clip sharing service, in 2012, and recently acquired Gnip, a provider of social data. The problem is that Twitter is not profitable and may not have large sums of cash to acquire a music service. i. ii. Explain which product/market expansion grid strategy Twitter is using in order to keep up with competitors like Apple and Facebook. Discuss whether organic growth is more sustainable or whether companies should keep pushing their growth by acquiring other companies. In 2014, Twitter, the online messaging platform, was face to face with some difficult choices. Share value had halved in the past year and many believed that the social network had peaked at around 20 percent of the size of Facebook. Twitter has been trying to find ways to boost the amount of time that users spend on the platform. It was actively looking to acquire online music services and, according to many, had set its sights on both SoundCloud, valued at $700 million, and Spotify, valued at $4 billion. In acquiring new and successful businesses such as those that offer music streaming services, Twitter would not only be enjoying its largest acquisition to date, but would also be securing new areas for growth. Acquisitions are, however, not new for Twitter. It bought the start-up Vine, a video-clip sharing service, in 2012, and recently acquired Gnip, a provider of social data. The problem is that Twitter is not profitable and may not have large sums of cash to acquire a music service. i. ii. Explain which product/market expansion grid strategy Twitter is using in order to keep up with competitors like Apple and Facebook. Discuss whether organic growth is more sustainable or whether companies should keep pushing their growth by acquiring other companies.

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Twitter is using the productmarket expansion grid strategy of diversification Diversification involves entering new markets or developing new products ... View the full answer