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Essay: How does LinkedIn excel over its competitors? (SWOT)

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  • Subject area(s): Business essays
  • Reading time: 4 minutes
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  • Published: 14 April 2023*
  • File format: Text
  • Words: 960 (approx)
  • Number of pages: 4 (approx)
  • Tags: SWOT analysis examples

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Factors that enable a company to produce goods or services better or cheaper than its competitors are referred to as competitive advantages (Twin,2022). LinkedIn offers professional services as mentioned in the Foreign Entry Strategy, but how does LinkedIn excel over its competitors? In this section, SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis will be presented.

a.) Strengths

1. Competitive Parent Company

Microsoft ranked second among the most valuable technology brands in 2020, with a total of $327 billion in brand value (Wood, 2020). As stated, LinkedIn was acquired by Microsoft in 2016, and the company has shown massive growth since then. The ability of LinkedIn to connect the world with every professional and Microsoft’s purpose to empower everyone through their services can both be viewed as attempts to outperform the industry’s growing competitors.

2. Growing Online Members

LinkedIn has a significant active user base of over 830 million individuals in over 200 countries. This large customer base creates network effects that may boost the platform’s value and may encourage more people to join. If there is a growth in the number of active users, then customers’ loyalty will secure the company’s long-term viability, brand equity, and revenue.

3. Unique Product Offerings

LinkedIn is known for allowing individuals and brands to have profiles that may serve as virtual resumes for both job and business prospects. The company also offers different tools for professional purposes, like market research, business solutions, skills and talent, and job search. As a result, LinkedIn becomes more reliable, reputable, and has leverage for business networking because it serves as an effective tool for both brand growth and promotion as well as professional advancement.

4. Strong Business Niche

The core business of LinkedIn is in the professional niche. They create solutions that will ease the worldwide problem of high unemployment rates. The company has a few competitors because it uses its strength in professional networking. As a result, they may provide high-quality customer service, increase their clients’ loyalty, and build brand equity.

5.  Cost-effective

According to Satya Nadella, Microsoft’s CEO, LinkedIn’s revenue increased by 60% year-over-year. The company has worked hard to establish itself as a better option for business-related advertisements. In fact, in March 2021, LinkedIn’s advertising operations generated over $3 billion in revenue. This achievement surpassed its competitors who solely engage in the pure advertisement of a certain business (Business Strategy Insight).

b.) Weaknesses

1. Fake Accounts

LinkedIn relies on the information that users enter into its portals, and they may not be able to detect quickly when a rogue user enters incorrect data into their system. This exposes other platform users to malicious individuals who would take advantage of the site’s innocent participants.

2. Privacy and Security Concerns

Linkedin was sued in 2014 over its ‘invite your e-mails’ promotional tool. The brand claimed in its pleadings that it was exercising its right to freedom of expression by conducting the campaign, but the court dismissed these claims, ruling that LinkedIn’s acquisition of the emails and subsequent use of them without the owners’ knowledge was a violation of privacy. Despite the fact that this happened in 2014, it has stained the brand’s reputation and may cause uncertainty among new users when privacy is a top priority.

c.) Opportunities

1. Strategic Partnership

While LinkedIn has around 830 million users, it is still a small number when compared to other social networking sites such as WhatsApp, which has over 2 billion users. The company may collaborate with strategic brands such as mobile phone companies to increase growth in internet access and connectivity. Most individuals engage on the internet to promote their businesses or to find work. A little more outreach to more people could help the company expand its customer base.

2. Features Enhancement

LinkedIn is excellent at facilitating professional networking. Yet, it must continue to innovate its platforms in order to provide greater value to its customers, especially businesses and employees. They could enhance features like voice and video calls for customers’ better experiences.

3. Global Paradigm Shift to Virtual Working

Due to the pandemic, there is a massive transition in the working environment. Most companies offer the “work-from-home” set-up to their employees to continue their work in the comfort of their homes. This set-up is a completely virtual working environment. LinkedIn may use this as an advantage to provide its existing corporate clientele with a comprehensive experience that includes not just hiring or discovering a business online, but also enabling virtual work through its platform.

4. Increase in Market Penetration

Almost every country faces the challenge of an increasing unemployment rate. By matching business needs across the board, LinkedIn may provide better solutions to mitigate the problem of unemployment and gaps in low income. Since professional needs are the same across the globe, the company has the opportunity to expand its services to untapped sectors and regions, as well as to new markets.

d.) Threats

1. Fake Accounts

– LinkedIn members still have to deal with fake profiles. They might be hesitant to use the platform after encountering a malicious dealer or troll account. To prevent this, the company should implement stronger security measures to protect its platform and its users.

2. Cyber Security

LinkedIn is vulnerable to hackers and other cyber threats because it is hosted in the cloud—servers that can only be accessed over the internet. There is an urgent need for the platform to become more attentive and well-armed in order to avoid costly hacking incidents (e.g. data breaches, phishing, etc.).

3. Government Legislation

LinkedIn’s business model is based on selling personal data to corporations to help them with their recruitment efforts. Due to increasing threats in the virtual world, more government agencies are implementing rules and regulations to protect the data privacy of a consumer, and these instances may continue to hinder LinkedIn’s profitability.

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