The Big Idea: Strategy requires focus.
With a potential economic downturn, companies are being forced to make new strategic decisions.
Meta’s stock has declined over 60% in 2022.
Meta also posted its first ever revenue drop in Q2 of 2022.
What does this mean: Declining share price and a revenue drop mean that Meta must make new strategic choices.
Rising revenues and growing share prices allowed Meta:
- To invest in many programs like the Metaverse.
- To hire more employees growing the company to over 80,000 employees.
- To be aggressive with the government around disinformation.
Now?
Those decisions may need revisiting.
For you: Meta’s situation can teach us some lessons on strategy.
- Strategy requires choice. You can’t do everything.
- Strategy in turbulent times requires you to make new choices. The old stuff might not work.
- Right now, juggling more inputs is required. There are challenges coming from many directions.
The bottom line: Meta was able to spread itself thin for many years because of a growing business.
As that changes, Meta will be forced to rethink their business and the value they deliver to their customers.
Just like everyone else.
Go Deeper: A great strategy primer from Roger Martin.