Free Facebook's Free Basics: Free in India? Case Study Solution | Assignment Help

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Written by Gary F. Smith
Publish Date: 2024-11-03

Harvard Case - Facebook's Free Basics: Free in India?

"Facebook's Free Basics: Free in India?" Harvard business case study is written by Reema Khurana. It deals with the challenges in the field of International Business. The case study is 11 page(s) long and it was first published on : Sep 1, 2016

At Fern Fort University, we recommend that Facebook adopt a nuanced approach to Free Basics in India, prioritizing a multi-pronged strategy that combines elements of free access with a commitment to digital literacy and infrastructure development. This approach will address concerns regarding net neutrality and digital divide while fostering sustainable growth and positive social impact.

2. Background

The case study focuses on Facebook's Free Basics program, a controversial initiative aimed at providing free internet access to underserved populations in developing countries. In India, the program faced significant backlash due to concerns about net neutrality and the potential for creating a two-tiered internet system. The case highlights the complex interplay between business objectives, social responsibility, and government regulation in the context of emerging markets.

The main protagonists are Facebook, a multinational corporation (MNC) seeking to expand its user base and influence in a key emerging market; the Indian government, grappling with the challenges of bridging the digital divide while upholding principles of net neutrality; and the Indian public, increasingly aware of the potential implications of internet access and its regulation.

3. Analysis of the Case Study

The case can be analyzed through the lens of Porter's Five Forces framework, which helps understand the competitive landscape and potential for success:
  • Threat of New Entrants: The Indian internet market is highly competitive, with numerous players offering mobile data plans. However, Facebook's vast user base and brand recognition create a significant barrier to entry for new competitors.
  • Bargaining Power of Buyers: Indian consumers have a wide range of options for internet access, making them price-sensitive. This puts pressure on Facebook to offer competitive pricing and data packages.
  • Bargaining Power of Suppliers: The bargaining power of suppliers (e.g., mobile network operators) is moderate. Facebook needs to negotiate favorable agreements for data access and distribution, but the operators also benefit from the increased user base and revenue generated by Free Basics.
  • Threat of Substitutes: The threat of substitutes is high, with alternative internet access options like public Wi-Fi and mobile data plans readily available. Facebook needs to differentiate its offerings to attract and retain users.
  • Competitive Rivalry: The competitive rivalry in the Indian internet market is intense, with players like Google, Reliance Jio, and Airtel vying for market share. Facebook needs to adopt a competitive strategy to maintain its position and grow its user base.

Additionally, the case highlights the importance of corporate social responsibility (CSR) in emerging markets. Facebook's initial approach to Free Basics was criticized for potentially exacerbating the digital divide and undermining net neutrality. This underscores the need for MNCs to carefully consider the ethical and societal implications of their business practices in developing countries.

4. Recommendations

Facebook should adopt a multi-faceted approach to its presence in India, focusing on:
  • Free Basics 2.0: Offer a streamlined version of Free Basics, focusing on essential services like healthcare, education, and government information. This approach addresses concerns about net neutrality while providing valuable services to underserved communities.
  • Digital Literacy Programs: Invest in digital literacy initiatives to empower users with the skills and knowledge to navigate the internet effectively. This will help bridge the digital divide and ensure that users can access and utilize online resources responsibly.
  • Infrastructure Development: Partner with local governments and telecommunications companies to improve internet infrastructure in rural areas. This will increase access to the internet for all citizens, regardless of their location or socioeconomic status.
  • Collaboration with Local Stakeholders: Engage with local communities, NGOs, and government agencies to develop programs that are tailored to the specific needs and priorities of the Indian market. This approach will foster trust and ensure that Free Basics aligns with local values and priorities.

5. Basis of Recommendations

These recommendations are based on the following considerations:
  1. Core Competencies and Consistency with Mission: Facebook's core competency lies in connecting people and providing access to information. This aligns with the mission of Free Basics, but the approach needs to be refined to ensure inclusivity and adherence to net neutrality principles.
  2. External Customers and Internal Clients: The recommendations cater to the needs of both external customers (Indian users) and internal clients (Facebook stakeholders). By addressing concerns about net neutrality and digital divide, Facebook can build trust and attract a wider user base.
  3. Competitors: The recommendations consider the competitive landscape in India, positioning Facebook as a responsible and innovative player in the market. By focusing on digital literacy and infrastructure development, Facebook can differentiate itself from competitors and create a sustainable competitive advantage.
  4. Attractiveness - Quantitative Measures: While quantifying the impact of digital literacy and infrastructure development is challenging, these initiatives have the potential to generate long-term benefits for Facebook in terms of increased user engagement, brand loyalty, and market share.

6. Conclusion

Facebook's Free Basics program in India presents a complex challenge that requires a nuanced and strategic approach. By prioritizing digital literacy, infrastructure development, and collaboration with local stakeholders, Facebook can address concerns about net neutrality and the digital divide while fostering sustainable growth and positive social impact in the Indian market.

7. Discussion

Alternative approaches to Free Basics include:
  • Complete withdrawal: This would avoid controversy but also miss the opportunity to connect with underserved populations.
  • Unconditional free access: This would address net neutrality concerns but could be unsustainable financially and lead to data congestion.

The recommendations presented in this case study solution are based on the assumption that Facebook is committed to a long-term presence in India and is willing to invest in sustainable solutions that benefit both the company and the country.

8. Next Steps

Facebook should implement the following steps to achieve its objectives:
  • Phase 1 (6 months): Launch a pilot program of Free Basics 2.0 in select regions, focusing on essential services and digital literacy training.
  • Phase 2 (12 months): Expand the program based on the pilot results, partnering with local stakeholders to develop tailored solutions.
  • Phase 3 (Ongoing): Continue to invest in infrastructure development and digital literacy initiatives, ensuring that Free Basics remains a sustainable and impactful program.

By taking these steps, Facebook can navigate the complex landscape of the Indian internet market and achieve its business objectives while fostering positive social change.

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Case Description

In February 2015, Facebook's Free Basics platform was launched in India by Internet.org, a partnership between Facebook and six mobile service and device companies. The platform was meant not only to enable Internet access on a smartphone but also to deliver low-cost Internet connectivity to the masses. Internet.org had already successfully launched Free Basics for a population of eight million people in nine countries across Asia, Africa, and South America. In India, however, the platform was not well received by a few eminent corporations and, more importantly, the Telecom Regulatory Authority of India. The launch of Free Basics stirred a nationwide debate about whether Internet.org was trying to control Internet services in India, creating an imbalance among the existing telecom service providers and causing a disproportionate development of business opportunities. Would Free Basics succeed in its goal, or would it be banned across India?

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