Research by: Qazi Imran Abid, Palin Rastogi, & Sandeep Puri
Abstract
By August 2024, Snapchat had surpassed 850 million monthly users and expanded its daily active users to around 397 million. Yet its parent company, Snap Inc., grappled with profitability challenges. Renowned for its ephemeral messaging, Filters, and Stories, Snapchat had carved out a distinct niche in the social media sphere and garnered significant popularity among younger demographics. Despite its appeal and cutting-edge features, the company faced hurdles in achieving profitability. This case provides an opportunity to discuss Snapchat’s financial difficulties, evaluate the effectiveness of its revenue model, and contemplate the strategic decisions required for the company to achieve long-term sustainability.
Learning objectives
This case is designed for undergraduate or Master of Business Administration Strategic Management Courses, particularly those focused on strategic planning for an organization’s long-term growth. Instructors can also use this case in a strategic management course to discuss managing the right tension, such as profitability versus growth or short-term versus long-term growth strategies.
After working through the case and assignment questions, students will be able to do the following:
- Analyze the tension between user growth and financial sustainability in social media platforms.
- Evaluate Snapchat’s business model and its effectiveness in monetizing its user base.
- Examine the role of innovation and feature differentiation in maintaining a competitive advantage.
- Evaluate the potential long-term consequences of prioritizing growth over profitability or vice versa.
- Develop strategic recommendations for Snapchat to address its growth and sustainability challenges.
To cite this case: Abid, Q. I., Rastogi, P., & Puri, S. (2025). Snapchat’s dilemma: Growth or financial sustainability. Ivey ID: W41223. London, Canada: Ivey Publishing.
To access this case: https://www.iveypublishing.ca/s/product/snapchats-dilemma-growth-or-financial-sustainability/01tOF0000077lSnYAI
