What does social networking mean to a firm?
Question:
Discuss about the Social Networks and Business.
Business Interactions has changed drastically with the concept of social networking. It is regarded as an innovative way to get connected with the public and the customers, and thus, it has become an essential tool for most of the enterprises. Many firms consider social networking as a “must to have” component in their business that will help in reaching out population (Eriksson, and Kovalainen, 2015). Currently, there are more than 3 billion people are active internet users, and out of which over 2 billion are having active social media accounts. This provides a real platform for the companies to promote their products and services that will be visible to a wider range of people (Rosemann, and vom Brocke, 2015, p.105-112). Monash University conducted a study to understand the connection between social media and business. The result concluded that the business firms of America have expanded by two to three times with the support of social media. Mostly, social media acts as one of the most efficient and effective marketing tool (Kristiansen, 2004, pp.1149-1171). It provides a platform where companies can share their messages and information to the people and instantly get the response to any kind of feedback. The concept of social media is flexible and requires less investment. Another survey conducted by Hubspot reported that about 92% marketing organizations confirmed a huge rise in their sales and marketing by social network marketing compared to their traditional way of doing business (Rosemann, and vom Brocke, 2015, p.105-112). They also added that their websites are facing increased traffics up to 80% which indicate people’s interest on their products and services. As of now, about 98% marketing business have their existence in some of the social networks, and about 87% firms are well-aware of the tools and methodologies that would be effective to be used in any social network.
Irrespective of the type of the country, its economic status, and cultural differences, social networking is having influence all across the globe. social networking demonstrates high potentiality of business expansion; at the same time, it can be proved as a source of various challenges. The current discussion will highlight on what does Social networking mean to a firm and the advantages and disadvantages of using social networks in business. The discussion will also include some literature references to understand the latest market happenings, current trends and viewpoints of various authors over the significance of social networking on business growth (Bryman, and Bell, 2015). The main objective of this discussion is to generate awareness among the people about how their personal interests are taken advantage off by the business firms. It will also help in conducting a market analysis and forecasting future scope of e-commerce or e-marketing.
Many entrepreneurs find social media an effective marketing and advertising tool that would help in increase in sales along with the expansion of their business. To some extent, this concept works well. However, there is various kind of gaps that would affect the effective implementation of social networking in the business (Rosemann, and vom Brocke, 2015, p.105-112). Some of them are been discussed below.
Advantages of using social networks in business
Use of right Social Media Platforms is one of the biggest gaps that would affect the business strategy. Twitter, Facebook, LinkedIn, etc. are some of the widely used social media platforms. The companies create a fan page in respective social network platforms, describing their products and services. They also provide details of their company and other related information to make the page look attractive as well as informative. These pages are character specific, and each character needs to be paid (Kristiansen, 2004, pp.1149-1171). At times, the investment done in such cases indirectly affects the consumers. Moreover, several risks are also associated with the use of social media for business purposes. The account gets affected by a lot of negative comments (Rosemann, and vom Brocke, 2015, p.105-112). No limitation or control is there over these negativities that will affect the name and brand value of the organization. Lack of control over the feedback damages the influence of the company. Unhappy customers show their frustration through non-constructive feedbacks, posts, pictures or offensive videos and pictures on the open forum, that directly impact the reputation of the organization (Bryman, and Bell, 2015). A huge gap in balancing the inflow of comments and feedbacks would risk the sustainability of the business, and it becomes a perception driven process. The risk of getting biased is also high in such kind of open forum where people follow the words and experiences shared by others on the internet.
A data drive approach was adopted by Basole and his team to understand the ecosystem dynamics of business. He highlighted the fact that social network can help in establishing a global connection that will encourage building relationships (Basole, Russell, Huhtamäki, Rubens, Still, and Park, 2015, p.6). Although, a well-established methodology is not there, this should be conducted under a safe and regulated environment. He further added, a virtual relationship also supports in developing different types of business ecosystems that not only encourage effective decision-making process but also shares international methods of performing business (Basole, Russell, Huhtamäki, Rubens, Still, and Park, 2015, p.6). Social network helps in sharing of business ideas and encouraging innovation to the business strategies.
Another good article was written by Khan and team about encouraging learning method that will be intended for Twitter sentiment analysis (Khan, Atique, and Thakare, 2015, p.89). Twitter is one platform that connects people and enables them to share their thoughts and emotions. Companies monitor their activities and offer then services and products based on the situation and emotional state. He highlighted the way how social media can track people’s emotions and act based on the situation. The social media networks are important platforms which are free to use with the paid advertisement options for the brands. Hence, if one wants to create the better social strategy, it is important to be familiarized mainly with the network runs and the kind of audiences, one reach on the network. With this, there is a need to create the successful social strategy with the business that can be used for the better profiling of the networks. In today’s time, there is a need to focus on the global companies which are coming as a part for the growing digital transformation of the business world with social network in the online and offline system. The employment opportunities and the immediate feedback from the media outlets have helped the people to get involved and interact on one-on-one level with the customers, peers and staff.
This part of the discussion will directly compare the major advantages and disadvantages of using social networks in business (Eriksson, and Kovalainen, 2015). It will compel the reader to analyze the limit up to which the social networking could be helpful or harmful. Below section will describe ten major advantages and disadvantages of using social networking in business.
- Helps in gaining valuable insights of the customers – Huge amount of data could be generated through social networks about a product or service to help the real time customer in deciding what to buy and what not to (Rosemann, and vom Brocke, 2015, p.105-112). It helps the customers in the faster decision-making process. Customers can do a search for something and gather relevant data that would help him in making smart decisions.
- Helps in increasing awareness of brand and loyalty – It helps the customers in easily locating the brand they are searching for and also helps in getting connected faster. Virtual connection and search process is much more efficient and effortless compared to physical search. Research says that customers who put the effort in finding a particular brand or company are often proved to be loyal to that brand (Bryman, and Bell, 2015). This helps in retention of the customers along with brand loyalty.
- Real-time results with run targeted and inexpensive ads – Companies invest a lot of money in advertisements and promotions. Social media provided a platform where they can promote their brands at limited or low investment (Rosemann, and vom Brocke, 2015, p.105-112). This platform also works on a target based audience that helps the companies to reach out to people with specific demographics, interests, location, behavior, etc.
- Helps in business expansion and increase in sales – Sales Best Practices Study of 2015 reveled that social media had helped the companies in increasing their sales along with higher customer retention through effective and regular communications and on-time customer services (Kristiansen, 2004, pp.1149-1171). It also helped in paving ways for new opportunities for business and other engagements.
- Helps in obtaining rich and helpful customer experiences – 24/7 availability and round-the-clock service have provided great customer experiences in social networking. Fast response time has influenced over 72% internet users to avail online services.
- Increase website traffic adds to increase in brand value – Website traffics gets higher if more people visits a particular website or company page. Higher the website trafficking, better is its brand value.
- Ease of locating competitors – Monitoring social media would help in having a track of the competitors and their strategies (Rosemann, and vom Brocke, 2015, p.105-112). This information would help in the critical business decision-making process.
- Content gets shared easier and faster – Information could be shared with people across the globe with just a click. This ensures that customer gets the information as soon as possible.
- Helps in keeping the content Geo-target – Sharing content with a specific audience and among interested group helps in reducing the lag time in reaching the right kind of people (Eriksson, and Kovalainen, 2015).
- Helps in building relationships – social networking provides a two-way platform for interaction that has reduced the communication gap and had encouraged the relationship building process.
- Proper selection of the appropriate network – Most of the companies struggle to choose the right social network that would add value to their promotions. Such confusions will delay the business decision-making process.
- Requires internet knowledge and appropriate skills – Handling professionalism on a social network required a great deal of expertise and in-depth knowledge (Eriksson, and Kovalainen, 2015). In such cases organizations invest to make the people well-versed with the internet operations.
- Requires lot of time investment – Although opening an account is easy and quick, but updating the information on a daily basis, handling customers and many more things involved in the process resulted in huge time investment in such strategies.
- The risk of negative feedback – Negative feedback damages the influence of the company (Kristiansen, 2004, pp.1149-1171). Unhappy customers show their frustration through non-constructive feedbacks, posts, pictures or offensive videos and pictures on the open forum, which directly impacts the reputation of the organization.
- Business risks – A part of brand management is being handed over to the social networking platform (Rosemann, and vom Brocke, 2015, p.105-112). This might increase the risk of loss of business confidentiality.
- Legal issues – Most of the virtual promotions do not disclose all the relevant information to the customers (Rosemann, and vom Brocke, 2015, p.105-112). This calls for issues related to compliance, polices, etc. Sometimes, these add to not reveal the hidden cost added to the product or service.
Conclusion
Many firms consider social networking as a “must to have” component in their business that will help in reaching out the population. Many entrepreneurs find social media an effective marketing and advertising tool that would help in increase in sales along with an expansion of their business (Bryman, and Bell, 2015). Social media help the companies in increasing their sales along with higher customer retention through effective and regular communications and on-time customer services. It also helped in paving ways for new opportunities for business and other engagements. It helps the customers in the faster decision-making process (Rosemann, and vom Brocke, 2015, p.105-112). Customers can do a search over something and gather relevant data that would help him in making smart decisions. To some extent, this concept works well. However, there is various kind of gaps that would affect the effective implementation of social networking in the business.
References
Basole, R.C., Russell, M.G., Huhtamäki, J., Rubens, N., Still, K. and Park, H., 2015. Understanding business ecosystem dynamics: a data-driven approach. ACM Transactions on Management Information Systems (TMIS), 6(2), p.6.
Bryman, A. and Bell, E., 2015. Business research methods. Oxford University Press, USA.
Eriksson, P. and Kovalainen, A., 2015. Qualitative Methods in Business Research: A Practical Guide to Social Research. Sage.
Khan, A.Z., Atique, M. and Thakare, V.M., 2015. Combining lexicon-based and learning-based methods for Twitter sentiment analysis. International Journal of Electronics, Communication and Soft Computing Science & Engineering (IJECSCSE), p.89.
Kristiansen, S., 2004. Social networks and business success. American journal of economics and sociology, 63(5), pp.1149-1171.
Rosemann, M. and vom Brocke, J., 2015. The six core elements of business process management. In Handbook on business process management 1 (pp. 105-122). Springer Berlin Heidelberg.
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