Question:
Discuss about the Advantages and Disadvantages of Using Social Networks in Business.
The use of social media and social networking sites has risen which has resulted in increased customer base across the globe. Using social networks is also of huge importance in developing strong communication between the organisation and the consumers. Social networks have brought transformation in the way the business entities perform and operate. There are numerous authors that have highlighted the impact, pros and cons of social networks on the business in the past literature.
There is a vital role of social media applications, social networks and the various recognized social platforms for developing the business organisations and to achieve increased global presence. Irrespective of the size whether large, medium or small, all types of business enterprises and influenced by the presence of social networks either in a positive or a negative manner. Internet is considered as significant part of the human lives without which they are sound incomplete in the present scenario as it serves various purpose such as shopping, mailing, educational work, employment, etc. The rapidly increasing use of the social networks and internet has demonstrated a significant growth of the technological sector as it has an extreme optimistic impact for the business organizations and the entrepreneurs to achieve upsurge global presence (Celine, 2012).
There are several meanings of social network in the general sense which has been explained by the researchers in context with different scenarios but to understand it from the business perspective, social network is the interpersonal relationship between the business organization and the other individuals whether being customers or other group of people (Kadushin, 2012). Existence of social network in the business is because of two key reasons i.e. for the transferring of information and for facilitating that info. Maximum of the organisations are taking use of the social networks for managing their marketing functions. It is essential for the marketing executive of the organizations to comprehend and analyze the cons and pros of using social networks for the business purpose (Parveen, 2012). The application of social network can be more explained as the source by which there is interaction among the key customers and the organisations or the businesses which includes the development, sharing and generation of the various business contents. Earlier the media was helpful in terms of offering the content only but in present time with innovative technologies and social networks there is increased support of the social network sin promoting the businesses and the associated products and the services. It is very helpful is achieving high customer engagement and involvement. The researchers have emphasized on wide variety of the social media that initiates from the personal social networks like yammer, social cast, and jive to the extensive social networks that comprises of recognized names like Facebook, LinkedIn and various other. The social networks that offer wide range of information i.e. the content social networks that include YouTube, Wikis, etc. YouTube (Casson and Giusta, 2007).
(Source: Paniagua and Bolufer, 2014)
The authors have developed a theoretical framework upon the impact of social network and social media on the business performance. According to this framework there are various social media sites and platforms that offer the chance to build a strong social network which has a direct impact upon the businesses which can be both positive and negative. The business associates or entrepreneurs choose the most preferred and appropriate channel of social network for satisfying the needs of the business and to have continuous growth. The authors and researchers have identified numerous advantages and positive outcomes of taking use of social network in the businesses (Harris and Rae, 2009). The key and the most recognized advantage is the extensive reach to increased number of customer bases. It has been observed that all the organisations are not much financial sound and thus there is lack of capital investment which results in barricades on the path of organizational success and business expansion. In that case, the use of social networks helps them in building a strong and big channel with no or just limited cost (Celine, 2012). With the support of social media technologies and the social networks in the business, there can be effective selling of the products and services at various regions of the world. Targeting the overseas potential customers becomes feasible and easy through the use of social networks. Therefore, it can be stated that the use of social networks helps the businesses and specifically one with small scale operations to have increased customer bases and global presence (Park, Kee and Valenzuela, 2009).
The next advantage of social network highlighted by the authors in their literature is the flexible approach. Because of the issues such as restricted capital and less known brand name in the international regions, there are numerous trade restrictions that act as the barricade for the businesses to have a sustainable global expansion. With the occurrence of the social networking, these issues has been resolved as with the having combined use of social networks and businesses practices there is no rigidity and barricades in entering global markets as it has developed several platforms on which business trades can take place (Michaelidou, Siamagka and Christodoulides, 2011). In the online market as an initiative of social network, there is no kind of entry restrictions and the trade barriers and also if offers advantage of having a reach to large business platforms without offering any kind of monetary fee to these platforms for initiating business. This gives an additional advantage to the small enterprises to serve globally and have development of their business. Another benefit of social networks is that these networks support in enhancing the brand loyalty (Cross, et al., 2004). The more and high the number of followers there will be, there is probability that these customers will have a reliability towards the brand. The potential customers or the individuals who follow the brand by the mains of social networks are the most potential customers of the business and social networks offers the advantage to the business to have followers from across the world (Kirti? and Karahan, 2011). With the increased brand visibility through social networking sites, the customers get connected to the brand and it results in increase sales and market share and brand recognition. It is utmost difficult to analyze and evaluate the competitors’ moves and strategies (Parveen, 2012). With the help of the social networks it is easy to get info about the strategic and competitive moves of other organisations. It is the key advantage of social network for the businesses to fetch relevant info about the taste and need of the customers and information about the key competitors. And therefore, it helps the organisation in formulating adequate strategies to sustain the market competition (Valente, 2010).
(Source: Kash, 2013)
Many of the researchers have emphasized on one of the primary advantage of social networks i.e. to build strong association by the means of trust, efficiency, relevance and access. To achieve increase sustainability, the businesses required support from the social connections for growing. Access to a broader set of consumers is by the means of an effective communication channel. Social networks benefit the businesses by developing a two way communication where there is high involvement of the customers (Cheung, Chiu and Lee, 2011). The improved association and building of association results in attaining more number of reliable customers as the two way communication helps in solving the issues of the customers. These customer groups because of regular interaction and engagement do not easily switch to the competitors’ products and because of social network stay connected to the businesses. Another technological advantage attained by the businesses is that the rates of conversion becomes higher as because of an enlarged area for business trading, the companies have numerous opportunities to diversify their existing business and try something new (Leonardi, Huysman and Steinfield, 2013).
There are numerous ways with the help of which the business can achieve increase visibility and recognition such as content, various blog posts, images, comments and videos. All these things are the part of social networking that offers promotional advantages to the businesses. With higher conversion arte and robust social networks, the possibility of modifications in the business operations increases and thus, there are several opportunities for the businesses to go for (Edosomwan, et al., 2011). The businesses can manage the production and sakes of the products which are not in high demand or can increase the supply of the products that have huge demand. All these data can be easily gathered by the means of social networks that whether people have liked the products and services or not. Other few advantages of special networks in business comprises of increased efficiency as relevant info is collected in a more rapid way, relevant connections as through sound social networks there can be develop strong presence which helps in finding adequate vendors or suppliers, achieving modifications in the operations and extended network (Molina?Morales and Martínez?Fernández, 2010).
By having a different view point; few authors have demonstrated the negative implications of the social networks in the business in their research and literature. There has been emphasized the disadvantages of social networking in the businesses such as the key drawback is negative feedback from the customers’ side. To maintain and manage the goodwill of the brand image is the most essential element for the small as well as for the big companies. The customers analyze the products and services by its brand image. To achieve long term sustainability and high number of customers, it is essential to have a strong brand image (Sashi, 2012). With the global reach aspect of social networks, if the consumers have posted negative feedbacks, comments or any such thing then it turns out to be disgraceful for the businesses as the brand imaged gets deteriorate (Shabbir, Ghazi and Mehmood, 2016). It affects the potential customer who were about to buy the products but due to negative publicity they does not purchase products from that specific brand as the get impacted because of the negative reviews. Therefore, the business possesses a great threat of getting the brand image ruined. There are also other various disadvantages of the social network for the businesses as highlighted by the authors in the next part.
With the arguments against the above explained positive side of social networking in the businesses, the authors have highlights another disadvantage of social networking that it is very much time consuming (Gronum, Verreynne and Kastelle, 2012). The authors explained that instead of capital consuming, the social networks are time consuming as there is a need of large amount of time for managing the social networks on a regular basis. For developing robust social presence, the businesses require to spend high amount of efforts and time. For small enterprises it becomes difficult to manage as there is less number of people to manage all the activities. Thus, the shortage of time results in restricted growth. Another disadvantage of social network in business is to possess adequate and in-depth knowledge of the aspect before indulging in this. The most prevalent disadvantage is the select ion of an adequate social network (Vásquez and Escamilla, 2014). There is need of effective evaluation to understand that out of all the social networks which will be the most suitable and competent one. If an inappropriate network is selected then it can result in wastage of time and resources, staying uncompetitive as well as reduces the number of opportunities available for growing the business due to the past results. Thus, it is a must that the businesses must perform an appropriate analysis of the social networks as per the needs of the businesses so that they can be utilized in the most efficient manner (Hensel and Deis, 2010).
Conclusion
Social networks are considered as the innovative way for the development of the businesses. The businesses in present time are taking increased use of the social networks for having an expanded customer base and global reach. From the overall analysis and insights from literature, it can be concluded that use of social networks in the businesses has numerous positive implication as well as some negative impacts too. There are both challenges and opportunities the social networking offers to the businesses and it depends upon the way social networks are applied and use which determines the success or failure of the business operations. It can be stated that social networking is considered as the potential tool for growing and developing the businesses rapidly (Qualman, 2010). Other than the benefits like increased promotion, advertising and publicity, there are also certain other advantages of social networks for the businesses such as global reach, offering opportunities for achieving diversity, increased number of customers, brand loyalty, etc. As per the insights drawn from the literature it can be concluded that the businesses must be extremely careful while opting out for any social network to take use in the business as the outcomes completely depends upon the selection approach. Thus, to achieve maximum benefits, the organisations and the businesses must analyze the pros and cons if the social networks in an in-depth manner.
References
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