Competitive Advantage through Social Media

Competitive Advantage through Social Media
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Contents TOC \o "1-3" \h \z \u Competitive Advantage through Social Media PAGEREF _Toc829370 \h 4Introduction PAGEREF _Toc829371 \h 4Background PAGEREF _Toc829372 \h 4Statement of the Problem PAGEREF _Toc829373 \h 5Purpose of the Study PAGEREF _Toc829374 \h 6Research Question PAGEREF _Toc829375 \h 6Importance of the Study PAGEREF _Toc829376 \h 6Social Media Marketing and Advertising PAGEREF _Toc829377 \h 7Social Media Literature and Business Competitive Advantage PAGEREF _Toc829378 \h 7Product Promotion Outlet and Competitive Advantage PAGEREF _Toc829379 \h 8i.The Revolutionary Theme in Social Media PAGEREF _Toc829380 \h 8ii.Promotional Mix PAGEREF _Toc829381 \h 9iii.Crisis Communications PAGEREF _Toc829382 \h 10Social Media information Collection Platform and Competitive Edge PAGEREF _Toc829383 \h 10i.Critical Communication Channels PAGEREF _Toc829384 \h 10ii.Information Sharing Communities PAGEREF _Toc829385 \h 12iii.Networking Platforms PAGEREF _Toc829386 \h 13iv.Feedback and increased competitive advantage PAGEREF _Toc829387 \h 13v.Information Confirmation and Blocking Unreliable information PAGEREF _Toc829388 \h 14Client and Business Empowerment and Competitive Advantage PAGEREF _Toc829389 \h 15i.Empowering Companies Promote Products and Services and Promoting Multiple Approaches and Promotional mix PAGEREF _Toc829390 \h 15ii.Brand Building and Enhanced Consumer Model PAGEREF _Toc829391 \h 16iii.Improving Client Experience PAGEREF _Toc829392 \h 16Managerial Implications PAGEREF _Toc829393 \h 17Conclusion PAGEREF _Toc829394 \h 18
Abstract
Social media platforms have grown considerably in the last decade with millions of users actively using different platforms regularly. Such platforms that exist today include Facebook, Twitter, Instagram, LinkedIn, YouTube, blogs, forums, among others. The impact of their growth has exceeded simple social networking and online communication to have vast implications in businesses and the corporate world. The transition to the use of social networks in firms has created an immense business opportunity as a paramount marketing factor capable of determining the success of a product, service or business. This study aims at establishing the effectiveness of the use of social media to attain a competitive advantage in an industry. The purpose of this study is to find out the efficacy of social media in achieving a competitive advantage. The research question for this study is: How can Social Media be used to obtain a competitive advantage? The study seeks to understand the influence of social media in business success and the value provided to customers for a longstanding competitive advantage. This non-empirical study involves review, analysis, and synthesis of social media and consumer behavior literature in establishing the effectiveness of social media in business. In this study, reviewed literature has confirmed that social media is significant in enabling enterprises to achieve a competitive edge through proper and proactive implementation.
Competitive Advantage through Social Media
Introduction
Background
The use of the internet has revolutionized how the world communicates and does business. Today, millions of people around the world use various web applications for entertainment purposes, shopping, communication, and social networking, dating, and so on. The opportunities presented by multiple web applications have dramatically changed the way businesses behave by adopting strategies to grow and reach a large clientele. Internet growth has also propelled the manufacturing and sale of digital communication devices such as smartphones, iPads, and iPhones thus promoting a new reality of digital know-how. According to Chaffey (2016), global internet users stood at 3.419 billion people, representing a 12 percent growth since 2015 (Appendix A). A driving force in digital communication is the thriving social media platforms that have spearheaded digital communication and social media marketing.
Social media platforms have grown considerably in the last decade with millions of users actively using different platforms regularly. Such platforms that exist today include Facebook, Twitter, Instagram, LinkedIn, YouTube, blogs, forums, among others. The impact of their growth has exceeded simple social networking and online communication to have enormous implications in businesses and the corporate world. The graduation of social media from a personalized consumer paradigm to a business-oriented space has created tremendous opportunities for businesses as well as generated jobs. Expert digital marketing strategies prepare businesses and business executives in establishing effective policies and programs that seek to implement a series of online activities meant to reach new customers (Wood, 2014). Leveraging on the social networks for commercial gain is now a determining factor in the success of businesses.
Consumer digital culture has become a significant business consideration as businesses seek to grow their sales and reach new markets. Millions of people have integrated the use of social media in their lives as a means of communication and social networking. As of 2016, the global active social media users stood at 2.307 billion people representing a 10 percent growth since 2015- Appendix A (Chaffey, 2016). The increase in usage of social networks has not gone unnoticed in the business world with businesses globally seeking a piece of the pie. Understanding the depth and impact of social media in promoting competitive advantage is critical in the success of companies today.
Businesses are tapping on the use of social media as a new marketing frontier that targets the increasing number of users. In America, for instance, it is estimated that 87 percent of adults use the internet compared to nearly 100 percent of college-educated and high-income adults similarly using the internet (Stephen, 2016). Stephen (2016) also observes that internet users have increased the time they spend on the internet. Social media use has contributed to the increase in the number of hours spent on the internet. In the UK, for instance, the number of hours consumed online by adults has more than doubled accounting for roughly 20.5 hours weekly over the last decade (Stephen, 2016). Online exposure is a gold mine to businesses that want to expand their business interests.
Statement of the Problem
Social networks have become a global phenomenon that has drastically changed how people communicate with each other, how businesses interact with their clients, and how an organization mobilizes sales and attracts a new client base. Before the social media boom, companies relied on traditional media such as newspapers, television, radio, cold email pitching and magazines. The transition to the use of social networks in firms has created a vast business opportunity as a paramount marketing factor capable of determining the success of a product, service or business. This study aims at establishing the effectiveness of the use of social media to attain a competitive advantage in the market.
Purpose of the Study
The purpose of this study is to establish the effectiveness of social media in achieving a competitive advantage. The use of social media has become prevalent with millions of users using the platforms to receive the latest news, socialize with friends and family, play online games, watch and share movies and TV shows as well as crowdsourcing purposes. Business managers have noticed the potential in growing their businesses by reaching out to the potential clientele with an immense online presence. Therefore, companies intend to build and monitor their brands by maintaining a professional online presence to interact with clients as well as reaching out to new clients.
Businesses invest considerable sums of money in marketing and advertising as a strategy to grow sales, promote business communication, and reach new customers. Understanding the digital frontier will unlock unlimited possibilities for businesses by recognizing the best policies and marketing practices to get and win over their clientele. According to Dwivedi, Kapoor, & Chen (2015), there are three critical aspects of social media: 1. the emergence of web 2.0, 2. social platforms that facilitate networking and marketing and 3. the large volume of information propagation necessitated by social media platforms. Understanding the three aspects will help us understand the effectiveness of social media in attaining competitive advantage in business.
Research Question
How can Social Media be used to achieve a competitive advantage?
Importance of the Study
The study seeks to help management and aspiring business leaders in engaging in a more profound understanding of companies that will enable them to create a competitive edge for their companies. The study seeks to understand the influence of social media in business success and the value provided to customers for a longstanding competitive advantage.
Social Media Marketing and Advertising
Marketers and advertisers continue to dedicate time and money to study the influence social media have on business success and how they can apply in their businesses. Knoll (2015) posits that there are about a quarter of the global population using social media platforms while more a billion people watch videos on YouTube on monthly, making the platforms powerful marketing and advertising tools for businesses. Relevant to our study is understanding what social media is and how it can be used to promote trade and attain a competitive advantage. Social media can be defined as the myriad of web-based applications “that build on the ideological and technological foundations of Web 2.0, and that allow the creation and exchange of User Generated Content” (Knoll, 2015, p, 266). The penetration and growth in the use of social media are essential in business applications and growth.
Marketers and advertisers are allocating significant portions of their budgets in social media use to increase their marketing and advertising impacts. According to Knoll (2015), advertising revenues were projected to grow from the US $4.7 billion in 2012 to roughly US $11 billion in 2017. The impact of social on business cannot, therefore, be underestimated. This non-empirical study involves review, analysis, and synthesis of social media and consumer behavior literature in establishing the effectiveness of social media in business.
Social Media Literature and Business Competitive Advantage
The use of social media by businesses and corporate institutions has a profound impact on their customer base and has the potential to influence how the companies communicate with their clientele. The growth in digital trends adopted by the business world is altering customer expectations during their interactions with the company through social media. Such communications are changing the way companies market their products and services to the masses. Apart from marketing, social media has improved customer relations with consumers getting access to customer service teams via social networks. By improving service delivery to customers, companies using social networks are reaping greater revenues than before. Social media platforms are critical in achieving a competitive business advantage.
Product Promotion Outlet and Competitive Advantage
The Revolutionary Theme in Social Media
As defined earlier, social media is a broad term that that encompasses some platforms and online activities including blog posts, forums, uploading photos and updating online profiles and more. From non-professional use of social media, regular people can interact with each other and with professionals working in organizations. Users without prior programming or coding experience can access and generate content on social media. Shao (2008) defines the revolutionary aspect of social media that is attributable to accelerated social media use. Through consumer-generated media (CGM), non-media professionals are enabled to generate and share content online quickly. The revolutionary features of social media platforms have allowed millions of users to frequent social media sites regularly. Companies are shifting advertising gears to adapt to the new advertisement frontier guaranteeing them of reaching new clientele and increasing their sales. According to Nielsen (2009), social media platforms have become the mainstream medium for both individual users and organizations in communicating with each other virtually replacing the traditional publishers. While pushing for products online, social media platforms have become the new avenue for capturing consumer attention and creating new clientele at a faster rate than the traditional media thus helping organizations achieve a competitive edge.
Promotional Mix
The use of social media in marketing has become widespread with companies embracing its use in large-scale. Integrating social media marketing in a company’s advertising policies and marketing strategies is a significant driver of increased healthy customer relations and reduced marketing costs. According to Mangold and Faulds (2009), integrating social media marketing has promoted a promotional mix that includes and supports various marketing aspects such as increased advertising, sales promotion, improved customer experience, increased exposure, and positive public relations as well as fostering direct marketing to clients. While it is not possible for an organization to control customer perceptions regarding a company, social media creates an eased relationship with the customer thus making it easy for a company to collect customer feedback. Through an efficient promotional mix, a firm can reach a large customer base as well as creating new relationships that lead to a new client base.
Integrating a strategic mix of social media marketing is guaranteed to yield positive benefits of implemented well. Dwivedi, Kapoor, & Chen (2015) note that success in business lies in identifying and developing a topology of social media marketing strategies that generally empower businesses, and whose objectives are aligned to the firm’s vision. An appropriate and effective promotional and marketing mix, therefore, emphasizes on reaching a more significant customer base, improving customer experience in their increased online presence, and creating stronger customer inclination and interaction.
Promotional mix also proves to be an effective business strategy that allows businesses to monitor customer feelings and sentiments at a far better rate than the traditional media. The findings were established by a study conducted by Vorvoreanu, Boisvenue, Wojtalewicz, and Dietz (2013) through social media analytics. The study confirmed that businesses using social media platforms experienced higher credibility than their counterparts due to their efficiency in handling real-time sentiment monitoring of users. A promotional marketing mix will substantially increase a company’s clientele base as well as the customers’ confidence towards the company. Also, the company will understand consumer behaviors better and make better investment decisions best suited for the customers.
Crisis Communications
Social media is a critical tool that can be used in times of crisis for communication. Rehman and Brooks (2007) note that preparing in advance to avert the potential disaster that can hurt the brand and image of a business is critical in determining the future success of a company. For example, negative news such as bankruptcy, mismanagement, or product failures that are likely to cause uneasiness and lack of confidence by shareholders, suppliers, and other stakeholders can be averted by positive and reassuring messages using official social media platforms. Additionally, companies using social media platforms can proactively respond to queries that are likely to cause panic and resolve such issues on time while shedding light to other concerned clients and users. As a crisis communication tool, social media is critical in placing a company at a suitable position to mitigate probable business risks and stay ahead of peers without social media thus creating a competitive edge for the business.
Social Media information Collection Platform and Competitive Edge
Critical Communication Channels
The integration of social media in society has provided multiple avenues in which companies can harvest essential user data. Businesses seeking to improve client-business relationship can get the client’s preliminary data from various social media platforms being used. Social media platforms can be used by organizations as feasibility study platforms when critical client information can be captured (Stephen, 2016). By learning user behavior via social media, businesses prepare appropriate and unique contact strategies best suited for individual clients...