Good Research Paper About The Profitability Of The Company If It Is Not Strategically Aligned (Tarabishy & Pattern, 2012).
Impact of Social Media on Small Compared to Large Businesses
Impact of Social Media on Small Compared to Large Businesses
The use of social media such as Facebook, twitter, Pinterest and many more has gained popularity in e-business as compared to a simple blog. The need to maximize profits and still satisfy customer needs has forced small businesses to close up due to lack of capacity to compete large businesses.
Traditionally, businesses relied on one-on-one interaction with the customers and persuading them to buy products by hawking, displaying the products on banners and posters, advertising on radios and television. Lastly, businesses also tried using a simple company blog to interact with customers. Also, social media usage has replaced all these since technological evolution. However, the use of the social media is becoming an effective communicating channel. The use of the social media in business involves number of consequences and obstacles faced by the small and large business organization. Despite, social media have removed the barriers and increased interactivity of the organizations with its customers (O'Leary, Sheehan, & Lentz, 2011). Houlihan’s restaurant chain in US has significantly benefited from social media to compete its competitior Applebees which a larger restaurant chain that operates more than 2000 restaurants by the combination of social media campaign and email marketing. In the similar manner, Old Spice’s ROI has also increased through social media campaigns done by personalized videos and messages to gather attention of customers. Social media have casted a positive as well as the negative impact on the business. In terms of small business, one of the major issues that are faced by the organization is the unpredicted returns on the amount it invests for social media advertisements (Tarabishy & Pattern, 2012). On the contrary, the large business organization has to encounter increasing competition from local emerging small businesses. In addition, rumors, bad publicity, and unpredictable schedules are increasing with the increasing use of the social media. Especially, the larger organization is most affected by the social media viral and rumors, as it maintains it brand image and equity.
The need to reach high number of customers or clients and stakeholders by businesses, institutions, companies and other groups has necessitated an expansion in the way of communication. Similarly, technological advancement has played a greater role in ensuring this transition is successful. For instance, the development of web design software’s such as XHTML and HTML has accelerated the creation of websites. Integrating websites to reach various groups brought in the use of social media (that is internet) for communication.
Social media helps collect information from customers such as suggestions on the ways to improve products or services offered and customer complaints and demands such as loyalty rewards to those constantly using the products. It also bridges the gap between the business and the customer. For instance, communications about interruptions and changes in products and services reach customers easily. The use of the social media can be one of the cost effective mean for advertisement for large and small business. It has promoted businesses to improve their interactivity and communication with its customer. Moreover, marketing through social media websites, sharing of information and developing relation with its customers have significantly improved.
However, the small organizations invest extensively in social media marketing but the returns are often beyond the expectation. In other words, the returns on investments for the small business as compared to the expenses it incurs for social media market are higher. Hence, they face severe difficulties and challenges.
Through social media, a business can gain or lose market at the same time. Research shows that using social media is cheaper compared to engaging in traditional advertisement, and this ensures profit is realized by small businesses as well. There are number of business advertised on Facebook ads. The small business owners have invested a lot on the social media advertisement but has only increased their costs impact no returns on its investments and sales.
The case of McDonalds can be the best example to illustrate negative impact on the business because of the rumors on the social media. It can be observed that the larger organizations have lost the control over the content of the websites. Larger organization sustains its market image and reputation is often highly affected by the rumors that are often publicized on the social media forums. The organization has to face severe losses, and it also damages the market reputation.
Since, there is no control on a content of the social media and absence of regulatory individuals on the social media website. Negative comments and reviews are often posted by the company that can damage the image and reputation of the businesses. However, the small businesses are highly affected by this bad publicity. The comments and reviews can be misinterpreted by the customers can negatively affect the revenues and profitability of a business.
The larger organizations that are focused to make use of traditional marketing methods for advertisement have to completely revise their marketing strategies that can be costly procedure for the business (O'Leary, Sheehan, & Lentz, 2011). Despite the several attractive features of the social media usage in the marketing of the business, the returns of the company are not certain. The traditional sales are often dependent on the product description and consumption trends. Hence, the use of the level of returns expected from the social media usage for marketing is uncertain. It can be expensive and adversely affecting
In addition, one of the other major issues that are faced by the businesses to make use of social media websites is the unpredictable schedules. Social media campaigns are constantly changing and diverse it makes the scheduling unpredictable for the business to identify prevailing market trend. It eventually makes difficult for the organization to set its goals and objectives in a long run.
Conclusion and Recommendation
Carter, Jackie. (2014). Final Report on Social Media Strategies in Small Businesses. Centre for Enterprise, MMU
O'Leary, S., Sheehan, K., & Lentz, S. (2011). Small Business Smarts: Building Buzz with Social Media: Building Buzz with Social Media. New York: ABC-CLIO.
Stephanie, Jones. (2014). 5 Ways Small Businesses Can Make a Big Impact on Social Media.
Tarabishy, A., & Pattern, K. (2012). Information Technology for Small Business: Managing the Digital Enterprise. New York: Springer.
Please remember that this paper is open-access and other students can use it too.
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