Developing Scenarios of the Future of the Social Networking Sector - Statistics Project Example

? BUSINESS PORTFOLIO DEVELOPING SCENARIOS OF THE FUTURE OF THE SOCIAL NETWORKING SECTOR STRATEGIC DECISION MAKING U51071 By College: Presented to: Date: Business Portfolio Systems thinking is a new and better way of testing ideas regarding social systems, the same way engineering systems are tested. This allows people to have a detailed understanding regarding social systems, and improve these systems in a way that people can apply engineering principles to understand and make improvements in mechanical systems (Aronson 1998, 1). While analysis of traditional systems allows separating of the individual details of what is being studied, systems thinking requires the whole scenario to be considered as a single interactive system, with its constituent components being discussed relating to how they interact with one another. This model considers the social network systems as interactive systems with different components that have to be considered, and how they interact with one another. The model as designed represents a technology push innovation. Technology push describes a situation where an emerging technology, or a set of existing technologies act as the driving force of an innovative product and mode of problem solution in the market (Herstatt & Lettl 2000, 2). In this case, the new social networking technology when transformed into a radical product or process innovation claims its own market positions. The use of social networking in social communication and in a business platform represents an innovation that has come into being out of research and development. The fact that technology push is marked by a higher market uncertainty requires different methods in social networking are required to win in a competitive market (Herstatt & Lettl 2000, 2). The changes in the proposed future models are incremental in nature in that the model seeks to design a model that it enhances a more effective use of social networking in communication, entertainment, and business environment. This follows the contingency theory in that any business model has to posses the flexibility required to respond to the external environment (Ho, Fang & Hsieh 2011, 658). The use of an incremental approach is because; in the current competitive market, companies have to apply business model innovations that respond to changes in the external and internal environments, and anticipate market needs in such a new environment to enhance value creation in serving customers. The type of reasoning used in this method was inductive reasoning. This is because; inductive reasoning requires increasing semiotics content in inferring information as one proceeds from premises to a conclusion (Wilheim 2004, 21). The various facts that affect communication in social networking as a social tool, or a business platform were considered when making an informed conclusion, constituting to an inductive reasoning. Evaluation: Systems thinking Summary of Osterwalder & Pigneur Business Model Canvas The advantage of the systems theory is its potential to offer a trans-disciplinary framework that necessitates normative and critical real relationships between human perceptions, and the worlds they purport to represent (Laszlo & Krioppner 1998, 3). Therefore companies have to employ business –models innovations aimed at responding to both internal and external changes, and in anticipating market needs in a process of creating value to customers. Social networking sites such as Facebook, Orkut, Bebo, and Twitter have millions of fans globally who visit these sites each month (Kazeniac, 2009). These sites have of late gained much attention and support from multinationals and other organizations in search of markets making it plausible to have an integrated platform that connects these social networks with business platforms to tap this rich market. The proposed model on the future of social networks offers in integration of factors necessary to enhance effective communication in both the social and corporate world. For example, students, companies, and universities all require an effective platform where all can meet for a common purpose in communication; such a platform has to be in line with technological developments, and which the future of communication and socialization depends upon. This will result in an interaction with interrelated components. To make a system that will offer value to customers, the setup will function as whole, as each element is affected by at least another element in the system, and all other subgroups in the interaction have the above two properties (Ackoff 1981, 15-16). Proper interaction of these factors results to creation of value proposition targeting specific customer segment in the market. In the proposed future model, the use of social networks in the communication process would entail reduced costs to the business community, students, and universities as the cost of communication would drastically reduce following the use of social chats, use of social networks for advertising and marketing, and use of social networks in effecting corporate communication. The figure below shows common social networks and their main usage. As Gharajedaghi (2011, 18) argues in the current value propositions, the question is not only how to produce but how to sell in the emerging markets, with a set of challenges that demands more diversity and variety, in addition to an increasing demand to manage size, growth, and complexity in such an environment. The validity of the above model in creating increased value proposition to customers is that the current business environment requires a holistic view on the management issue (Starkey & Tempest, 2009), due to the interconnectedness of the elements in a market that are required to enhance value proposition to customers. Piercy (2002, 12) argues that the recognition of each and every customer, and the value that the specific customer has to the company, amounts to a leading strategy in marketing, where a company persuades customers to use its services through perceived value proposition. This enhances the sense of loyalty in customers and is achieved through persuasion theory of marketing. Such usability of the model will increase customer base as more people in the current market are yearning for better and reliable communication platform; the model would be a versatile tool to enhance this is required by students, businesses, and universities in offering a platform where all their needs in communication, marketing, and advertising are met. In achieving these objectives, the future business model will effectively serve the following areas of commitment in the technologically driven market; social awareness through improved communication, critical awareness, use of sub methodologies in addressing specific tasks, and human emancipation, which seeks to raise the quality of life and work for persons involved in the above system model as Jordan (1998, 50) elaborates. Competiveness The future business model as proposed will be expected to have a competitive edge in the market and have a competitive advantage over other similar business models. One of the factors offering a competitive edge is that the model through its intangible entities will facilitate business to produce efficiently and effectively with increase value in some market segments. The value proposition to be provided in the business model largely guarantees the model a competitive edge in the market. The theory of competitive advantage is required to be heterogeneous within industries, with firms’ objective being superior performance and creation of value proposition to customers (Hunt & Morgan 1995, 3). In addition, the theory of comparative advantage states that competitive advantage in resources exists when resource of a firm and its assortment, which might be its competencies, allows it to produce to a market that when compared to its competitors would be believed to have superior value and can be produced at low costs (Conner 1991, 132). The distinctiveness in the products offered, or low cost of a company’s products are tied directly to the distinctive nature of its inputs and resources, in producing services or products (Conner 1991, 132). The proposed future model that places organizations in social networks would have an advantage of using cheap resources. The competitive advantage of such model approach will be obtained in that the perceived value of such integration would be higher as most social networks having numerous users through social interaction would be brought to a single platform. This implies having a wide platform where universities can fetch students and interact with them and businesses can advertise and promote their products and services. Moreover, the huge prospective market as more and more people embrace social networking sites in their daily lives would encourage more business to embrace this future model to tap the vast benefits accrued in such platform. This is because as firms struggle to come up with platforms that are involved in a constant struggle to achieve a comparative advantage in the market, the model will utilize current technologically developed social media to link universities, businesses, and students, which will result in creation of a large global platform that any university or business will be seeking to use to achieve their objectives in the future. The figure below portrays the factors that will determine the competiveness of this model in the market in the future, using the Five Porter’s Forces. (Source: Lima, 2006). The above figure shows a summary of Porter’s Five Forces. Porter (1985, 5) argues that when affirm is producing at large scale and at a lower cost, such a firm discourages other firms from entering the market, and reduces competition. The brand entity associated with the model as Porter argues will discourage other firms through producing a lower cost (Porter 1985, 5). As the figure portrays, the model is expected to be a unique one with no substitutes in the market, and as the switching costs would eventually be higher due to low numbers of competitors in the market, the model will be expected to have a competitive edge in the market as firms will remain royal to using the model and other perspectives ones will eventually join to take advantage of benefits accrued in this model. As Porter (1985, 5) argues the speed at which the market is growing provides less incentives to firms to offer an aggressive competition with each others in the market segment. The rapidly growing market in social networking will eventually reduce overall competition by firms offering similar services; implying the model will still remain viable and competitive in the future. The sustainability of a business model is measured by how well such a model will make an impact in the market. In the proposed model portraying the future of social networking and business environment, integrating social networks to a platform where universities, students and the business world will have a communication platform in either social communication or through creating awareness in marketing and advertising as explained portrays a model with high sustainability. As the model is as a result of a market push, the technological advancements in this field will be included and enhanced in the model; meaning that as these social networks improve, the business model will equally respond to these changes; making it to respond to technological changes in the market appropriately. This further will enhance sustainability of the proposed future model in the market. The use of social networks in the proposed future model would act as a value proposition approach to customers, as the social channels are many, reliable, effective, and have a high penetration globally; meaning companies to be associated with such social cites will have wider market scope, as compared to current marketing and communication approaches. This will result to an interaction with interrelated components to make a system that will offer value to customers in that the setup will function as whole. While students will have an enhanced communication platform that reduces the cost of communication in their universities through social networks in computers and phones the interactive model offers an interactive system that targets businesses, students, and universities. The enhanced communication model would attract customers through the value proposition indicated in the model. References List Ackoff, R.L. 1981. The art and science of mess management. Interfaces 11, (1): 20-26 Aronson, D., 1998. Overview of Systems Thinking. http://www.thinking.net/Systems_Thinking/OverviewSTarticle.pdf [accessed 29 April 2012] Conner, K., 1991. A Historical Comparison of Resources Based Theory of Finance and Five Schools Of thought Waiting Industrial Organizational economics: Do We Have a New Theory of the Firm? Journal of Management, 17, 121-154. Gharajedaghi, J. 2011. Systems thinking Managing Chaos and Complexity, MA: Elservier. Herstatt C., & Lettl, C., 2000.Management of Technology Push Development Projects. Technology and Innovation Management at the Technische Universitat. http://www.tu-harburg.de/tim/downloads/arbeitspapiere/Working_Paper_5.pdf[accessed 29 April 2012] Ho, Y.C., Fang, H.C., & Hsieh, M., 2011. The Relationship Between Business Model Innovation and Firm Value : A Dynamic Perspective. World Academy of Science, Engineering and Technology, 77. Jordan, J.S., 1998 (Ed.), Systems Theories and A Priori Aspects of Perception. Amsterdam: Elsevier Science. Kazeniac A. 2009. Social Networks: Facebook Takes Over Top Spot, Twitter Climbs. http://blog.compete.com/2009/02/09/facebook-myspace-twittersocial-network/ [accessed 29 April 2012] Laszlo A., & Krippner, S.,1997. Systems Theories: Their Origins, Foundations, and Development http://archive.syntonyquest.org/elcTree/resourcesPDFs/SystemsTheory.pdf[accessed 29 April 2012] Lima, T., 2006. Michael Porter’s Five Forces Model. Harvard Business School. http://www.cbe.csueastbay.edu/~alima/courses/3551/murdercleaners/fiveforcesporter.htm[accessed 29 April 2012] Morgan M.R., & Hunt D.S., 1995. The Competitive Advantage Theory of Competition. Journal of Marketing, 59:pp1-15. Piercy, N.F., 2002. Market-led strategic change: A guide to transforming the process of going to market. MA: Elsevier Inc. Porter M.,1985. Competitive Advantage, Simon & Schuster, Ne w York Starkey, K., & Tempest, S. 2009. The Winter of our discontent: The design challenge for Business Schools. Academy of Management Learning and Education , 8, 4: 576-586 Wilheim, O., 2004. Measuring Reasoning Ability http://www.em2007.mpg.de/files/Wilhelm.pdf[accessed 29 April 2012] Appendix 1 Project Summary In the current rapidly growing technologies in the market, businesses are looking for platforms where they can reach an optimum number of customers through advertising and creating awareness in marketing. In addition, institutions target high populations of targeted customers to create awareness. Currently, more and more people have embraced social networks in their daily lives, meaning that millions of social network users are continuously attracting the corporate world to such platforms to tap this large potential market. Therefore, in the future it is expected that business platforms and social networks will operate as an integrated platform where most business communication and advertising will be carried out reduce costs, while at the same time reaching a large number of targeted customers. As more and more people target social networks for entertainment, communication, search for employment, and business opportunities, in the future, social sites will provide the best platform where the social communication and corporate world meet, though with diverse needs to tap these benefits. The availability of these social networks, and their reliability and effectiveness in facilitating communication implies the model will offer a competitive edge to users of such platforms in meeting their objectives, which would result to increased value proposition to customers and users. This will amount to a coherent business model that offers customers value adding services at lowered costs and with minimal requirements in terms of set up and hardware, making it to attract more customers in the market. Instead of high advertising and marketing bills, the realities in integrating social networking channels to an interactive platform bringing together students, universities, and businesses would enhance cheaper communication platforms that would change marketing and advertising campaigns as well as reducing huge bills accumulated in communication channels. Appendix 2 Project Model Appendix 3:Project team scenarios and report produced for Submission 1 Introduction With the advent of networking sites like: Hi5, LinkedIn and Facebook, the past five to six years have seen social networking rise and gain a millions of users. Now, that social networking has become a booming business. The purpose of this paper is to develop strategic scenarios with respect to the future of the social networking sector. Business and academic literature as well as various kinds of analytical models have been taken into consideration in the development of this study. Following this is a detailed the specifics of the strategy suggested followed by the conclusion. SCENARIO STRATEGY Current scenario: Social networking sites such as Facebook, Orkut, Bebo and Twitter have millions of fans who visit these sites each month (Kazeniac, 2009). Although these sites have gained the attention of multinationals and marketing organizations, academic research that deals with these sites are very much at their stage of infancy (Boyd and Ellison, 2007; Beer, 2008). Issues such as identity development (Hodkinson, 2007; Zhao, Grasmuck and Martin, 2008), friendships (Choi, 2006, pp. 173-186.; Gregg, 2008) and privacy (Acquisti and Gross, 2006, pp. 36-58.; Hodge, 2006) have been some of the issues been dealt with. With social networking becoming a booming business, the question to be asked here is what is the future of the social networking sector? The diagram below illustrate the top social networking sites and their main uses: Figure 1: Major social networking sites and their uses. S.W.O.T. analysis: Before commencing on discussing the futuristic pathway of the social networking sector, it would be prudent to discuss the strengths, weaknesses, opportunities and threats that the industry faces in order to reach a logical understanding of the potential of social networking. Figure illustrates the S.W.O.T. analysis of social networking, following which is a brief explanation of the diagram. Figure 2:S.W.O.T analysis of social networking. (Adapted from Akinocommunication, n.d.) Foresight: Considering the above analysis, it can clearly be stated that the social networking sector, regardless of its weaknesses and threats holds great potential, not just from the civilian standpoint of making new friends, building relationships, socializing (Clavio and Kian, 2010; Davidson, 2004; Kassing and Sanderson, 2010) and sharing information (Katz, 1997) but also from the industrial as well as societal standpoint. It is here that social sites have and can aid in the development and promotion of not only business organizations but also societal issues that need to be addressed by exposure. Academic researchers have, through their publications, stated many uses of social networking. These include aiding in medical issues such as physical therapy (Bemis-Dougherty, 2010), eating disorders (Juarascio, Shoaib and Timko, 2010) and general health promotion (Buis, 2011), spreading of societal and environmental issues (Barr, 2011) and business promotions (Anon, 2010; Allen, 2009). Figure 3 illustrates the horizontal and vertical futuristic growth of the social networking industry. Figure 3: Foreseeing the future of the social networking sector. Note: Variables depicted are randomly scattered and do not indicate any relation to each other. Scenarios: Based on the above analysis, following are stated possible scenarios that could be the future of the social networking sector. Figure 4 illustrates four possible scenarios. Figure 4: Scenario depiction. i. Scenario 1: There may arise a possibility where in social networking companies restrict the usage of sites by making them paid for. This would definitely aid in reducing high-end risks such as spam, fraud, etc. but it would reduce the popularity of social networking on a whole. ii. Scenario 2: A different scenario for the social networking sector is by allowing social networking sites to progress the way they are thereby enabling networking between individuals and businesses. This would although lead to the misuse and increased risks of spam, identity theft and an invasion of privacy. iii. The glory of 21 century Another possibility could be the change of the current legislation could lead to a which information and how people use the social media. This would again restrict the usage and number of users of such sites. iv. Not even the Sky is the limit The most highly accepted and strong possibility for the future of the social networking sector is the continued manner in which social networking sites are progressing thereby enabling networking between individuals and businesses making the information or connections between people or even business faster, in other words due to social networking nowadays the world is a distance of a finger. Business concept and new business model: Summary: Taking into consideration the scenarios presented above, the best alternative from the four stated options would be to allow social networking to progress in the manner in which it is, thereby allowing individuals and business organizations to interact, build relationships, promote and expand their horizons. Problem: One major issue faced by the social networking sector would be that prevalent risks such as spam, identity theft, etc. would exist. With the increasing complexity of technology, further risks of greater potency are likely to arise in the future. Solution: The solution would be to not restrict social networking sites by means of new legislation or high-end online security but to increase monitoring thereby enabling free usage of such media without creating any restrictions. Further to this, the social networking sector on a whole could use social sites as well as other media to promote the benefits of positive usage, thereby educating individuals and businesses to profit more from one of the easiest, simplest and cheapest yet one of the most effective modes of communication in this day and age. Conclusion The purpose of the above paper was to provide strategies with respect to the future of the social networking sector. The above section provided a brief description of the current scenario along with a S.W.O.T analysis and a futuristic foresight. It further illustrated the scenario, provided a business concept and strategized a new business model. With respect to the above analysis, it thus can be suggested that social networking will extend both horizontally and vertically thereby aiding not only individuals to communicate but businesses and industries as well. Furthermore, the sector will further see a possible positive extension with the spread of societal, medical and health issues. All technology has its drawbacks and limitations but with a prior and clear understanding of the potential drawbacks that are likely, the social networking industry can do its best to prevent and control the misuse and hurdles that such communication may face and can prove to be one of the most effective communication and informative tools ever created. Read More