Social Media for Small to Medium Enterprises - Essay Example

Social Media for Small to Medium Enterprises Introduction Since 1970, economists together with various government bodies have recognized the role played by small to medium businesses in the current world. Small to medium businesses contributes up to 80% of world economic development (Andreas, 2011, p. 15). These small businesses have a substantial input to countrywide economy in regard to job opportunities created by these companies and wealth generation. These businesses pay significant revenue to the national government to boost the country’s development projects. A small business has no specific definition, but it ultimately has specific characteristics that make it qualify to be under the category of small business (United Nations et al. 2004, p. 25). Some of the criteria met by small businesses are small market place shares possession; management by owners or a group of owners without dignified administration structure and independence such that they do not form a fraction of larger enterprises. Medium business may have these properties too but in advanced level such a dignified management composition (Hanke, 1981, p. 35). The propagation of internet has provided an exceptional prospect for small businesses and medium size enterprises to operate their enterprises electronically and perform business globally in a more competitive manner. The company needs prior grounding before implementing e-business so as to experience significant benefits. Currently, the internet use all over the world is on the rise. More specifically the internet usage in Sweden grew by 68% in the year 2005 (Mourdoukoutas, 2006, p. 39).Electronic business based on the internet is described as a system that enables the enterprise to connect with employees, customers, partners and suppliers via internet through a brilliantly designed platform. The electronic business makes it feasible for medium enterprises to realize their goals easily, become more efficient and increase their rate of growth. E-business currently is also practiced via other social media websites other than company’s self-managed web platforms (Hoskisson et al., 2009, p. 49). The use of Social Media in Small to Medium Enterprises The social media websites include but not limited to; Facebook, twitter and YouTube, LinkedIn and MySpace. The advantage of these social media websites is that they are visited by everyone who is interested with no restrictions for fun, frivolous and communal purposes. In this sense, the company has an opportunity to meet its customers and retrieve responses from them that would otherwise be left unsaid. These networking sites make it possible for many people to interact and in the process they can share their experience in different fields, share skills and knowledge attained in one’s profession or through working experience (Office for Harmonization in the Internal Market, 2010, p. 17). Social network can be defined as services that are web dependent responsible for allowing people to (1) establish a public profile inside an enclosed system, (2) create a directory of other users whom they have a connection with and (3) scrutinize and navigate through these connected users insides the system. Each of these social networks has their goals and each targets specific people either by their age, profession, gender, geographical residence among others. For example, MySpace pays attention to fields such as hobbies and movies. Facebook concentrates more on student and young generation while LinkedIn pays special attention to Business related networks. Firms started using social networks from stiff competition in the market currently and due to changing trends in the market environment and customer demands (Raynard and Forstater, 2002, p. 46). Some companies decided to launch their own social networks to promote efficiency at their workplace and facilitate the process of recruiting as well as connecting with capable contributors to innovative journey of their productivity (Lambert, 2003). Internal social networking helps the company to monitor employees’ behavior within the company premises and ensure positive employee to customer relationship (European Commission, 2001, p. 32). Most companies similarly network with the intention of carrying out market research and finding their potential clientele in several geographical locations. LinkedIn website provides a private platform where all employees from different companies can meet, talk and share ideas. In this platform employees have a chance to ask questions related to various companies (E business journal, 1999, p. 20). Research on small to medium enterprises revealed that Facebook was the leading social media in these enterprises by 93 percent. Facebook was followed distantly by twitter with28 percent. Occupying the third position was LinkedIn with 17 percent and YouTube occupied the fourth place with 7 percent. Most of those enterprises with Facebook account said that they have generated a link that connects back to their main website (United Nations and Economic & Social Commission Western Asia, 2003, p. 43). Most of these enterprises do monitoring as well as updating their social media every day. The updates include new products in the market, new price lists, introduction of new services by the company, vacancies in the company, change of management, descriptions of some of the products and advertisements. In fact the list of the information the company can share in the social media is too long and probably endless depending on the company’s undertakings and diversity (Glover et al., 2001, p. 71). Despite this rampant use of social media by enterprises to share information with the public most companies restrict their employees from using social media in a workplace. The management argues that if the workers use the social media most of the time that would be spent on market and product development will be wasted. Correspondingly, these employees will provide poor services, poor relationship with customers and increased workplace errors (Laudon, 2002, p. 102). These setbacks can cost an enterprise its reputation and brand leading to fewer sales and decreased productivity. The disadvantage of social media reliance is that there are more people who do not visit the social media and still are potential customers (Al-Qirim, 2004, p. 79). To cater for those who do not visit internet regularly mechanisms such as radio, newspaper, magazines and television should still be used for advertisement purposes. Over the most recent decades, small and medium sized enterprises have shown numerous advancements in technological development. The advancements include online selling and buying apart from the obvious social media advertisements. This is referred to as e-commerce or e-business. E-business also involves incorporation of products, services and procedures on the internet platform. The companies create online storefronts where buying and selling and services to customers takes take place. These medium sized companies exploit the widespread internet accessibility to distribute their products to wider geographical area. Internet makes the business to be convenient and available almost any time of the day (Fiancial schemes for small and medium enterprises, 2001, p. 77). The e-business gives a firm competitive advantage over the other similar companies. Online transaction beats the barrier of the distance between the company and the customer. Companies adopt e-business plan depending on their need and goals. At present many companies have embraced this upcoming electronic business but the transition to this new level from the tradition trading system is facing some resistance from the public. Challenges threats which are probable to be encountered in this new venture are a setback to transition too. Medium sized enterprises such tourism, retail companies, textile industries and automobiles are the most rapidly advancing in this technology(Glass, 1991, p. 114). These companies provide their services 24 hours a day to the customers. This has led to marvelous success especially in the field of retail enterprises, motorcycles industries and tourism companies. Anoto is an enterprise based in Sweden it produces and markets digital products such as digital pens. It contains around 110 employees. It has headquarters in Lund, Boston, Tokyo and Sweden. This company is currently adapting social media strategy to expand its market locally and globally. It offers services to its customers online and does advertisement as well as procedures to customers online (Devos et al., 2014, p. 119). It responds to customer’s needs and priorities through online communications. The company is developing advanced products such as digital pens and live forms that have been received with applause in the market. Digital forms have seen applications in several fields such as health care, pharmaceutical field, education systems. These digital products have numerous returns such as improving patient care, which is the main responsibility of a health care unit (Devos et al., 2014, p. 52).These pens and paper reduce manual data entry as the pens and live forms are capable of saving the data to the computer directly. They assure instant data processing including interpersonal or inter department communication especially in hospitals. These Anoto products increase productivity of any company that uses them. They enhance secure compliance and improve customer care. Anoto, therefore, needs advanced means of reaching the public to inform it about its electronic breakthrough. The company provides digital writing illumination online and through social media via its 110 employees. There are numerous reasons why enterprises such as Anoto prefer social media in their companies. These ranges from advertisement purposes, market expansion and penetration purposes among many others (Devos et al., 2014, p. 45). Anoto should employ well thought out system to maximize the potential and reduce the risk of associated with online and social media business. The company can employ more workers so as to reach more people at a particular time and peak seasons. The company is also supposed to open more headquarters in the different countries so as not to lose customers who are not internet funs. The company should also launch and manage its own social media website so as to connect to people directly. The enterprise should also think about developing its own smart phone and tab application. In this manner, the company can expand its market. It should be careful on excessive e-business and social media advertisement as this can create a gap between the majority people who have not yet advanced to the digital world. Many small to medium enterprises adopt e-business for many reasons among them is an aim to improve relationship with the customer. E-business results in better customer relationship improve relationship with the customer. E-business results in better customer relationship and improved customer services. Online answering of customer’s questions portrays sense of responsibility and dedication of the company to offering the customer best services. It similarly creates trust from the public. The fact that a customer can order product via internet is an enticing aspect and wins the customer’s loyalty and trust upon delivery (Pride et al., 2005). This method is convenient to the customer whom just likes to order products from home via the internet. E-business offers the company a chance to make better decisions and makes the process easier. Adopting e-business implies that the process of exploring the market and seeking possibilities of potential market expansion is simplified (Spence et al., 2004, p. 64). E-business contains systems such as opinion support system. This system offers supports to the enterprise management to make sound decisions based on proper analysis and company’s future goals and objectives. These management decisions include medium size or small size finance decisions such as expenditure and inputs, decisions on the best investment plan and procurement choices (Bagnasco and Sabel, 1995, p. 115). The ability of the managerial team to foresee and plan about the future is aided by the adoption and implementation of e-business system. All this is made possible by the easiness of gathering data and making analysis as well as the capability to list and specify possible alternatives by use of e-business expertise (Hibbert, 1997, p. 99). E-business correspondingly offers better information flow within the management. It facilitates better information distribution, effective scheduling, and synchronization of company‘s activities (Frailey et al., 1989). Through the e-business databases the information of the consumers, suppliers and workers can be managed easily. The client’s records are kept safe and for a long period of time. This information enables the corporation to keep trail of the changes in the market and deduce future possibilities (Bagnasco and Sabel, 1995, p. 220). There are numerous applications running at present that enable the company to manage its information. These include Supply Chain Management System and Customer Relationship Management. The company enjoys accuracy of the information and simple searching procedures (United Nations and Economic and Social Commission for Western Asia, 2003). E-business makes handling of order and sales straightforward. This saves much time, cost and energy used to order products via phone calls in the traditional system of business (Boone and Kurtz, 1976). With e-business there are simultaneous orders made through internet, this raises the total number of sales of small to medium size companies (McLeod, 2010, p. 88). E-business helps the company to save on the cost used to employ workers. This can be an advantage on the finance side and a disadvantage in the sense that lack of enough human interaction can lead to customer loss. Online auctions have also led to increased net sales (McLeod, 2010, p. 80). E-business enhanced profit maximization is due to lowered costs of transactions and transportation. Profit making is the main intention of any organization and therefore, any measures taken to increase profit is highly cherished. Limited capital is required in online marketing without affecting the output of the company (Dabić, 2001). Online business means that the company is operating a 24 hour transaction with very few workers. Using the internet to market one’s goods means there is a large geographical coverage. This aids in extending the business world wide and attaining fast globalization. E-business eliminates the distance barrier between the customer and the service providers (Johnston and Bate, 2003). Other companies that are doing great in the e-business are the tourism related enterprises. Examples of e-business companies based in U.K are Thomas Cook Corporation, Cox & Kings, MakeMyTrip Company and Expedia. In these companies services and procedures are offered online throughout the season. Customers book online before the planned journey while they are at home (Young, 2013). The customers travel arrangements; room booking and meals are made online including the payments. The customer is then given the directions to the visited location and on the arrival everything is already set for him or her. These companies have their websites online where they do advertisement and procedures to the customer (Johnston and Bate, 2003). While all the above mentioned benefits exist these e-business or online marketing faces some threats and services. In the list of challenges is that e-business adoption is expensive and necessitates thorough prior investigations and arrangements (Freund and Williams, 1972). A company needs to purchase modern computers and application that can assist them to run their online business. The company incurs the cost of new software and (Lambert, 2003)hardware that are compulsory for online businesses (Devos et al., 2014). There is also a shortage of technology experts in the current world. The few experts that are available are expensive to pay and maintain in this rapidly transforming world. Online marketing simply means going global and, therefore, there is a need to set up offices in most overseas countries, this is not only expensive, but uphill task that takes time. Another threat in the e-business is the risk of system hackers (Glover et al., 2001). In a research to find out the most feared risk in the online business, hacking was identified as the number one risk (Freund and Williams, 1958). The other concern identified in this field was the lack of personal contact with the customers. Some customers dislike this and develop a negative attitude towards such businesses leading to breaking ties with them (Devos et al., 2014). The other challenge to e-business is that most customers are currently not ready for the abrupt transition. This is a big blow to these online enterprises. At these time and era most people are afraid to carry out money transactions online. Conclusion Most of the businesses currently have turned to offering e-businesses services and they are exploiting new strategies such as coming up with smart phone’s applications for their companies. These applications will be interacting with the customers and responding to any of the customer’s interest and enquiries. New strategy being employed currently is the company’s own social media website. Social media and other websites for advertisements are also some of the strategies that are on the rise currently. These e-businesses have many advantages and challenges too. The good news is that, in all the cases, the advantages and benefits of e-business outweigh the challenges and risks. References Al-Qirim, N.A.Y., 2004. Electronic commerce in small to medium-sized enterprises frameworks, issues and implications. Idea, Hershey, Pa. Andreas, F., 2011. A simple path to sustainability green business strategies for small and medium-sized businesses. Praeger, Santa Barbara, Calif. Bagnasco, A., Sabel, C.F., 1995. Small and medium-size enterprises. Pinter, London. Boone, L.E., Kurtz, D.L., 1976. Contemporary business. Dryden Press, Hinsdale, Ill. Dabić, M., 2001. Universities as partners for small and medium enterprises. Naše Gospod. 345–356. Devos, J., Landeghem, H. van, Deschoolmeester, D., 2014. 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The everything guide to crowdfunding: learn how to use social media for small-business funding : understand crowd psychology : gain an online presence : create a successful crowdfunding campaign : promote your campaign to reach hidden funding sources. Adams Media, Avon, Mass. Read More