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ADVANTAGES AND DISADVANTAGES OF SOCIAL NETWORK ON BUSINESS

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Abstract

Social Networks have become a common phenomenon in the contemporary society. Nowadays,

almost all aspects of human life are depended on social networks in one way or another. One of

the areas that the use of social networks has become a major aspect is businesses and

organizations. Notably, it is almost impossible to find a modern business which does not use

social network platforms like Twitter, Facebook, YouTube, and Instagram, among others. One of

the main reasons for the social networks is for marketing purposes and interaction with

consumers (Shah 2010). This paper will discuss some of the major advantages and disadvantages

of social networks on businesses.

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Table of Contents

Abstract ........................................................................................................................................... 2
Introduction ..................................................................................................................................... 4
Literature Review............................................................................................................................ 5
Methodology ................................................................................................................................... 6
Findings........................................................................................................................................... 6
Advantages of Social Networking on Businesses ....................................................................... 6
Brand Awareness ..................................................................................................................... 6
Interaction With Consumers .................................................................................................... 7
Effective Marketing ................................................................................................................. 7
Affordability ............................................................................................................................ 8
Informative .............................................................................................................................. 8
More Inbound Traffic .............................................................................................................. 8
Disadvantages of Social Networking on Businesses................................................................... 9
Exposure to Competitors ......................................................................................................... 9
Need for Qualified Personnel .................................................................................................. 9
Slow Return on Investments .................................................................................................... 9
Likelihood of Tarnishing Brand Name .................................................................................... 9
Time-consuming .................................................................................................................... 10
Conclusion .................................................................................................................................... 10
Recommendations ......................................................................................................................... 10
References List.............................................................................................................................. 12

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Introduction

A social network refers to a social structure in which a set of actors (either individuals or

organizations) tend to develop a particular connection. Over the years, the popularity of social

networks has grown tremendously to enable millions of users to not only share data and

information but also affect how organizations conduct their activities (Hensel & Deis 2010). The

number of people joining social network platforms is becoming more prominent each day.

According to Ellison and Boyd (2013), as from 2012, one in every four persons all over the

world is connected to at least one social network. Nowadays, social networking sites, Facebook,

Twitter, Instagram, and Snap chat, among others have become essential components in

organizations and the business world. Most of the social networking sites have become popular

in the world of business as organizations can target and reach many customers at the same time.

On the same note, Ellison and Boyd (2013) further assert that more than 70% of consumers tend

to prefer and recommend brands and organizations which they have had a positive interaction

through social networks. Undoubtedly, Social networks have enormous influence on the day to

day activities of businesses and organizations.

Figure 1. Average time Americans spend on social networks daily (Talović, 2017).

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Literature Review

Social networks have taken the world by storm and changed many aspects of human life.

Presently, most organizations are increasingly adopting the use of social media networks to

enhance their communication and improve their marketing and recruitment strategies. The

evolution of social networks can be attributed to internet technology which was first developed

in the 1960s (Edosomwan et al. 2011). One of the oldest social networks was Usenet which was

founded by Tom Truscott and Jim Ellis, graduates from the Duke University (Edosomwan et al.

2011). Since then other social network platforms which had been launched before modern social

networks are Bulletin Board System (BBS), Friendster, LinkedIn, and MySpace, among others.

However, the current era of social networks can be attributed to the launch of Facebook in 2006

(Laudon & Traver 2016). Since then, the business world and other human aspects have witnessed

significant growth and evolution of social networks. By 2012, it was estimated that Facebook

was the most popular social network with an estimated 1.06 billion active users, among them

business organizations (Ellison & Boyd 2013). As a result, the use of social network platforms in

the contemporary world has facilitated communication between businesses and their customers.

Additionally, social networks have become essential stepping-stones for businesses to

create brands as well as to help them earn acceptance in the ever-competitive market. Over the

years, social networks have also led to the establishment of online shops whereby consumers

order and pay for products/ service through the internet before waiting for them to be delivered

without necessarily visiting the product stores (Edosomwan et al. 2011). Even so, social

networks are also faced with several challenges as far integrating them into businesses is

concerned. As a result, businesses should be aware of both the advantages and disadvantages of

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social networks to ensure they achieve a balance which can enable them to use in the platforms

to achieve their goals and objectives.

Methodology

Books and journal articles were reviewed to arrive at the finding about the positive and

negative on impacts of social networking on business.

Findings

From the analysis of books and journal articles, social networking has both positive and

negative on business.

Advantages of Social Networking on Businesses

Figure 2. Benefits of Social media for small business (Lacho & Marinello 2010)

Brand Awareness

One of the main advantages of social network platforms is creating brands. This is

enhanced by the ability of a business to stay in touch with consumers through its social

platforms. Various social network platforms like Facebook and Twitter enable businesses to

advertise their products and services in a way that is likely to reach out to many people as

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opposed to using methods like print media, radio, or television (Lacho & Marinello 2010). In this

regard, businesses that tend to utilize the power of social networks effectively are likely to build

trust with their existing customers and showcase themselves in demographics that have the

potential to yield new customers.

Interaction With Consumers

Social networks are essential to a business as they enable them to interact directly with

the consumers. The use of social sites like Facebook and Twitter allows companies to receive

instant feedback on products or ideas on which they may need the opinion of consumers. More

so, consumers who have concerns or problems related to the business can quickly post their

issues resulting in organizations acting promptly. In this light, social networks are essential in

providing consumers with a convenient means to express their feelings and opinions regarding

products or services offered by a business. As a result, one of the advantages of social networks

on businesses is to improve their responsiveness.

Effective Marketing

Unlike blatant marketing approaches, businesses which tend to embrace social platforms

like LinkedIn and Twitter are likely to reach potential customers who eventually turn to be

consumers. Social networks enable businesses to market their products and services in a way that

consumers will not feel like they are overwhelmed by marketing campaigns. Additionally, the

platform allows for businesses to place their adverts strategically within informative posts

leading to a faster spread of word regarding the products or service being offered. More so, the

platforms are effective as businesses can constantly and repeatedly remind the consumers about

their products and services.

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Affordability

The promotion of businesses through social networks is cost effective compared to other

methods such as advertisement through print or visual media. Social networks do not require

extensive budgets to ensure a business can promote its goods and services. In this regard, the

platforms are essential in enabling small businesses to compete with wealthy and well-known

brands (Molina‐Morales & Martínez‐Fernández 2010). The costs of maintaining a social network

presence are minimal, and each business has the liberty to spend as little as their budget can

allow them. This way, social networks are advantageous to businesses as they are cheaper

compared to traditional promotional activities.

Informative

Social networks enable businesses to access to the activities of their competitors. More

so, companies get informed about the opinions of consumers regarding a competitor's goods and

services. Additionally, businesses can have a better insight into the market and other factors

affecting their industry. Businesses use such information to improve their products and services

to gain a competitive advantage in the market.

More Inbound Traffic

Businesses which do not market their goods and services through social networks tend to

have their inbound traffic is limited to the usual customers. Such businesses have difficulty in

reaching customers who are outside their loyal customer circle. Each time a business adds a

profile to their social network content, it results in them increasing their likelihood of acquiring a

new customer. As such, marketing a business through social networks offers them an opportunity

to acquire a variety of consumers from different parts of the world.

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Some other advantages of social networks to business are brand reputation, website

traffic, brand loyalty, and evaluation, among others.

Disadvantages of Social Networking on Businesses

Exposure to Competitors

The concept of using social networks entails businesses exposing their strategies in the

public domain. A business' methods and approaches are studied by competitors resulting in them

being at risk of being outdone in the market.

Need for Qualified Personnel

The management of social networks by businesses requires qualified individuals who can

perform the role professionally. A business must invest more in apparatus and salary to ensure

they achieve the objectives of the companies. Subsequently, the use of social networks in

business may sometimes result in the emergence of additional expenses.

Slow Return on Investments

Marketing through social networks is a long term investment which businesses cannot

expect their returns after a short duration. As a result, the use of social networks is not ideal for

organizations looking for quick results. In contrast, businesses that wish to attain immediate

results prefer traditional marketing methods.

Likelihood of Tarnishing Brand Name

All information shared through social networks is sensitive and can cause harm to the

business. In the event of an adverse occurrence regarding a business' products or service, the

information will find its way into social network platforms resulting in members of the public

having a chance to express their satisfaction. As a result, the presence of negative views about a

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business on social networks will tarnish the brand name of a business and its products thus

deterring existing and potential customers.

Time-consuming

Consumers may ignore a business’s social network page because they are interested in

other sites. It takes a long duration before consumers can start appreciating the content a business

posts on their social network pages. As a result, a business may be forced to use a lot of

resources in terms of money and time to ensure the consumers appreciate their contents.

Conclusion

Over the years, the popularity of social networks has grown to great levels to enable

millions of users to share data and information. The evolution of social networks into a critical

aspect among businesses has been a slow process which has taken several decades. Essentially,

social network platforms have been an integral component in modern businesses. In

contemporary society, social networking sites, Facebook, Twitter, Instagram, and Snap chat,

among others have become crucial components in the business world. In relation to businesses,

social networks have several advantages and disadvantages depending on several factors.

Essentially, businesses have to ensure their use of social networks is in alignment with the

business's goals and objectives.

Recommendations

Social networks are essential to the success of any modern business. Businesses which

tend to effectively utilize social networks are likely to succeed in aspects such as marketing and

interaction with consumers. However, business owners and managers should also strive to ensure

that the use of social networks does not result in additional expenses or exposure of business

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strategies to competitors. In this sense, businesses should have the ability to effectively integrate

social networks without losing focus on their goals and objectives.

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References List

Edosomwan, S., Prakasan, S.K., Kouame, D., Watson, J. and Seymour, T., 2011.The history of

social media and its impact on business. Journal of Applied Management and

Entrepreneurship, 16(3), pp.79-91.

Ellison, N.B., and Boyd, D.M., 2013. Sociality through social network sites. In The Oxford

handbook of internet studies.

Hensel, K. and Deis, M.H., 2010. Using social media to increase advertising and improve

marketing. The Entrepreneurial Executive, 15, p.87.

Lacho, K.J. and Marinello, C., 2010. How small business owners can use social networking to

promote their business. Entrepreneurial Executive, 15.

Laudon, K.C. and Traver, C.G., 2016. E-commerce: Business, technology, society.

Molina‐Morales, F.X. and Martínez‐Fernández, M.T., 2010. Social networks: Effects of social

capital on firm innovation. Journal of Small Business Management, 48(2), pp.258-279.

Shah, R., 2010. Social networking for business: Choosing the right tools and resources to fit

your needs. Wharton School Publishing.

Talović, N., 2017. Advantages and Disadvantages of Social Media Marketing. Jellymetrics.

Available at: https://jellymetrics.com/social-media-marketing/.

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