Advantages & Disadvantages of Social Network-Samples for Students

Question: Discuss about the Advantages and Disadvantages of Using Social Media in Business. Answer: Introduction The aim of the assignment is to study the advantages and disadvantages of using social networking in the business organisations. The business organisations today use social networks to communicate with their external stakeholders like the business partners and customers. The social networking activities can be offline and online. The offline activities compromise of using references to get more profitable business deals and meeting with prospective clients. The online networking consists of using emails, ecommerce websites and social networking media sites like Facebook to conduct business. These social network has both advantages and disadvantages to the business organisations using them. The assignment starts with project objectives followed by the scope of the project. The next section is the literature review which delves into the advantages and disadvantages of using social media in the business. The threats of using social media in conducting business would be studied from both ethical and technical aspects. Project Objective: The objective of the assignment is to study the advantages and disadvantages of using social network in the business organisations. The study would aim to show both the brighter and the darker side of using social network to carry on business. Project Scope: The scope of the project is huge and covers area. The assignment will deal with how business organisations use their physical networks like goodwill, references and other methods to expand the area of their business. The paper would also deal with digital media and social media which organisations use to conduct business activities like selling their products online and gaining customer feedback. It would point out the advantages of using social networking for business purposes like reaching out to customers and building new partnership. The assignment would also cover the threats to sharing databases online which companies do with their business partners and customers. The threats would be explained both from ethical and technical view point. Literature Review: Advantages of social network: Drury-Grogan and Russ (2013) state that the advantage of social networking to busienss organisations is that it helps the companies to communicate with customers and business partners. The companies often use references from their business networks to avail more profitable business deals compared to their competitors. Lwin, Wirtz and Stanaland (2016) in their work state that business organisations use networks of distributors to deliver the goods to their end customers. They also use their promotional networks to create and increase awareness about their products among the customers. This analysis shows that networking has two forms one is targeted at the customers while the other is targeted at business partners. References is the networking channel which business organisations use to get more profitable business deals while their delivery networks help them to deliver goods to the final customers. The second advantage of networking is that it helps the companies to sell their products to a vast number of buyers all over the world. Nawi, Fong and Tatnall (2014) point out that the companies today to sustain the intense competition in their home and international markets take to using the ecommerce network to advertise their products to a global consumer base. Bosomworth (2015) supported Nawi, Fong and Tatnall though his work where he added that mobile phones have evolved into devices which allow customers to view and order for products just like the computer. Riasi (2015) in his work support both opinion and points that e-marketing has emerged as a strategic method which companies can use to advertise and sell their products. This online receiving of orders and selling of goods have increasing contribution to the revenue of companies. Thus, networking in form of e-commerce websites help the companies to sell their products to a huge consumer worldwide and earn lump sum profits w hich in turn yields competitive advantages in the global market. The third advantage of using social networking channels by business organisations is that it helps them in foreign market expansion and growth. Bharadwaj et al., (2013) state that digital networking like e-marketing has emerged into powerful channels to find out business partners, suppliers and distributors in a foreign market. The multinational can use the digital platforms to create awareness about their products they are aiming to introduce in a new market or the product with which they are aiming to enter the market. These marketing strategies attract interested suppliers and distributors which agree to work with the company in the new market. Laudon and Laudon (2016) point out that efficient supply chain which provide the companies with high quality raw materials at low prices have become imperative to the increasing in profit margin and reduction in production for the companies. Deresky(2017) states that this results in supply of high quality products at low prices which helps the companies to gain cost leadership in the market one hand and counteract the threats of newly entering companies. Moreover the companies use social media websites like Facebook to advertise their products which attracts both customers and logistics chains. Disadvantages of social networking to business organisations: Social networking in various forms like reference building and digital marketing have several advantages but it too has its disadvantages. Dawson(2015) contradicts Bharadwaj et al. (2013) and throw light on the greatest threat facing companies who use social media networking for business processes-cyber threat and cyber terrorism. Rotich et al. (2014) further supports Dawson and enlightens the disadvantage that cyber threat can do to companies using social networking sites. These writers states that the companies often have to share strategic information like upcoming products and business expansion plans over the social media websites. This exposes the crucial business data to unlawful elements who use the data to extort money from the companies to finance their unethical practices. Leukfeldt and Yar(2016) however states that social networking has become so imperative to the business processes of the companies that they cannot do away with social media altogether. This increased nec essity of social media have led the companies to bear huge expenditure to maintain the social media pages. Arief, B., Adzmi and Gross(2015) state that this regular maintenance ensures that the social networking pages and the databases of the companies are safe from cyber threats. However, Stubbs, J. Polityuk, P. (2017) snubs this perceived security of data bases of the companies due to regular checkups and warns the multinational companies of more powerful cyber attacks. Thus, use of social networking exposes the companies, the multinational companies in particular before cyber threats which cannot be prevented altogether. The second disadvantage of sharing business related information over the networking increases the knowledge base maintaining costs to the companies which erodes their limited resources. Laudon and Traver(2013) point out that the multinational companies today spend whopping crores of dollars and pounds to create the most advanced and stylish networking pages on the social media like Facebook. This high additional cost to attract customers and business partners adds to their advertising costs which in turn increases their cost of goods sold. This analysis clearly shows that social networking particularly in the digital space increases the expenditure of the multinational companies which puts immense pressure on their resources. Hilman and Kaliappen(2014) further points that increase in cost of production and its erosion of capital effects the cost leadership of multinational companies which badly impacts their capital maximisation and market competitive advantage. Thus, it can be infer red from the discussion that usage social networking by the multinational companies has dire effects on their cost leadership and long term competitive advantage. The next disadvantage of using social networking is that it exposes the companies before ethical issues. According to George, Haas and Pentland(2014) the multinational companies often share strategic business information with their local business networks using social networking. This puts these multinational companies into ethical challenges from these local business entities. Almirall, Lee and Mjchrzak(2014) further points out that local business entities may manipulate and steal the data of the multinational companies to bring about their own business development. Moreover, unethical employees may share the data with unauthorised persons to gain advantages and favours from them. These ethical challenges put multinational companies in risky situation. Thus, use of social networks may lead to ethical issues and business losses to multinational companies. Conclusion It can be clearly pointed out that multinational companies use social media on massive scale on to carry out business. It can also be summed up that this trend of using social networks has both advantages and disadvantages. The advantages are that it helps the multinational companies to attract business partners and customers. It can summed that social networks more particularly the ecommerce companies have emerged as important sources for the company to earn profit. However, this exposes the MNCs before cyber threats and leads to huge expenditure to check these threats. The companies cannot do away with application of social media due to a multiple benefits of using it to conduct business. However, they can protect their social networks using strict vigilance measures like passwords and authentication of the identity of the users. 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