Social Media: Transformation of the Business World

Running Head: SOCIAL MEDIA: TRANSFORMATION OF THE BUSINESS WORLD

SOCIAL MEDIA: TRANSFORMATION OF THE BUSINESS WORLD

Wai Ki Stephy Ip

University of Toronto at Scarborough

Table of Contents

Abstract        

Introduction        

Company Strategy with the Use of Social Media        

Internal Communication        

i. Selection and Recruitment process        

ii. Workplace communication        

iii. Employee Training        

External Communication        

Advertising Campaign        

Social Media Analytic Tools        

Application and Effectiveness        

Concern on the effectiveness of social media analytic tools        

Customer Engagement Vs Financial Performance        

“Likes” = “Profit”?        

Impacts on Business, Individuals and Society        

Impacts on Business        

Impacts on Individuals        

Impacts on Society        

Traditional Media vs. Social Media        

Differences between traditional media and social media        

Can social media replace traditional media?        

Conclusion        

Bibliography        

Abstract

In this digital era, there are more than three billion global active Internet users, in which more than 2 billion are also active social media users (Kemp, 2015). This represents 30% of the worldwide population (Kemp, 2015). Such phenomenon creates broad opportunities and challenges for companies to transform their business. Companies embrace the power of social media into various business functions, including recruiting and training, raising brand awarenesss, gaining customer satisfaction, so as to maximize corporate profits.

This paper argues that solely adopting social media is not the key to drive business success, instead, integrating social media with traditional marketing, along with “knowing your customers” is the formula for success. Based on analyzing literature review, this paper first examines the relationships between social media and business transformation by exploring how companies make use of social media platforms and analytics tools in both internal and external business environment, followed by measuring the effectiveness of each strategy. Second, it analyses how the above-mentioned transformative business practices alter consumption pattern, which exert influences on individuals and society. Lastly, the values of social and traditional media are differentiated so as to demonstrate that social media cannot entirely substitute the roles of traditional media.

Keywords: business transformation, communication, customer engagement, integration, social media, social media analytic tools

Introduction

The rise of social media has attracted more than two billion people in its global audience over the last decade (Kemp, 2015). It has taken the world by storm through hundreds of  blogs, forums and social networking sites like Facebook Among the audience, more than half make use of social media to do online researches and consult reviews before making their purchase decision (Go-gulf, 2014). Such an increasing trend in the use of social media has created opportunities for companies to enhance their transparency and interaction with their followers, as well as to boost their sales performance. Statistics have shown that over 90 % of businesses use social media for business operation, including product promotion and customer education (Go-gulf, 2014). For instance, 70% of business-to-consumer (B2C) marketers acquire shoppers through a Facebook Page (Go-gulf, 2014) while 83% of business-to-business (B2B) marketers use social media to increase brand awareness (Dalglish, 2015). Not only facilitating the relations with external parties, social media is also widely adopted as a tool for exchanging inter-departmental and intra-departmental information or progress.  

While social media introduces a new way to raise brand awareness and to strengthen communication, it also poses potential risks and threats to the business. It is difficult to verify the vast amount of information available on social media platforms, on which the fast spread of untruthful information on the platforms can ruin a brand image. To safeguard their image, companies have to put extra effort in maintaining good public relations, which consumes a substantial amount of time and management cost. This costly action might be able to keep their followers’ attention, but such attention might not yield profits for the company. Such phenomena suggest that social media has become a prevailing business strategy and has changed the ecological system of business, along with benefits and pitfalls.

This paper first illustrates how social media has altered the form of business in the digital era, followed by analysing how companies make use of social media platforms and analytics tools to generate leads and the effectiveness behind the strategies. It also investigates whether increasing number of “likes “in social media platform have any direct positive correlation to corporate financial profits. Furthermore, it also examines the impacts on individuals and society exerted by the business changes. At the end, there will be a discussion about what opportunities and challenges social media may give rise to in the future, including opportunities of integrating social media with traditional media and risk of data leakage.

Company Strategy with the Use of Social Media

Social media not only acts as a platform for business to raise brand awareness and expand the business size, but also acts as a valuable tool of diversified functional areas, including selection and recruitment, workplace communication and employee training. This section illustrates how companies use social media as a medium to formulate their internal and external business strategies.

Internal Communication

i. Selection and Recruitment process

Traditionally, companies usually hired talents through job postings on newspapers or internal referrals.  With the growing popularity of the use of social media, companies make an effort to immerse social media into their recruiting strategies. For example, some companies seek potential candidates by sharing latest companies’ news and hiring posts on social media platforms, such as LinkedIn, as they believe that it is a more effective, more user-friendly and more career oriented channel (Thurman, 2013) to engage more with existing employees and potential candidates, especially young professionals.