The Impact of Digital Technology on the Business Activity of SMEs

This research project investigates the impact of digital technology, specifically social media, on the business activity of Small and Medium Enterprises (SMEs), using Crafted Agency as a case study. The report explores the background of digital technology's influence, the importance of building strong customer relationships in the modern business world, and the role of social media in improving the customer base. The methodology includes a literature review, outlining the concept of social media and its significance, followed by a thematic data analysis. The project aims to determine how social media influences customer relationships, addressing research objectives that include understanding social media's concept, determining the importance of customer relationships, and identifying social media's impact on customer base improvement. The findings are presented with recommendations and conclusions, offering insights into how SMEs can leverage digital tools for improved business outcomes, and how Crafted Agency can enhance its customer base through social media engagement.

RESEARCH PROJECT

Table of Contents
CHAPTER 1 – INTRODUCTION..................................................................................................3
1.1 Overview of the Research.....................................................................................................3
1.2 Background of the Research.................................................................................................3
1.3 Rational of the Study.............................................................................................................4
1.4 Significance of the Research.................................................................................................5
1.5 Research Aim........................................................................................................................5
1.6 Research Objectives..............................................................................................................5
1.7 Research Questions...............................................................................................................5
1.8 Time Scale.............................................................................................................................6
CHAPTER 2 -LITERATURE REVIEW.........................................................................................6
2.1 Introduction...........................................................................................................................6
2.2 Concept of social media in modern business world..............................................................7
2.3 Importance of building strong relationship with customers at global level..........................8
2.4 Identify the impact of social media in improving customer base........................................9
CHAPTER 3 – RESEARCH METHODOLOGY...........................................................................9
3.1 Introduction...........................................................................................................................9
3.2 Types of investigation.........................................................................................................10
3.3 Research philosophies.........................................................................................................10
3.5 Research approaches...........................................................................................................10
3.6 Sampling.............................................................................................................................10
CHAPTER 4 – DATA ANALYSIS..............................................................................................10
Thematic analysis......................................................................................................................12
Data analysis.............................................................................................................................14
CHAPTER 5 – CONCLUSION AND RECOMMENDATION...................................................24
5.1 Introduction.........................................................................................................................24
5.2 Recommendation.................................................................................................................24
5.3 Conclusion...........................................................................................................................25
REFERENCES..............................................................................................................................26

TOPIC
“The impact of digital technology on business activity of SME’s “
CHAPTER 1 – INTRODUCTION
1.1 Overview of the Research
Digital technology can be defined as a branch of science which is enclosed with all types
of electronic tools and applications which is kept in numerical code form. As time is changing,
digital technology started playing a crucial role in human's life by providing them gadgets that
improves upon efficiency and convenience. In today's world, many organisations have adopted
digital technology at a priority level and implemented it in every single department because it
has helped them in running business with improved efficiency and effectiveness. In past few
years, it has been found that companies that have made themselves digitalised are able to avail
improved profit margins and productivity level as well (Bengtsson and Johansson, 2014). Firms
that are still using traditional ways of building relationships with customers are becoming less
capable of enhancing their customer base. On the other hand, there are many digital technology
tools like cloud technology, social media, Internet, Artificial intelligence and many more which
builds effective relationship between customers and business of a company. From which
investigator in present research report have used social media to understand its concept while
building stronger relationships with customers.
Apart from this, small firm which has been chosen under this report i.e. Crafted Agency
which was found in the year of 2005 and is delivering entire marketing services to its clients. In
recent years, there is a decline was seen in profit margins because of no direct communication of
business with its customers. Thus, taking in use of social media can be helpful for this company
and build up relations with targeted consumers.
1.2 Background of the Research
Updates in technology has changed the ways of thinking of humans. Adopting digital
technology in business world may aid companies in developing or growing in much effective
ways. In past decades, organisations did not use to make efforts in order to build their
relationship with customers. They used to believe that a consumer will reach to them whenever
there will be a need (Berends and et. al., 2014). Somehow this, statement was right because
business people did not had much option to connect with its customers or improving their

relations with them. There was only one way of communicating which was when a consumer
reaches to their outlet or store. Today, things have changed and digital technology has given
opportunity to business organisations to communicate with its customers directly. With the help
of social media, a company can easily provide details of products and services which has been
offered by them. This can be considered as a good example of direct communication of
organisation with its customers. Feedbacks, online chatting and resolving queries over social
media page of firm can easily help in building up a strong relationship with users.
Here, issues which was faced by Crafted was that there customer base was not getting
stronger because of lack of direct communication with users at the time they faced issues. But,
being as a marketing firm, it is required for this company to understand the concept of social
media because it may easily raise number of chances of improving relations with its users. With
the help of social media tools like Facebook, Instagram, LinkedIn and many more, Crafted can
easily go to a whole new level and improve their customer base. On the other hand, it has also
been found most of people in modern world stays active on social media as this is one of new
way of staying connected with others. Thus, using social media in order to build up relations
with consumers may aid them in building reputation at international market.
1.3 Rational of the Study
Major aim of investigation of present project is to ascertain the impact of social media in
building effectively relationship with customers at global level. As today many business firms
are still using traditional approaches to build relationship with its customers. But at international
level, it is impossible for a company to reach to every single customer and resolve their issues
which has been faced by them after using its products. Thus, social media is a platform where
most of people stays active with an aim to build relations with others. This can be taken as an
opportunity for companies to build up their relations with customers. Rise in competition has
brought up risks as well for business firms who are dealing in the same sector. As organisations
are required more to manage their market shares with better and effective diligences than
competitors. There are ample number of marketing companies present in all over United
Kingdom that are offering good services to their customers (Dutta and Bose, 2015). Therefore, it
might not take much time when a consumer switch from one company's products or services to
another.

This scenario may impact over productivity and profitability of Crafted and it is much
important for them to build up strong relationship with its customers. Here, resolving small
issues over internet, paying back the money, asking for any problem which has been faced by
users are some of major factors through which Crafted can easily build up right relationship with
its customers.
1.4 Significance of the Research
Main objective of choosing mention topic by project makers is to evaluate how social
media helps a firm in making connection and developing relations with customers. But, as
change in course which made alterations in all over the areas of a business world. At global
level, for companies it has became really very vital to take in use of different social media like
Facebook, LinkedIn, Instagram, etc., to stay connected with its customers. Here, an issue which
was faced by Crafted was that their customer base was not improving. Reason being, they were
using traditional approach only to stay connected with them. This impacted negatively on profit
margins and other ratios. Thus, it is much required for the company to adopt right social media
tools in order to develop strong relationships with consumers.
1.5 Research Aim
A research without an aim cannot be completed. Thus, it is important for investigator to
set a proper aim. In present research, “To determine the influence of Social Media while
building stronger relationship with customers at global level” A case study on Crafted. as an
aim has been made by researcher.
1.6 Research Objectives
In present context, some of questions are prepared on set aim and these are given below:
 To understand the concept of social media in modern era
 To determine the importance of building strong relationship with customers at global
level
 To identify the impact of social media in improving customer base
1.7 Research Questions
1. What is the concept of social media in modern business world?
2. What is the importance of building strong relationship with customers at global level?
3. How social media impacts on improving customer base?

1.8 Time Scale
CHAPTER 2 -LITERATURE REVIEW
2.1 Introduction
The literature review part consists of printed information in a specific subject area. Its a
summary of sources. It is in-depth evaluation of the research was previously conducted and
summary of specific area of research which allows readers to gain more knowledge in

specific area of concern. Following is given literature review of research objectives which
is stated as under -
2.2 Concept of social media in modern era
Social media consists of websites and application that has grown rapidly over the last few
years which provides a user with platform to create and share their content. It is considered as an
important tool for a company by which employers can develop connection with large number of
customers living at distant place more easily (Godey, B., and et. al., 2016). Today, people use
social media much for purchasing products or services of enterprises in order to satisfy their
desires. Many firms have used social media networks for marketing and promotion of goods in
order to reach broad and diverse population all around the globe. Firms which use digital
technology in business operations, have easily developed social media competence due to its
greater experience of leveraging digital transformation to acquire and provide the appropriate
information. According to SMITH. K. (2017) 71% of consumers can easily recommend a brand
to others as they have a positive experience of using social media tools.
Creating and developing a website has become most crucial for any corporate association
as it helps to expand market reach of the company in a certain time period. It is overviewed that
firms which are not having active social media accounts miss out the marketing opportunities as
well as unable to get better opportunities in the form of maintaining customer relationships. One
of the main advantage of social media sites is it enable business to interact with its target
audiences in a more convenient and cost friendly manner. It helps company to recognise
customers' needs and demands as well as formulating marketing strategies as well as address
their needs.
Along with this, social media facilitate method of providing and receiving feedbacks, for
example – if customers have problems with the business offerings, they can let the firm know in
right time frame. Social media sites provide an accessible way to consumers as to express what
they feel and provide companies a chance to response and address queries of target audience. By
having these platforms, Crafter Agency can view complaints of customers and assure them that
their problems will be dealt effectively. With the viewpoint of Pinto, (2015) social media
platforms such as LinkedIn and Twitter build up interest among followers who are more
responsive to them than a traditional marketing approach. Most of the corporate entities use
social media marketing in order to promote and advertise their new products without making

people feel like they get overwhelmed by marketing campaigns. Advertisements are strategically
placed within informative posts, it is the effective way for marketing business of a company. So
that social media helps to create awareness about business among a large extent of customers.
2.3 Importance of building strong relationship with customers at global level
Customer relations has become such an important paradigm in modern business because
they are the most valuable assets of a company. Retention of people with products of an
organisation helps in enhancing growth of business. Therefore, developing good relations with
them, is most essential function of a company. According to Bruhn, Schoenmueller and Schäfer,
(2012) customers are the lifeblood for any business association thus to build an efficient rapport
with them is essential to attain market growth and success. A solid relationship with customers
ensure that business will continue to develop or flourish in target market irrespective of market
fluctuations. In order to manage the situation, it is essential for Crafted Agency to provide
necessary information to buyers via events, emails, social media sites etc. this help to keep
people connected with company. Therefore, managing strong relationship with customers aids a
company to determine their needs or demands in the best possible manner and fulfilling the
same will be helpful to a firm to gain high competitive edge in a certain time period. Eckerson,
(2010) revealed that happy customers are more likely to be loyal towards a specific brand and
refers it to other people. This kind of marketing highly effect on sales revenues and profitability
of a business association.
The prime motive of well managed customers' relations turns out to generate loyal buyers
who help out a firm in bad times (Ngai, Tao and Moon, 2015). In Crafted Agency, customer
relations manager distinguish loyalty from satisfaction, noting that customer can be satisfied but
have not specific loyalty. The main goal of customers' relationship management is to increase
client base and retain the existing number of customers' for long run. From a cultural perspective,
ability to build customer relationships and retain those relationships is directly tied to employee
relationships and retention. The retention of customers is a lagging indicator of several efforts,
but certainly if your employees aren’t engaged they won’t engage the customer.
Furthermore, in order to build strong and positive customer relation most of the firms are
utilising communication channels and system which reward long term loyalty. Small business
are focusing on providing feedbacks forms, asking their needs and issues. In addition to this,
companies employ different range of tactics to directly build customer loyalty through

promotions i.e. creating a point system that offers rewards once a customer accumulates a certain
number of points.
Customer relations also helps to improve word of mouth publicity of business of a
company. People are likely to recommend a product or service to their friends and family if they
are getting high quality service experience. Word of mouth promotion has proven to be an
efficient avenue to create hype and promote a trend between target audiences (Ghobakhlo and et.
al., 2012). Therefore, it can be said that efficient relationship with clients can play a significant
role in terms of collecting insightful, reliable and timely feedback from them and ultimately
resulting in attaining higher revenue for the business.
2.4 Identify the impact of social media in improving customer base
In this modern era, rapid innovations in communication channels aid companies to reach
large group of customers and increases its market share in a short-period of interval. Social
media is considered as one of the imperative marketing tool which is acquired for promoting a
brands continuously in emerging markets. The undertaking of social media marketing tools
people aware about the products and services of the company (Goodrich and De Mooij, 2014).
Nowadays, businesses are increasingly opting for social media channels for purpose of
discovering innovative products and to facilitate customer engagement at a global level.
Social media tools of marketing not only strengthen the existing firm to customer firm
relationships, but also develop new differences on conventional options, increasing the ability of
firms to interact in firm- customer dialogue which strengthen their communication. There are
changes in the ease of contact, speed, and nature of these connections. Social media transfer
content to a more diverse group of individuals as compared to mass media (Hajli, 2014). They
develop a ―small-world network where the content can be easily distributed among large group
of people, as network is formulated through voluntary connection and requires fewer steps for
sharing information.
CHAPTER 3 – RESEARCH METHODOLOGY
3.1 Introduction
Research methodology is defined as a way to systemically solve the research problem. It
is an important technique which use for identifying, analysing and processing information about
a certain topic.

3.2 Types of investigation
There are mainly two types of investigation, such as – qualitative and quantitative
research. In which qualitative Research is also termed as primarily exploratory research. It is
used in order to gain knowledge about the opinions, and motivational factors. Whereas
quantitative research is mainly used to enumerate the problem by way of creating numerical data
transformed into usable statistics (Hutter and et. al., 2013). for competition of this project, there
has been use of qualitative research as it results in solving problem or develop for potential
quantitative research.
3.3 Research philosophies
There are two types of research philosophies, which are known– positivism and
interpretivism. In which positivism research philosophy states that only “factual” knowledge can
be gained through observation (the senses), including measurement, is trustworthy. But for this
project, Interpretivism research philosophy is requires which is related with the philosophical
position of idealism, it is used to group together diverse approaches, which comprises of social
constructivism, and hermeneutics; approaches that reject the objectivist view which states resides
within the world independently of consciousness”
3.5 Research approaches
There are mainly two types of research approaches, such as – inductive and deductive
research approach. In which inductive approach is focused with generation of some new theories
which emerge from a relevant data. Therefore, it is associated with quantitative research. While
deductive research approach is a testing theory with begins with hypothesis so, it is relates with
quantitative methodology. Sometimes this is informally called a "top-down" approach (Kerzner
and Kerzner, 2017). For completion of this project, there has been acquired inductive research
approach.
3.6 Sampling
A sample is a group of people, objects, or items that are taken from a larger population
for measurement and concluding this investigation. For completion of this research, a sample
size of 70 respondents has been chosen who are local people of UK.
CHAPTER 4 – DATA ANALYSIS
QUESSTIONAIRE

Name
Age
Email
Q1. Do you think digital technology is crucial for small scale business?
A. Yes
B. No
Q2. What is the most important goal of organization’s digital transformation strategy?
A. To improve customers' experience
B. To optimize business operations and cost
C. To improve product innovation
Q3. Which Digital technology helps companies' to reach large group of customers'?
A. Social media sites
B. Emails
C. Pay per click advertisements
D. Text messages
Q4. Which social media technologies do you use ?
A. Microblogging (Twitter,etc)
B. Social networking site ( Facebook, Linkedin, etc.)
C. Social media sharing (Flickr, YouTube, SmugMug, etc.)
D. Wikis ( Wikipedia, etc.)
Q5. Does the social media helpful in achieving business objectives?
A. Yes
B. No
Q6. Where do you get know about the products and services of the company?
A. From existing customers
B. Internet or social media sites
C. Ads in newspaper and television
Q7. What are the most effective marketing strategies for small businesses?
A. Networking events
B. Internet marketing
C. Social media marketing

D. Advertisement Campaigns
Q8. What feature that is currently not available on social networking sites would you most
like to see?
A. Lack of detailed production innovation
B. Product prices
C. Customer' reviews
D. Transparency about production process
Q9. Give ratings to quality of services offered by Crafted Agency?
A. Excellent
B. Good
C. Average
Q10. Provide Recommendations!! if any by which company can improve its social media
strategy ?
Thematic analysis
Q1. Do you think digital technology is crucial for small
scale business?
Frequency
A. Yes 65
B. No 5
Q2. What is the most important goal of organization’s
digital transformation strategy?
Frequency
A. To improve customers' experience 30
B. To optimize business operations and cost 15
C. To improve product innovation 25
Q3. Which Digital technology helps companies' to reach
large group of customers'?
Frequency
A. Social media sites 30