Business Research Report: Exploring Social Media Advantages

This report explores the increasing use of social networks in business, highlighting both the advantages and disadvantages. It discusses how social networks enhance communication, promotion, and customer engagement, citing examples like Martell Home Builders and Giantnerd. However, it also addresses the risks, such as reputational damage (as seen with McDonald's Twitter campaign), security threats, and the potential for misuse of information (illustrated by the Ryanair controversy). The report further examines how social media aids in analyzing customer satisfaction and brand awareness, exemplified by Ford and Zappos, while also noting the rise in hacking incidents and privacy concerns. It concludes that while social networking offers competitive advantages and improved marketing, businesses must carefully consider the associated risks and balance them with traditional marketing methods.

RUNNING HEAD: BUSINESS RESEARCH
Business Research
Advantages and Disadvantages of Using Social Networks in Business

Advantages and Disadvantages of Using Social Networks in Business 1
Table of Contents
Introduction................................................................................................................................2
Project Objective........................................................................................................................3
Project scope..............................................................................................................................4
Literature review........................................................................................................................5
Conclusion................................................................................................................................12
References................................................................................................................................13
Appendix..................................................................................................................................15
Quality and currency of articles and sources used in the research.......................................15
Identification of gaps............................................................................................................16

Advantages and Disadvantages of Using Social Networks in Business 2
Introduction
Social networks are an important element of the business environment which is widely used
by the businesses all around the globe. Use of social networks in business is increasing due to
various reasons. This research program will develop the knowledge of various advantages
and disadvantages of using social networks in business.
Figure 1: Social network for business
Source: (In Gram Micro Advisor, 2017)

Advantages and Disadvantages of Using Social Networks in Business 3
Project Objective
The objective behind the execution of this research program is to gather data related to the
pros and cons associated with the use of social networks for businesses. This information will
help in gathering information related to the use of social networks and factors which affects
the decision of business regarding the use of social networks.

Advantages and Disadvantages of Using Social Networks in Business 4
Project scope
This research will discuss the views of the different authors related to the advantages and
disadvantages of using social networks for business. This research will focus on providing
knowledge of these advantages and disadvantages attached with the use of social networks
for the business.

Advantages and Disadvantages of Using Social Networks in Business 5
Literature review
In the words of Vevere (2015), the term social networks can be explained as those platforms
used for the purpose of promotion of the social interactions and personal relationships
between the different individuals. There has been a rise in the use of social networks by
businesses for the attainment of the objectives of the business. With the change in the
business environment, a change has been identified in the tools used by the businesses for the
promotion of the products or services of the business (Smith & Vardiabasis, 2010). The use
of social network is not limited to the promotion of the products or services offered by the
business but social networks are being used for interacting and establishing healthy social
relationships with the customers and potential customers (Agresta, et. al., 2010).
Different individuals have different views towards the use of social networks for the business.
These views help in determining the behavior of the business towards the social networking
platforms for business. For example, Martell Home Builders, an Atlantic Canadian custom
homebuilder has adopted a content creation and blogging strategy for the purpose of focusing
on the needs of the home buyers of the company. This strategy has helped the company in
attracting the home buyers which has helped in enhancing the customer base of the company
(Lee & Chen, 2011).
According to Ciprian (2015), competition in the business environment is increasing due to
which need to use innovative tools also increasing. Use of social networks has enhanced the
performance of the business. Impact of the social network needs to be determined with the
analysis of the various factors associated with the use of social networks. Social networking
enhances the chances of growth and success of the business. Social networks have helped
business in enhancing the communication process between the company and different
stakeholders of society. Different social networking platforms are available which can be

Advantages and Disadvantages of Using Social Networks in Business 6
used by the business. These different social networking platforms are Skype, Twitter,
Facebook, Linked In, Youtube and many more (Brown, 2012).
Business can communicate with the different stakeholders of the business in a better manner.
The flow of information needs to be maintained in an effective manner for the purpose of
ensuring that the information is shared properly and effective in meeting the objectives of the
business. It is vital for a business to communicate with the different stakeholders including
employees, customers, and society. Social networking platforms have replaced the traditional
promotional methods. Businesses are conducting their promotional activities with the help of
social networks (Tat, 2014). For example, Giantnerd is selling outdoor equipment for the
outdoor activities. It has integrated social media into every aspect of its website. It has used
different social networking platforms for getting feedback from the customers. This approach
has helped in engaging the customers and developing trust among the customers and potential
customers of the business (Porterfield, 2011).
On the contrary, there are various negative aspects associated with the use of social
networking platforms. Social networking platforms create an impact on the reputation of the
business as customers are free to express their views on social networking platforms.
Business has no control on the views of the users of the social networking platforms. This can
create harm to the reputation of the business. Another disadvantage of using social
networking platforms includes the requirement of time. Business needs to devote time for
managing the social networking accounts of the business and information shared on the social
networking platforms (Zaglia, 2013). The Internet is an open medium and this aspect of the
internet can be used by the competitors of the business for gaining an advantage. For
example, McDonald's initiated a Twitter campaign which was aiming at promoting the brand
and engaging the customers. McDonald's used hashtags #Meetthefarmers and #Mcdstories.
The fast-food chain faced horror stories where customers were using these hashtags for

Advantages and Disadvantages of Using Social Networks in Business 7
complaining regarding the quality of the food, sanitary conditions of the restaurant and
treatment from the employees. This campaign proved a failure for McDonald's (Costill,
2014).
In the words of Lei & Huang (2014), social networking platforms help the business in
analyzing the satisfaction level of the customers as well as the behavior of the customers
towards the products or services offered by the business. Information can be shared in a better
manner with the use of social networking platforms and businesses can use social networking
platforms for analyzing the traffic towards the business. For gaining a strong customer base,
there is a need to adopt effective approaches for reaching the customers. Social networking
platforms are helpful in attracting the customers towards the business and contribute towards
the sales of the business. Social networking platforms serve as a medium for exchanging
information between the customers and business. Nowadays businesses are using social
networking platforms for analyzing the issues which are being faced by the customers.
Changes can be implemented on the basis of the feedbacks collected from the customers. For
example, Ford Motor Company has used social media for the marketing of the products. Blog
of Ford shares the ford story which helps in presenting the innovative layouts in front of the
viewers. Regular updates are provided to the viewers regarding the updates in the products
offered by Ford (Patel, 2015).
On the other hand, increasing use of social networking platforms has increased the threat to
the confidential information of the business. Companies are sharing their information on
social networking platforms and hackers can hack these accounts which will result in
financial implications as well as harm to the confidentiality of the business. Business needs to
manage the social networking platforms on regular basis for ensuring that current data is
updated. Business needs to devote time for the purpose of maintaining these accounts.
Business may get diverted from the main activities. Customers have the power and this power

Advantages and Disadvantages of Using Social Networks in Business 8
may get misutilised by an individual or group of individuals for their personal interest.
Information shared on the social networking platforms may create harm to the interest of
individual or group of individuals. This can result in adverse impact on the goodwill of the
business as well as increases the cost of the business (Neumeyer & Santos, 2017). For
example, Ryanair has used social media platforms which have resulted in a controversy in the
year 2012 in which CEO of the company posted “Stupid” passengers deserve fees. This
resulted in a huge controversy for the company (Costill, 2014).
Social networking platforms have helped in increasing the sales and profitability of the
business. Social networking has helped the business in performing the promotional activities
of the business. It is providing a competitive advantage to the business for coping with the
increasing competition in the business environment. Better exposure is gained by the business
which can be used for enhancing the performance of the business (Shafigullina & Palyakin,
2016). It is an effective approach which is used by the businesses for the purpose of
enhancing the performance of the business. On the other hand, there has been a rise in the
number of cases of hacking due to which companies have suffered a lot. Privacy issues are
being increased which have resulted in a decrease in the sales of the business as well as the
performance of the business. The negative impact of social networking can be seen on the
customer base of the organization (Manca & Ranieri, 2016).
Business can generate positive outcomes with the use of social networking platforms. The
number of users using social networking platforms is increasing which has resulted in an
increase in the use of social networking platforms. A social network is a two-way approach
which enhances the communication process and enhances the chances of success of the
business. Businesses are using social networking platforms for marketing the products of
business in a better manner. Business is taking decisions regarding the operations of the
business on the basis of the information collected with the help of social networking

Advantages and Disadvantages of Using Social Networks in Business 9
platforms (Franco & Pais, 2017). It is an effective approach which is used for spreading
brand awareness among the society. For example, Zappos, an online retailer which has used
first ask for the Like and then asking for joining the email list. This social media approach
has helped in developing a healthy relationship between the company and its customers
(Porterfield, 2011).
On the other hand, there are various aspects related to the use of social networking which has
affected the performance of the business adversely. With the rise in the use of social
networking platforms, there has risen in the issues related to social networking. Business
needs to consider these issues while selecting the tool for the promotion of the products or
services of the business. Traditional methods of marketing are being used by the businesses
for promoting the products or services offered by the business. Few businesses are
considering traditional methods more reliable for the promotion of the products and services
of the business. Traditional methods of marketing protect the information being misused by
the others for fulfilling their interest. Social media or social networking platforms are not
capable of reaching each and every individual as internet services are not available or people
do not possess a proper knowledge of the manner in which social networking platforms are
used (Park, et. al., 2012).
According to Brown (2012), for the purpose of enhancing the relationship between the
business and customers, social networking platforms can be used. It is an effective approach
for attracting the customers towards the business. Loyalty can be generated among the
customers with the use of these platforms. The trend of the business environment can be
analyzed with the help of social networking platforms. The main motive of business is to
enhance the customer base and retaining the customers. Social networking platforms help
business in enhancing the communication between the company and employees. These
platforms have made it easy for the business to disclose the information related to the

Advantages and Disadvantages of Using Social Networks in Business 10
business in a better manner. The social network is a revolution in the business environment
which has enhanced the manner in which marketing activities of the business are carried out
(Zaglia, 2013).
Social media platform is economic and these can be used by the businesses of different size
of businesses. Business can collect feedbacks with the help of social networks in a better
manner. It is not feasible for a business to communicate with each customer but the use of
social networks has resulted in interacting with a large number of customers in a better
manner. This marketing tool has helped in bringing the different communities of the society
together (Manca & Ranieri, 2016). On the other hand, feedbacks collected with the help of
these platforms can be manipulated by the individual for their personal benefit. Business
needs to ensure the safety of the social networking accounts for ensuring the confidential
information. Various threats can be faced by the business with the use of social networking
platforms. Business needs to put efforts for the purpose of operating social networking
accounts (Lee & Chen, 2011).
Figure 2: Social media business opportunities
Source: (Steve, 2012)

Advantages and Disadvantages of Using Social Networks in Business 11
Conclusion
Thus, it can be summarised that businesses are using social networking platforms for
enhancing their performance and attainment of the objectives of the business. This report has
discussed various advantages and disadvantages of social networking platforms. Views of the
different authors have been discussed in this research program which has been discussed in
this research.

Advantages and Disadvantages of Using Social Networks in Business 12
References
Agresta, S., Bough, B. B. & Miletsky, J. I., 2010, “Perspectives on Social Media Marketing”,
Boston: Course Technology PTR.
Brown, S., 2012, “Social Information Gaining Competitive And Business Advantage Using
Social Media Tools”, Burlington: Elsevier Science.
Ciprian, P., 2015, “The Growing Importance of Social Media in Business
Marketing”, Quaestus, no. 7, pp. 94.
Costill, A., 2014, “35 Examples of #SocialMedia Fails”, SEJ. Accessed on: 21 September
2017. Retrieved from: https://www.searchenginejournal.com/35-social-media-fails/95613/
Franco, M. & Pais, L., 2017, “Exploring the advantages of using social network sites (SNSs)
in dental medicine organisations”, International Journal of Health Care Quality Assurance,
30(4), pp.385–396.
In Gram Micro Advisor, 2017, “How Social Media and Business Communication Can
Increase UCC ROI”, In Gram Micro Advisor.
Lee, S. & Chen, M., 2011, “An integrative research framework for the online social network
service”, Service Business, 5(3), pp.259–276.
Lee, S. & Chen, M., 2011, “An integrative research framework for the online social network
service”, Service Business, 5(3), pp.259–276.
Lei, H. S. & Huang, C. H., 2014, “Geographic clustering, network relationships and
competitive advantage”, Management Decision, 52(5), pp.852–871.
Manca, S. & Ranieri, M., 2016, “Facebook and the others. Potentials and obstacles of Social
Media for teaching in higher education”, Computers & Education, 95, p.216.
Neumeyer, X. & Santos, S.C., 2017, “Sustainable Business Models, Venture Typologies, and
Entrepreneurial Ecosystems: A Social Network Perspective”, Journal of Cleaner Production.

Advantages and Disadvantages of Using Social Networks in Business 13
Park, S. H., Oh, W. & Han, S. P., 2012, “A social network-based inference model for
validating customer profile data. Special Issue: Business Intelligence Research)
(Report)”, MIS Quarterly, 36(4), pp.1217–1237.
Patel, S., 2015, “7 Examples of Companies Using Social Media Right”, Medium. Accessed
on: 21 September 2017. Retrieved from: https://medium.com/@sujanpatel/7-examples-of-
companies-using-social-media-right-c646f445875c
Porterfield, A., 2011, “9 Companies Doing Social Media Right and Why”, Social Media
Examiner. Accessed on: 21 September 2017. Retrieved from:
https://www.socialmediaexaminer.com/9-companies-doing-social-media-right-and-why/
Shafigullina, A. & Palyakin, R., 2016, “Social Media Marketing as an Effective Instrument of
the Promotion of Social Business-Project in Social Entrepreneurial Activity”, Academy of
Marketing Studies Journal, 20, pp.1–7.
Smith, W. R. & Vardiabasis, D., 2010, “Usingsocial media as a competitive advantage: the
case of smallbusinesses”, Problems and Perspectives in Management, 8(4-1).
Steve, 2012, “Social Media Business Opportunities”, TechXB.
Tat, U., 2014, “Social Media And Its Effects On Individuals And Social Systems”,
Management, Knowledge and Learning International Conference.
Vevere, V., 2015, “Impact Of Social Media On Interpersonal Communication Patterns”,
Socialinių mokslų studijos. 7(1): 124–138.
Zaglia, M.E., 2013, “Brand communities embedded in social networks”, Journal of Business
Research, 66(2), pp.216–223.

Advantages and Disadvantages of Using Social Networks in Business 14
Appendix
Quality and currency of articles and sources used in the research
For the purpose of ensuring the quality of the research, quality articles, journals and internet
sources have been used. Data used in this research is collected with the help of secondary
source of data collection and sources which have been published after the year 2008.
References are properly listed in this research program with the title, name of the authors,
publication years and other relevant details.

Advantages and Disadvantages of Using Social Networks in Business 15
Identification of gaps
This research program has discussed different advantages and disadvantages of applying
social networking as a tool for the marketing of the products or services of the business.
There are few gaps which have been identified in this research program. This research has not
covered the factors which motivate the business to use social networking platforms. This
research has not covered the trend of the use of social networks for business.