TheImpact of Internet on Business
Themarket environment in which businesses of the contemporary societyare operating is argued to be marred with different forms ofchallenges that call adoption of informed strategies to enable themgrow and realize profitability. For instance, the evolution of theworld has been accompanied by globalization, which implies thatcompanies across the world can operate seamlessly as if they werebased in one region, resulting in heightened competition. Thesocioeconomic developments have also been accompanied by growingregulations, which have essentially increased the financialrequirements for operations, further constraining the resources thatcould have allocated to other growth and survival purposes. Theconsumers are also demanding in terms of quality of products and thecontributions that the businesses have to give to the consumers andthe society, in what has come to be referred to as socialresponsibility. For players, this scenario essentially invites thequestion of what businesses can do to be able to overcome thechallenges while fulfilling their main goals.
Althoughseveral suggestions have often been discussed, the recommendation foradoption of technologies, especially the social media, is perhaps oneof the most notable. The proponents have tended to argue that suchtechnologies are a source of competitive advantage, and that successin the market is ideally a war of technologies. However,counter-arguments have also been noted. Therefore, the question ofintrigue is whether these technologies can effectively serve as asolution to business challenges.
Thepurpose of this paper is to examine the impact of technologies onbusiness productivity, focusing on the internet and social media. Areview of literature and trending developments in practice presentsthe internet as a tool that is so indispensable for business success,but to be able to realize its full utility potential, businesses haveto beware some limitations.
ThePositive Impact of Social media
Indeed,the benefits of social media to businesses can be seen in many ways.One of the notable examples of how the social media is benefittingbusinesses is by serving as a channel by for product promotion andadvertisements. According to Goyal, virtually all businesses,including small, medium, and large enterprises are looking to socialmedia for advertisements. This trend is manifested by the growingsocial media advertisement budget. In the case of the United States,for instance, the budget for social media advertisement has increasedfrom 16 million dollars registered in 2014 to 31 million dollars in2016 (Goyal 34). This trend essentially shows that firms areincreasingly discovering the potential role of social media inboosting their performance, and are giving in to have social mediaowners help them realize their dreams. The social media companies arealso responding by designing various marketing tools to meet theconsumer demands. Facebook, Linkdln and Twitter have been leading theway in revolutionizing the social media marketing. Other companiessuch as Snapchat, Instagram and Pinterest have joined the race byunveiling marketing services on their platforms. While the process ofmeasuring the impact of social media advertising on actual businessperformance such as profitability, it has been largely contended thatsocial media has the capability of reaching a large audience ofpotential consumers, many of who are signed and active on the socialmedia. Social media can help foster brand awareness as well ascommunicate different forms of information about company initiativessuch as promotions and social responsibility (Goyal 24). In thisregard, businesses should embrace social media for advertisements.
Thesecond notable function of the internet technologies such as thesocial media is underpinned on its ability to support customerrelation management. According to Dorota, customer relationshipmanagement platforms refers to the strategies, technologies andpractices that businesses employ in managing customer relations andanalyzing customer interaction data throughout the lifecycles ofcustomer purchase behaviors. The customer relationship managementexists to help improve the relationship between the business and itscustomers, help support customer retention, and foster sales.Typically, the platforms of customer relationship management aredesigned in the manner that allows them to collect information aboutthe consumers in different channels, including the points of contactbetween the business and the sales, the company website visits,telephones, direct mail, live chats, and social media. The managementsystems also have detailed personal information about customers andtheir preferences, which are aimed at enabling businesses to providetailor-made products and services (Dorota 23).
Apartfrom advertisement and customer relationship management, the internettechnologies are also beneficial to businesses because they supportonline retailing processes. As Simona, Iuliana, Luigi and Mihai,explains, as opposed to the past in which consumers needed interactwith businesses face-to-face to make purchases, the technologicalrevolution has changed modus operandi, especially now that purchasescan be made remotely using online retail platforms. Many companiesare offering online retails services, with Amazon and Uber as only afew notable examples. In essence, technologies have improved theretail experience by stepping up flexibility and convenience (Simona,Iuliana, Luigi and Mihai, 1834). In the view of this point,businesses are encouraged to embrace online retailing to maximizesales.
TheNegative Impact of Social Media
Althoughthe internet and social media technologies are indispensable forbusiness success, they have certain inherent limitations that canderail performance, which concerned enterprises must beware andexercise checks to be able to leverage underlying competitiveadvantage. One of the limitations of the social media is negativepublicity. As much as the social media lends itself as a pivotal toolthat firms can rely upon to drive their advertisements, they can alsoa harmful tool for conveying information that can destroy thereputation of the organization. The information can arise out ofmalicious motives spreading rumors about the organization to earnpublic attention, or can target organization weaknesses and expose’(Simona, Iuliana, Luigi and Mihai 1834).
Thesecond limitation is security. The security challenge is borne on therampant trend of cyber crimes, including identity theft, hacking,date breaches, phishing, spoofing and hacking, which havefar-reaching consequences on the operation and outlook on affectedvictims. Indeed, the statistics of cyber security breaches aredocumented and reveal their impacts on businesses to be profound. Forinstance, according to Meola, the online fraud attacks have increasedby 11 percent in the last decade. For every 1,000 e-commercetransactions, 27 frauds were evidenced. Out of 100 dollars spentonline, about 4.5 dollars risks fraudulent attacks. Moreover, thecost of cyber fraud online retails in the United States is well over$32 billion (Meola 45).
Thethird notable challenge is how to measure the success of social mediaadvertisements on business performance. In fact, there have beenconcerns that since it is inherently difficult to measure the impactof social media advertisements on business success, there are chancesthat the benefits are not always straightforward to some firms, andthat firms need to be keen when prioritizing social mediaadvertisements (Simona, Iuliana, Luigi and Mihai 1834).
Onthe overall, perhaps the most intriguing question is whether it ispossible for businesses to overcome these challenges and reap thebenefits of the technologies. The answer is certain and it is yes —firms should be ready to deal with negative publicity by striving toset its reputational record straight, embrace measures securitysolutions to curb cyber crimes and know when and the extent to relyon internet technology for business promotions.
Inconclusion, the purpose of this paper has been to examine the impactof technologies on business productivity, focusing on the internetand social media. It has successfully shown that, based on a reviewof literature and trending developments, the internet is tool that isindispensable for business success, yet businesses have to bewaresome limitations to realize its full utility potential. One of thenotable examples of how the social media is benefitting businesses isby serving as a channel by for product promotion and advertisements.The second notable function of the internet technologies such as thesocial media is underpinned on its ability to support customerrelation management. Apart from advertisement and customerrelationship management, the internet technologies are alsobeneficial to businesses because they support online retailingprocesses.
However,it has also been noted that the internet and social media hasinherent weaknesses that concerned businesses should beware and takeprecautions. The limitations pertain to the concerns of negativepublicity, the cyber security challenge and the inability to trackthe performance of social media advertisements on actual businessprofitability and sales performances. Business can easily overcomethese by devising strategies of dealing with negative publicityembracing measures security solutions and knowing when and the extentto prioritize the internet technology for business promotions.
DorotaJelonek.TheEvolution of Customer Relationship Management SystemIveyBusiness Journal,2(2):34-45
Goyal,S. Advertising on social media. ScientificJournal Of Pure And Applied Sciences,2(2013), 220-223
Meola,Andrew. Onlinefraud attacks in the U.S. are growing at an alarming rate.2016. Web. 6thJanuary 2017.<http://www.businessinsider.com/online-fraud-attacks-in-the-us-are-growing-at-an-alarming-rate-2016-4>
Simona,Vinerean., Iuliana, Cetina., Luigi, Dumitrescu and Mihai,Tichindelean The Effects of Social Media Marketing on Online ConsumerBehavior. InternationalJournal of Business and Management8(14): 1833-8119. Print