ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel
  • »
  • Business and Employment»
  • Small Businesses & Entrepreneurs

SMEs by Use of Social Media - Part 3

Updated on April 9, 2017
Ashish Dadgaa profile image

Ashish Dadgaa is a young entrepreneur with 7 years of experience in the business environment. He writes about business strategies & secrets.

SME and Social Media

All around the global economy, SMEs sometimes face serious challenges against competition and the key to maintain a competitive advantage for these SME’s is social media, including technological innovations. Estimation of precisely what number of SMEs make use of social media has a tendency to vary wildly. A study carried out by LinkedIn in February 2016 showed that 86 percent of SMEs were using social media while another study carried out by European commission at the end of 2016 across 6 member states revealed 71 percent. However, it has to be considered that the European review consisted of extra information which tended to support the theory that using social media was a beneficial strategy. In fact, the results obtained were 29 percent of SMEs utilizing social media agreeing that their organizations were performing better than it was 3 years ago at that time.

Furthermore the percentage of businesses not engaged in the adoption of social media just 18. SMEs are generally small businesses with not a high number of employees. This can be a very helpful issue because people want to do business with ‘real’ people meaning that small businesses are in some ways better placed than very large companies in terms of ‘one to one’ contact with customers. In this sense, SMEs are likely better set to strike the right tone and exploit the advantages of social media, basically on the grounds that they are more adaptable and versatile.

Benefits of Social Media to SMEs


The firms are using the force of social media to discover advanced business opportunities, gatherings of people and organizations of similarly invested people and organizations and new sources of industry particular knowledge and expertise. A major blessing of social media to SME is a gain of competitive advantage over competitors. Social media marketing is a much better approach than marketing through television and radio because of some reasons. One simple reason is that social media allows two-way communication as opposed to television and radio. Furthermore according to the author social media can boost up a competitive advantage by expanding the market beyond boundaries, identifying the needs of customers by studying their lifestyle.

In addition, social media can generate higher customer support. This happens when you show interest towards your clients. For example establishing a blog or even social media page where customers can give their feedback will really make them feel motivated. Another benefit is that you can promote your business internationally because social networking sites are used worldwide. As soon as people notice your social media page on the internet and start liking it, there’s a big possibility that it becomes famous overnight. Here we can think of Branding prospects too. Creating brand awareness can be viewed as another advantage generated by engaging social media tools in enterprises and 78% of SMEs suggested that social media is an effective way of expanding brand awareness. In addition, social media lessons time taken to perform a task. This is so because social networks make communication faster and easier by reducing the time information and data would take to flow between workers

Threats of Social Media to SMEs

There are some major threats that small businesses may face in regard to social media and networking. One possible concern to the management of a business due to the use of social media is the risk of tarnished reputation to the business which can occur through online posts. For example, if an employee is furious because of being yelled and taunted by his boss, the former may have the tendency to vent out his anger online by posting discouraging stuff about the company or he may misbehave with clients online just because he is angry. If the posting is offensive towards the company or co-workers then the employers have the authority to blame the employees and therefore even fire them out. Another threat is the risk of decline in productivity. There is a belief that the use of social networking sites can hinder fast and efficient productivity process.

Employees are given computers, provided with internet connection so as to perform their tasks as effectively and efficiently as possible. However, some of them prefer to spend large amounts time surfing on the internet. There are many employers fear that employees may be spending unnecessary time on websites, therefore, neglecting their work which lowers productivity and expanding security risks to the company by sharing data elsewhere. One more concern is the risk of hacking performed by cyber crooks. Cybercrime is a growing threat for businesses because of its capacity to destroy a whole company. Cyber criminals are more likely to attack small businesses due to the possibility of larger returns. Vital documents, marketable strategies, financial records and other company and individual information may drop out and get hacked. According to an investigation done by IBM and Ponemon institute in 2015, hackers are costing businesses in the UK around £2.37m a week.

Achieving Competitive Advantage Through The Use of Social Media

Resource Based Theory

It is the capability of a business to attain its aims that determine its competitiveness. A good strategy generates competitive advantage. The resource-based theory is about resources possessed by a company in comparison to its rivals which leads to competitive advantage.


The usage of IT in businesses can lead to success through the use of resource-based theory. However, by making use of social media tools and technology which form part of intangible assets that the firm own, SMEs can engage in niche marketing which allows to gain a competitive advantage over other competitors.

Michael Porter (Five Forces Model)

The competitive advantage is gained by a firm when its actions in an industry create economic value and when few competing firms are engaging in similar actions. The five forces which can increase competitive advantage in an industry.

There is a value chain approach for this model. The value chain consists of activities and processes such as production, marketing, technology development, outbound and inbound logistics, operation, and services. By concentrating on the innovation improvement, for example, the presenting of social media tools in the business lead to the competitive advantage which thus adds to value chain in the association.

Your Opinion

Was this article informative and useful?

See results

© 2017 Ashish Dadgaa


    0 of 8192 characters used
    Post Comment

    No comments yet.