The effect of the internet and social media on small-sized businesses’ innovation potential

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Table of contents

1. Research problem.....................................................................................................................3

Research question........................................................................................................................5

Literature review..............................................................................................................................5

2.1 Significant interrelationship between social networks and innovation potential on SMEs...5

2.2 Impact of social media on small business performance........................................................7

2.3 SMEs innovation capacity and marketing process................................................................8

1. Outcome...................................................................................................................................9

Reference.......................................................................................................................................10
TOPIC:

The effect of the internet and social media on small-sized businesses’ innovation potential

1. Research problem

Social media has brought multiple opportunities for the small businesses by boosting the

profitable relationship with the customers (Saboo, Kumar and Ramani, 2016). It is true that

in case of small business, it is quite difficult for the companies to reach the target market.

However, Hajli (2014) stated that in the 21st century, social media has brought significant

opportunities for the small sized enterprises to utilize their innovation abilities and reflect

through the platforms to drag the attention of the customers. Social media can be defined as

the potential market platform that helps the small organizations to implement the customer

relationship management strategy (Saboo, Kumar and Ramani 2016). In the organizational

perspective, it can be said that the social media has brought noticeable impact on promotional

activities in the organizations. It has become quite easy for the companies to reach the

customers by ensuring the high social media presence.

The particular study has shed light on the Ming Mei Asian Supermarket, which is a quite

popular grocery shop based on Southport Queensland. With increasing growth in the market,

the company has decided to reach the customers in larger segment. In the current scenario,

the company has aimed to expand its operations to reach the large customer segment. In that

case, the social media influences are driving the strategic marketing decisions of the

company. Investigating on the organizational situation, it has been identified that the business

performance highly gets influenced by the social media activities. Through the social

networking sites improvements in communication as well as marketing techniques, the

growth can be ensured in the workplace (Balakrishnan et al. 2014). In order to improve the

business potentials the social media helps in developing the interaction between

communities, suppliers and business representatives, which indirectly impacts on the sales

revenue.

Analyzing the business environment in Australian, it has been identified that business has

become quite customer centric and innovation has become the common practice in the

market that can promote efficiency (Hudson and Thal 2013). In this situation, expanding the

operation and developing strong relationship management, Facebook has become the only

platform with almost 3bn users. The large customer segment available on the social media

can significantly contribute in improving the innovation efficiency in the workplace. In this

situation developing the innovation process strategy based on social media platforms can

bring huge impact on the annual outcome of the company. As stated by Hudson and Thal

(2013), it is true that various researchers have developed the research for analyzing the

impact of social media on marketing process, however, it is true that only the marketing

practices, but also social media contribution is significant in innovation stimulation process.

Through the effective use of web tools, the collaborative approach towards innovation, can

be introduced through the social networks.

As stated by Atanassova and Clark (2015), the social networking sites bring the significant

impact on innovation process. It helps in stimulating the collaboration between

organizational benefits and the customers. Especially focusing on the Ming Mei Asian

Supermarket business, marketing techniques which are beneficial for generating the potential

growth in the workplace can be identified. It can also help in considering the involvement of

people in innovation process.

Research question

How SMEs can generate potential innovation by using the social networking sites?

Literature review

2.1 Significant interrelationship between social networks and innovation potential on SMEs

In the initial stage of business innovation, the tern has been used for defining the research

and development initiatives adopted by the companies in terms of promoting the

technological advancement in the workplace (Diefenbach 2016). However, in the globalized

business environment, the perception among people has got changed. People are introducing

new ideas in the market with the help of different social media platforms. In the current

business scenario, the concept of innovation has got changed in business platform. It is not

limited to the technology. The business model is one of the influencing factors that impacts

on the innovation process in the companies. Various research papers have been developed for

identifying the components, which are responsible for innovation in the workplace. It has

been identified that technological advancement is not enough for dragging the attention of

the customers (Hudson and Thal 2013). Considering the critical factors that influence the

entrepreneurial performance, it has been identified that social networks are the important

influential factors that ensure the collaborative approach between the customers and the

brand. In terms of obtaining the business benefits, social media can be measured as the

effective internet based tool that not only increases the market position, but also it helps in

generating the high profits in the market.

As stated by Kalkan and Bozkurt, (2017), in case of SMEs, it is true that lack of sufficient

resources as well as other facilities, is the major challenges faced by SMEs, which impact on
 their innovation generating process. It is true that due to limited budget, it is challenging for

the SMEs to promote the innovation to the customers. Innovation development is not enough

for the companies, the promotion of innovation is the major practice that influences the

revenue generating process in the companies (Wang and Kim 2017). Through the social

networks, modern methods have been introduced in the market, which has developed the

collaboration between SMEs and customers, suppliers and business partners. Therefore, it

can be said that through the social networks, customers can be aware of the innovation

potentials.

Analyzing the open paradigm introduced by multinational companies, it has been identified

that through the open platform, the large sized companies take the creating idea and

introduce in the market by adding own tag. As its result, the talent as well as creativity of the

small business organizations gets destroyed. As stated by Kalkan and Bozkurt, (2017), due to

unavailability of resources, it was quite challenging for the Small and medium sized

enterprises to introduce their innovative ideas in industrial level. However, through the social

media networks, it has become quite easy for the small business enterprises to promote the

innovative idea in the market by adding own brand name. This process has made significant

impact on generating high growth in the market. Therefore, it can be said that in order to

growth the local economics, this social media networking practices are quite significant.

2.2 Impact of social media on small business performance

Examining the social media based marketing promotional activities, it has been identified that in

order to generate the organizational performance, it can be defined as the responsible factor.

Through the implementation of social media based marketing practices, it can help in creating

the lashing relationship between the customers and the company. Especially in the of SMEs, it
has been identified that social media based marketing approaches have become cost effective as

well as beneficial for the companies. As stated by Atanassova and Clark (2015), In the initial

stage, marketing investment was a challenge for the SMEs, due to the limited operational

budget.. However, after the introduction of social networks, the customer relationship

management has become quite smoother. By ensuring the customer engagement, this initiative

has made the relationship development process quite easier for the companies.

The larger customer segment has become easier to reach with the strong social media presence. It

is true that by determining the effective training to the employees, it can become easier for the

small and medium sized organizations to increase the customer awareness. On the other hand, it

is also true that the ini8tial understanding of thee companies regarding the social media

engagement can bring long term impact on business operations (Wang and Kim 2017). As stated

by Hudson and Thal (2013), Through the social networking, numerous opportunities can be

provided to the companies. It helps thee companies to give a solid reason to the customers for

getting involved into discussion products. By continuing this, it can be said that, through this

initiative, the market development activities can be done in wider range. This technique helps in

ensuring thee two-way conversation between the company and the customers, which indirectly

impacts on the customer satisfaction. On the other hand, this process has helped the Small and

Medium Sized enterprises to educate the customers regarding their products in the market.

2.3 SMEs innovation capacity and marketing process

Analyzing the knowledge management and learning process in SMEs it has been identified that

innovation management plays the key role in companies’ growth. Hajli (2014) stated that Based

on the trial and error p[process, the innovation is being introduced in the companies. Most of the

researcher believes that due to improper human resource, the capability of innovation absorbing
is quite low among the SMEs. However, most of the researcher have contradicted the statement

and stated that SMEs are the major source of innovation in the global market, however, due to

lack of opportunity to exposure, the companies don’t get popular in the market. Analyzing the

growth process in SMEs, it has been identified that based on the process of innovation,

organizational performance as well as local economic growth is being brought (Parida,

Westerberg and Frishammar 2012). It cannot be denied that day by day the increasing

contribution of SMEs on the GDP rate has clearly shown the ability of SMEs in the innovation

management. This quality among the SMEs has significantly help the companies to survive in

the competitive business environment with the large sized organizations.

As stated by Hudson and Thal (2013), in the emerging economy, business environment has

become highly competitive for the SMEs. In this situation analyzing the marketing performance

and innovation practices among the SMEs, it has been identified that in the 21 st century, the

innovation and marketing practices have got boost up in the SMEs. The transformational

practices all over the SMEs have impacted on the emerging economies in the growing sectors.

After the introduction of innovation positive impact on thee marketing process has been seen. In

order to develop the relationship between marketing and innovation, the strategic decisions

adopted by the companies have impacted on the profit generating process. On the others hand, it

is true that manipulating the business components, the innovation model adopted by the SMEs

has changed the direction of business. Influencing the firm performance, the innovation practices

have not only brought the profits but also it has impacted on developing the relationship between

managers and the employees. In order to maintain the continuous appreciation for innovation,

marketing performance of the SMEs is quite significant for the future benefits.
 1. Outcome

In the above section, various components related to the innovation process have been described.

The aim of the study has been developed on analyzing the impact of social networks on

promoting the innovation in SMEs. Analyzing the various research introduced by the

researchers, it has been identified that in most of the cases, the researchers have stated the

positive influence of social media in terms of promoting the innovation initiatives to the

customers. As stated by Atanassova and Clark (2015), analyzing the social media based business

development ways, it has been identified that competitive advantage, brand awareness, high

profits and brand promotions are being handled by the social networks, which have significantly

developed the customer relationship managements process. By continuing this, it can be said

that, like the large organizations, social media network is the cost effective platform for the

companies to reach the larger customer segment. In order to get more customer attention as well

as developing the unique competitive strategy, this particular platform has brought various

influences on the market.

On the other hand, Hajli (2014) stated that it is true that in order to break the market monopoly of

the large sized organizations, the social media networks can be defined as the internet based

strategic tool. Being the small sized organization, improper support of human resource and due

to lack of financial backup, it can be quite challenging for SMEs like for Ming Mie to sustain in

thee competitive business environment. However, with the effective use of social media

networks, the company can directly share the innovative ideas to the customers, which can help

the customers to get knowledge regarding the company services and products. On the other hand,

it is also true that being the innovative super market executive, through social media, for Ming

Mie can be able to drag the attention of larger section.

In order to ensure the global business operation, social media can be defined as the significant

platform where the company can collaborate with the suppliers, customers and business

associated. Understanding the emerging market trends, the needs of the customers can be easily

satisfied through this platform, which can indirectly bring impact on bringing the betterment in

sales revenue. Ensuring the wide spread of business account it can help in understanding the

position of competitors in the market. In the analysis, it has also been identified that by

expanding its business in the global market the company can properly generates the efficiency,

which may influence in gaining high brand popularity. Ensuring high social media existence, it

can be quite easier for the company to develop significant relationship with the investors,

customers, suppliers and partners. Collecting customer feedback, for Ming Mie can get the

chances to bring improvements in its operational process.

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