Ebusiness Strategy: Study of the urge for social media presence by SMEs

8/12/2019 Ebusiness Strategy: Study of the urge for social media presence by SMEs

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Shibin S Cherian

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E-BUSINESS STRATEGY

By Shibin S Cherian.

Submitted for the module E BUSINESS for the award for Masters in

Business Administration. Student ID: P134875


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E-BUSINESS STRATEGY

ByShibinSCherian.

EXECUTIVE SUMMARY:

In light to the requirement of this assessment, this report summarizes appropriate typologies and analysis

to evaluate the impact social media strategy on small to medium enterprises (SMEs) in the E Commerce

sector. Typically, this report demonstrates its objectives and further produces indicative contents that fulfill

the requirements vital to the assessment of this report. Primarily, this report focuses its scope on why

SMEs like Anoto (further elaborated in the body content of this report) are adapting social media presence

to maintain their competitive advantage, market sustainability, and development and implementationstrategies. Further comparisons of this objective will be demonstrated in reference to the small scale

development completed for His Nibs Pens during the academic year and other real -life organisations as

examples to support the validity of the objectives stated in this report.

OBJECTIVES:1. Evaluate the prime objectives that SMEs (like Anoto) consider to establish social media presence in

the digital media industry.

2. Identify and evaluate key technical requirements that underpin Ebusiness applications.3. Demonstrate the small scale development produced as per the requirement of this report and

establish prime understanding of developing social media strategy in order achieve competitive

advantage.

4. Recommendations following the reports objectives.5. Limitations during the progression of this report.


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CURRICULUM OF E- BUSINESS AND SOCIAL MEDIA STRATEGY INSMEs:Historically, there has been a broad debate on the difference between E commerce and E business

(Papazoglou & Ribbers, 2006; Chaffey, 2011; Laudon & Traver, 2012; McKay & Marshall, 2004). Simply put,

E Commerce is defined as the digitally mobilized viable transactions between organisations to

organisations and amongst individuals as well; and E Business relates primarily to enablement of

transactions internally or within a firm. E Business usually involves around the management of

information systems (Laudon & Traver, 2012). Recollecting its historical penetration into the market, E

Business majorly impacted the Banking, Travel and Tourism, Marketing, and retail sector and later it

expanded to several minor and major industries. Eventually, the rise of E Business had a prospective

impact on global economy developing a sense of fast cheap means to reach wider audience (Cao, Zhang, &

Seydel, 2005; Kotler, 2002). Recognized as a new frontier for global competitive advantage, organisations

must develop an understanding on how to tap into the vital components of E business marketing and

strategy in order to maintain global ECommerce sustainability. Adams (2004) concluded that Ebusiness

provides a substantial revolution by creating a predecisive typology for debauched management, data

handling, delivarance and communication of informations. However, E Business environment is adversaly

affeted by the amount of internet usage by customers. Observing Figure 1, it can be understood that the

amount of internet users are observably enormous. Deductively, the rate of internet users can be

understood to have increased further than the sourced data in figure 1. Beginning from the late 90s, E

Commerce was coined to be a Land Grab where the market positions were served on first come basis.

Therefore, the E Commerce presumably has significant competitors. Ghezzi, Rangone, & Balocco (2013)

further defines this

situation as the Lock in

effect or Information

Cascadaes. For instance,

Yahoo and MSN are two

competing web firms in

the Internet and E

commerce industry. The

rate of business expansion

for either firms is relative

to the information

cascade distributed; where adopters and users spread information about either firms to other users. With

information being momentous, the difference between progression and failure depends on the demand

Figure1: Internet Users Pie Chart data; Source:

(IWS, 2012)


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from the end users, thus implying the first mover advantage (Barnett & Feng, 2013). Eventually, when

executed with appropriate business models and E business strategy develops market leader position in

the Market.

In addition to this, the accelrating phenomenon of social media marketing have now penetrated a larger E-

Commerce sector reaching wider audience (Bryer, 2013). Chingning & Ping (2012), further demonstrates

that customers are more likely to accept suggestions from other customers they are aware of rather than

automated E commerce webpages. In support to this fact, Bryer (2013) concludes social netwrok a

competitve advantage for firms to expand their brand identity, reduced marketing cost, Substantial

consumer traffic, enhanced revenue and consumer relationship mangement (CRM). For instance, Smith,

(2013) analyses that Facebook has over 65 million active customers who are spontaneoulsy monetized

through target advertising revenues. Organisations today are striving to achieve mutually benefitial

business value through prospective CRM. Expanding CRM in SMEs are profoundly challenging. Harrigan,

Ramsey, & Ibbotson (2011) explains that specific deficiencies such as lack of resoruces, expertise and

financial budgets are few key essentials barricading SMEs growth stakes with Large corporate enterprises.

Historically, SMEs are observed to face constant turmoil as a result of the above mentioned contraints,

theoritically making the bargining power of buyers and suppliers at a significant level (Porter, 2008). This

further implies the urge for positive CRM for SMEs to maintain its market sustainbility. However,

responding to every single customer query can be time consuming and a slow process. The requirement of

a successful CRM for SMEs today have a tossed a pioneer in ex ploring cheapest alternatives to reach wider

audience, thus giving birth to social media strategy. Ucok (2014) demonstrates four key elements

underpinning the impact of social networking on e-business, especially for SMEs:

1. Advertising and Marketing: Social Media portrays an equally booming marketwhere organisations can tap on to a wider audience. Consumer campaigns

historically relied on clever marketing, however, presence pf social networks have

become a prevailing medium for instant and viral marketing strategies.

2. Increasing Revenue through Cost efficiency: Firms have more chance to be visibleand accessible to the market which collaterally benefits in faster launch of

products, enhanced customer relationships and experience, and expanding reach

to wider audience.

3. Enhancing Excellence in Employee and Customer Networking: Extensive CRM andglobal competitive sustainability are the key vitals to expanding global customer

and employee excellence. Networking and sharing of information are observed to


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have impact on organisations, allowing them to render strategic decision for

global sustainability (Ghezzi, Rangone, & Balocco, 2013).4. Corporate Transparency: It is highly essential for organisations to develop

transparency in their business in order to develop consumer loyalty and trust.

With increasing rate of information available online, stakeholders may now access

several data such as corporate social responsibility reports and financial reports

for awareness purposes.

With accelerated usage of internet and E commerce, Social networking have become a dominant

medium for Marketing and E business. However, with rising competitors in this field, the level of

transparency may also become imitable, making it conversely necessary for organisations to adopt various

EMarketing strategies to maintain their global competitive position for long term. Krishnamurthy & Singh

(2005) extends EMarketings seven vital features:

1. Personalization: Analyzing and Evaluating Consumer needs in accordance withnew market trends.

2. Privacy: Information shared must be guaranteed under Article II (201 -208) ofInternet Security and privacy act (NYS, 2013). Privacy plays a significant role in

maintaining a genuine transparency of trust for an organisation and by taking

measures in maintaining such confidentiality must be taken in a vigilant routine as

many legal aspects are associated with this aspect.

3. Enhanced Consumer Experience:With information shared with a network of wideraudience (Social Media), consumer reviews and service plays an extensive role in

E Marketing. Relatively, E Marketings primary scope lay on developing

relational viewpoints.

4. Community: Developing a community is a crucial role to be created whileimplementing an EMarketing strategy. A Community would generally consist of

a large group of audience thereby expanding the firms goodwill and loyalty

5. Digital Media:A presence in digital media must be considered while implementingan EMarketing Strategy. Digital technology creates 24/7 accessibility anywhere

creating consumer accessibility.


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6. Security: Mentioned previously, Privacy and security plays a significant role inmaintaining a genuine transparency of trust for an organisation and by taking

measures in maintaining such confidentiality must be taken in a vigilant routine as

many legal aspects are associated with this aspect.

7. Marketing Promotions:Marketing promotions further promote sales growth.

Scoping back to the objective of this report, this report will now focus on elaborating the comprehensive

literature mentioned above towards the indicative contents of Anoto1.

While considering its core business operations, Anoto focuses primarily on enhancing E CRM by

functioning through effective E Marketing (Anoto, 2013). Anoto seemingly established a monogamous

business operation but open to wide competition. Understanding the comprehensive scope of E

Commerce, E- business and Social Media strategy, Anoto has established a leading digital automation SME

with branches established in UK, Sweden, US, and Netherlands. Observing Anotos corporate website

(Anoto, 2013), Anoto preserves essential components to succeed efficient E Marketing. Pivotalizing

corporate transparency, Anoto exposes and shares its progression with wide audience by exposing their

shares, financials, corporate governance, management team, stakeholders and corporate social

responsibility reports. In comparison with the literature above, Anoto executes potential strategies to

establish social media presence in order maintain global sustainability.

KEY TECHNICAL REQUIREMENTS THAT UNDERPIN E BUSINESSAPPLICATIONS:Global economy races at momentus rate collataraly shifting the traditional balance between customer and

supplier. With large volume of computing technology, global trading regimes, and new medium of

communications emerging, bargaining power of buyers are observed to be strong, thereby making it

necessary for businesses to reach out wider audience via E Commerce and E business (Teece, 2010).

Neverthless, failure in implementing strategic business models; eg: ORKUT (Gunjan, Aditya, & Abin, 2011),

eventually detriotes market position and competition, thereby making it necessary for E business and E

commerce firms to implment funtional and strategic business models and applications. Discussed earleir,

the challenging and the only potential typology in informations sector is to earn revenue through provision

of information to the end users. Teece (2010) further observes that many ECommerce firms such as Ebay

and Amazon.com have adapted an simple taraditional business model observed first in newspapers sector,

1Swedish Company built on technologydata capture and automation of handwriting into digital media.


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where information is sold for free, however sold with advertisements to cover remaining costs plus provide

profit. This deduction makes it seemingly obvious to understand the breadth of E business and the

potential risks associated with it. Google observably potrays another intersting E- business model.

Developed around product/service innovation, Google follows freemium business model. Google develops

its own software and takes advantage of computing power. However, Googles revenue model is eclipsed

by advertisers. While noticably, previous search engines such as Alta Vista (Teece, 2010) arguably favored

the revenue model, Google in contradiction focused on maintaing the search experience and integrating it

with sponsor ads, diminishing pop ads and other advertisements interfearing the search experience.

Laudon & Traver (2012) elaborates 8 key elements that underpin E Business Applications. This report will

further relate its contents beneficial to the objectives of this report:

1. VALUE PROPOSITION: During the progression of this stage, organisations mustdeclare the clarity to why customers should consider them above their

competitors. Successful E- Commerce vlaue propositions implment substantial: Customization/ Personlization: Evaluating consumer demands and market

trends. Reduction of product search:Making it technically visible and diminishing

product search hapahazard.

Facilitation of transactions by product delivery:Procuring highly organisedE Business typologies to facilitate organised transactions by product

delivery.

Amazon.com can be viable example to exectue a typical B2C (Business to

Consumers) market relationship (Teece, 2010). Amazon offers unparalled

selection and convinince to its customers.

2. REVENUE MODELS: E Commerce and E Business firms primarly earn revenuefrom following models (Laudon & Traver, 2012):

Advertising Revenue Model: Primaly, social media networks recognisablyproduces content services and or products to end users in order to retain

increased number of users or niche customers.

Figure 2: Advertising Revenue

Model Example;


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Subscription Revenue Model: Effectiveness of the Subscription revenuemodel has to be designed and implemented in accordance with new CRM

trends. A firm can charge subscription for usage of either all or some of its

contents and features.

Transaction fee Revenue model: Firms may show leverage for certainamounts of financial transaction that takes through its website.

Sales Revenue Models: the firm directly sells products and services tocustomer.

Figure 3: Subscription Revenue

Model Example;

Figure 4: Transaction fee Revenue

Model Example;

Figure 5:

Transaction fee

Revenue Model

Example;

Source:

Amazon.co.uk


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Affiliate Revenue Model: Organisations may pass revenue affiliation throughthird party websites for a referral fee (See figure 6. Below).

3. MARKET OPPORTUNITY: Organisations must determine at what marketplace theyintend to serve and what is its potential size.

4. OMPETITORS ENVIRONMENT: Potential competitors and emerging competitionlevel to face while penetrating the market. In this particular segment,

organisations create potential analysis on competitors price observations in

order to create competitive power in the market.

5. COMPETITIVE ADVANTAGE: Potential strategies on how an organisation can bedifferentiated. Laudon & Traver (2012) further expands four sub concepts to brief

an understanding on different kinds of competitve advantage:

Asymmetries-afirmpossesscompetitivepowerinthemarket. First mover advantage firms creates consumer loyaltybefore potential

competitorscouldenterintothemarket.Eg:Amazon.com(Hawk,Pacheco

-De-Almeida,&Yeung,2013)

nfair competitive advantageUniquecompetitiveadvantageoverbrandsuchasbrandnameCoke.

LeverageFirmsdecidetoutilizetheircompetitiveadvantageandpowertopenetrateintonewmarkets.

6. MARKETING STRATEGY: Firms decide on how to promote their services to targetwide audiences.

7. ORGANISATIONAL DEVELOPMENT: Firm decides on the internal managementstructure that are deemed necessary to exist. Typically, the firm will be divided

Figure 6: Affiliate Revenue Mod

Example;


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several operational departments and other hierarchical restructuring to execute

appropriate business development.

8. MANAGEMENT TEAM: Firm decides their management team. Generally anindividual with substantial experience in the required position.

Anoto currently operates in a monogamous industry but with potential competitors who have severe

competitive advantage than Anoto does. While Anoto solely scope on production of handwriting digital

automation, competitors like

HP have already penetrated

several other market

segments (HP, 2014). Chaffey

(2011) further extents the

market relationship according

to the demonstrated figure

given below. Considering this,

Anoto operates on business to

business (B2B) scale by

providing technological

assistance, database

oirnetation and handwriting automation to other businesses. Therefore the necessity for revenue models

can be considered low here. However, Anotos value propositions clearly produces corporate transparency

allowing Anoto to increase its brand awareness thorugh social media groups and networkings. However,

repeating again, Anoto must strategise its objectives in order to gain competitive advantage.

SMALL SCALE DEVELOPMENT:HISNIBSPENS1.COM REFER ANNEXURE1):http://hisnibspens1.moonfruit.com/

As per the requirement of this report, the following section will summarize and refer with the data

deducted above.

HisNibsPens1.moonfruit.com (originally Owned by Norman Hasse under HisNibs.com) is a small scale

development made through the academic year of 2013 2014. It is to be noted that the webpage

developed for hisnibspens1.moonfruit.com is only to demonstrate appropriate E business

Figure 7: E- commerce market relationship matrix.

Source: (Chaffey (2011)
http://hisnibspens1.moonfruit.com/http://hisnibspens1.moonfruit.com/


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implementation designs and does not authorize a corporate webpage owned by Norman Hasse for

Hisnibs.com.http://hisnibspens1.moonfruit.com was developed using an open source web development

online platform named moonfruit.com. HisNibsPens1.Moonfruit.com was completed in 09 Feb 2014.

The prime purpose of this is to generate primary data on the functioning of a B2C (Chaffey, 2011) E

Commerce operation. Hisnibspens1.com developed is basically a B2C business where the organisation

serves directly to the consumer. Therefore, Revenue models will certainly play an important role in here.

HisNibsPens.coms value proposition model is designed to integrate utmost consumer experience and

customer support. However HisNibsPens1.com have penetrated into a highly competitive market.

Competitive advantage for HisNibsPens1.com can be considered low as the market industry for writing

supplies and accessories is observably large. However, HisNibsPens1.com being a small online enterprise,

the marketing strategy pretty much relies on social media presence. As deducted earlier, social media

strategies reduced marketing costs allowing organisations to focus on other monetary concerns.

CONCLUSION:Hexagon relation can be observed in E Commerce sector. The Prime objectives of this report were

deduced and concluded in a deductive approach with agreements being weighed on the potential sides.

Social media presence for SMEs were concluded to deemprofitable benefits. The report also briefed on

SME Anoto as per the requirement of this report in order to clarify the E Commerce functioning.

Recognized as a new frontier for global competitive advantage, organisations must develop an

understanding on how to tap into the vital components of E business marketing and strategy in order to

maintain global E Commerce sustainability. The rate of business expansion for either firms is relative to

the information cascade distributed. Global economy races at momentus rate collataraly shifting the

traditional balance between customer and supplier. With large volume of computing technology, global

trading regimes, and new medium of communications emerging, bargaining power of buyers are observed

to be strong, thereby making it necessary for businesses to reach out wider audience via E Commerce

and E business. SMEs like Anoto and HisNibsPens.com must urgenty consider potential elements that

underpin Ebusiness applications and market sustainability.

RECOMMENDATIONS:1. SMEs like Anoto and HisNibsPens1.com must identify most appropriate social

media tool that best suits the organisations prime business objectives. Extensive

market research on existing social media tools must be carried out. Queries
http://hisnibspens1.moonfruit.com/http://hisnibspens1.moonfruit.com/


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related to consumer views feedbacks and recommendations will help

organisations to map its consumer power at several segments of the market.

2. SMEs like Anoto and HisNibsPens1.com must methodize social media strategiesand revenue models in order to substantiate reverse profit. Further typologies

can be explored in order to discover potential strategies to establish social media

presence.

3. Organisations must specify on their corporate transparency as E Commercedeals with potential risk of faradism and cybercrime. In order to attract wider

audience, organisations must become transparent to the market.

4. SMEs must consider potential elements that underpin E business applicationspresented in the report in order to maintain global competitive position in the E

Commerce sector.

LIMITATIONS:Resource database allocated for this report, Moodle (Supportive Dashboard for Students to use online

resources) constantly faced disturbance, disrupting collection of further statistical data to validate the

conclusions of this report.


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Ebusiness Strategy: Study of the urge for social media presence by SMEs