Impact And Role Of Social Media In XYZ Company Essay


Discuss about the advantage and disadvantage in using social media for increment of business in XYZ Company.



In past decade, the role of social media as a business tool has increased in organisations; many corporations efficiently use social media strategy to increase customer engagement and gain a competitive advantage. The growing rate of social media users provides a substantial platform to modern companies to expand their business operations by using this strategy. Social media is a platform for online websites which are designed to allow its users to share their content with others and communicate with them in real time. Modern organisations implement social media strategy into their business model to expand their operations. There are various benefits of using social media in business through which a corporation can expand its business such as customer engagement, communication with a wider audience, instant feedback, two-way communication, market research and many others. Modern corporations also face various challenges whiling using social media in business such as cyber-attacks, hidden costs, time-consuming, insider threat and many others. This report will take the example of “Manhattan Mocha”, which is a small caf? situated in New York City, to understand the various shortcomings and benefits of using social networks in business. Further, the report will review various literature to understand the role of social media in the expansion of business, from the perspective of “Manhattan Mocha”.

Project Objective

The main goal of the report is to evaluate various challenges and rewards related to the use of social media in business from the perspective of ‘Manhattan Mocha’. Various benefits and drawbacks of social media will be discussed in the report by examining various literature. The secondary goal is to understand how social media strategy can assist in increment of business from the example of ‘Manhattan Mocha’.

Project Scope

The report has a wider scope since it will discuss the impact and role of social media in increasing a corporation’s growth. To understand the topic, examples of various companies will be discussed which gained a competitive advantage through social media strategy. The report will discuss views and ideas of experts to understand the topic clearly.

Literature Review

According to Mangold and Faulds (2009), social media is referred as online platforms which are accessible through the internet, and they are designed to provide various services to its users such as instant communication, content sharing, worldwide reach and many others. The number of active social media sites users has grown more than three billion which provide a large and global platform to companies. Social media sites are operated worldwide, and they assist in resolving various trading barriers by creating efficient and faster communication channels between international corporations. As per Kaplan and Haenlein (2010), the growth rate of social media users makes it an obvious choice for marketing; the availability of two-way communication allows corporations to use social media sites as a tool for customer engagement. The use of social media has increased with the growing number of smartphones; in 2017, there are more than 2.4 billion smartphones available in the markets which allow users to easily connect to their preferred social media sites (Murphy, 2017).

Social media has become a part of modern corporations’ business models, and they use these websites to perform various operations which expand their business. For example, companies can create their profile on social media sites and directly interact with customers to hear their opinions and make appropriate changes in their products. Facebook is the largest social media site based on the number of active monthly users; the site has more than 2.07 billion active monthly users (Figure 2). The trend of using of social media sites for business purposes is growing popular among small and medium enterprises as well because many large organisations have gained a competitive advantage by using this strategy (Fiegerman, 2017). Manhattan Mocha is a small caf? situated in Manhattan, New York; the company was founded in 2015, and it has gained popularity since then and opened more than 15 stores in different areas of United States.

The company wants to expand its business further in the United States and other countries as well. The caf? offers high price drinks to its customers that are created by high-quality ingredients and ethical operations; the customers pay a high price because like the taste of the drinks and more importantly they prefer that firm uses environment-friendly operations and ethical processes to make their drinks. The corporation has a cult following which prefers their products over other competitors such as Costa Coffee and Starbucks. The company can increment their operations and expand their business by implementing an effective social media strategy. Following are various challenges and rewards that Manhattan Mocha face when using social media sites into their operations, and they can base their plan on these factors in order to expand it globally.

Benefits of Social Media

An Effective Tool for Marketing

Tuten and Solomon (2017) provided that social media is an online platform which is designed to allow its users to share and communicate with others; it is a great tool for marketing since it allows corporations to interact with their global audience. There are more than 3 billion people who use social media sites, and companies can market their products directly to them (Williams, 2017). The corporations which use social media for marketing have the option to target their specific customer demographic, and this option is not available in the traditional method of advertisement. For example, companies which make products for teenagers can advertise directly to the online teenage audience. Social media marketing is different from traditional methods of marketing because it provides a two-way communication channel through which customers can provide their feedback on advertisements in real time. As per Saravanakumar and SuganthaLakshmi (2012), the customers have the ability to provide their feedback and opinion on the advertisement of a corporation. On the social media websites, companies can create their account, and interested individuals follow them to learn about new business updates and news.

Packer (2011) stated that the social media sites collect personal data of its users and corporations can also collect such data to learn about what their customers are interested in or what their requirements are. The companies can use such information to improve the effectiveness of the marketing campaign to ensure that they are marketing their products to a specific audience which are interested in their products or services. For example, Netflix understands its audience and their preferences; therefore, they use pop culture references along with movie references to target the attention of their audience. The audience gets intrigued by the advertisement and click on it which increase the brand awareness of the company (Williams, 2017). The trust of people in online marketing is more than compared to traditional sources which make it a potential method of marketing (Nielsen, 2012) (Figure 1).

In case of Manhattan Mocha, the company can use their environment-friendly image to improve the efficiency of their social media marketing. The corporation already has profiles on popular social media sites such as Facebook, Twitter, and Instagram; they should increase their online interaction with customers and use social media sites to market locally. The cost of social media marketing is lower than compared to traditional marketing sources, and Manhattan Mocha can take advantage of this opportunity. The company already has a cult following on social media who are genuinely interested in corporation’s products and the firm can directly market their products to them without paying any marketing charges which increase brand awareness. The company can also market its products to a global audience through social media sites which will assist in expanding its business.

Customer Insights and Market Research

As per Verhoef, Reinartz, and Krafft (2010), social media sites work through users’ personal data, and these websites analyse the data of their users to provide the appropriate recommendations. Based on the likes, comments, and shares of the users, social media sites can evaluate the preference of its users. Similarly, organisations can also use social media website to collect valuable customers’ insights which can assist them in creating new services or products as per consumers’ demands. For effective market research, social media sites are a great source since it is easier to collect worldwide data without paying high costs (Aral, Dellarocas, and Godes, 2013).

Manhattan Mocha can also use social media sites to learn about their customers’ favorite drinks and collect their feedback about their facilities and products which assist them changing their existing setup and satisfying their customers’ requirements. The company can take advantage of social media sites features such as polls which allow users to vote on a question easily; the firm can use this feature to understand its customers’ preferences and improve the quality of their existing products to meet the demand of consumers because it will assist in the expansion of the business.

Communication Channel

According to Wang, Yu, and Wei (2012), social media sites are designed to allow its users to instantly communicate with others and share content through the online channels; the sites provide services such as instant messaging, collaborations and file sharing. Similarly, modern corporations can use these platforms to improve the efficiency of their business communication with various entities such as customers, employees, and other companies. Effective communication assists in improving a firm’s efficiency which leads to new business opportunities. Social media is a great platform for corporations to interact with their audience since it provides a global platform which is cheaper and easier than compared to traditional methods such as telephones, letter or others. The customers can easily follow or unfollow the brand that they like, and they can provide their opinions about the products and services of a company.

Stieglitz and Dang-Xuan (2013) stated that a corporation can ask for the opinion of its customers can they can write their views on social media accounts of the firm, and such information assist the enterprise in creating new and better products and services. The corporations can also use social media sites to communicate with employees and other companies which improve the efficiency of the workplace and create new business opportunities. Many enterprises use desktop or mobile applications of social media sites such as Facebook messenger or Google Hangouts to communicate with their customers; these applications provide services such as project collaboration, instant response and file sharing which improve the productivity of works.

As per Castronovo and Huang (2012), social networking open new business opportunities for corporations; many firms use the online platforms to interact with other enterprises which assist in expanding both organisations’ business. Manhattan Mocha should improve their customer engagement by establishing a social media team that interact and solve quarries of the online audience. The company can also use social media sites to improve the communication between different employees which work in different stores. The corporation can also increase social networking with other caf?s situated in different locations and collaborate with them to expand their business.

Customer Experience

The popularity of social media sites is rising because people like to socialise with other individuals who have similar interest or taste. Heller Baird and Parasnis (2011) mentioned that modern corporations use social media sites to improve the experience of their customers by interacting with them and resolving their quarries. The consumers have the ability to share their feedback and quarries over social media profile of corporations. The firms provide a quick reply to its customers in order to resolve their issues. Manhattan Mocha can also improve their consumers’ experience by resolving their customers’ quarries and provide them information about their products. Many studies have provided that effective customers’ engagement assists in the expansion of business since it creates brand loyalty.

Drawbacks of Social Media

Vulnerability to Cyberattacks

People and corporations require an internet connection to access their social media profiles; they are based on online platforms through which individuals across the world can easily connect to them. As per Goolsby, Shanley, and Lovell (2013), the dependability on internet and servers increases the vulnerability of social media sites against cyber-attacks; many cybercriminals hack the social media accounts of corporations and individuals to collect their sensitive data and gain an unfair advantage. Chandramouli (2011) provided that many organisations have suffered from cyber-attacks and the number is growing along with the popularity of social media sites. For example, the data of Yahoo was breached by cyber criminals that adversely affected the firm and more than 3 billion individuals (Haselton, 2017).

The hackers collect sensitive data from corporations from their social media accounts and use them to gain an unfair advantage. The corporations which use social media have to invest in cybersecurity software and application which increases their expenses. Similarly, Manhattan Mocha is also vulnerable to cyber-attacks, and they have to secure their online data and servers as well. The corporation should invest in cyber security applications and software such as firewalls and antiviruses to reduce the risk of cyber threat. Therefore, the use of social media sites includes various hidden expenses which corporations have to invest in order to improve their online security. The risk of cyber-attacks reduces the chance of corporation to expand its business because hackers might collect the data of the company and hurt their position financially and socially.

Time Consuming Process

According to Zeng et al. (2010), social media sites are interactive platforms which provide the facility of two-way communication; the corporations have to deal with a large number of followers and their quarries and responding to each message takes a significant amount of time. Effective engagement with customers and maintaining long-term relationship require the company to invest time with engaging with customers. The customer engagement program takes a significant amount of time and corporations have to hire employees who communicate with consumers for 24*7, and it increases their cost. Manhattan Mocha also has to hire employees in order to provide 24*7 customer engagement service which increases its operations costs.

Inside Risk

Gritzalis et al. (2014) provide that while using social media sites and online websites, insider risk is one of the primary reasons which increase a corporation’s vulnerability towards cyber-attacks. According to IBM’s study, more than 60 percent of the cyber-attacks are caused due to inside jobs which require corporations to invest on physical protection of their servers (IBM, 2017) (Figure 3). Manhattan Mocha has to ensure that its computer hardware and servers are protected from third party access in order to reduce their vulnerability against cyber-attacks. The high risk of insider threat reduces the chance of Manhattan Mocha to expand its business since it has to invest in physically secure their computer system.

Negative Feedback

Internet is an open platform and users can post anything they want; many people use these platforms to post negative comments about other individuals or corporations. Pfeffer, Zorbach, and Carley (2014) provided that the rate of online harassment and cyberbullying are continuously growing along with social media users. Manhattan Mocha also face similar issues since any angry customer or competitor can post negative comments about the company’s products and services which result in reduction of corporation’s sales. The firm also has to ensure that its customers did not post anything negative on their profile which can reduce the business of corporation and create barriers to its expansion.


Conclusively, social media site provide online platforms to corporations which they can utilise to expand their business at a global level. The users of social media sites are growing rapidly which makes them a potential target for companies in order to market their products and services. A corporation can have various benefits for using social media sites through which it can expand its business, such as marketing to larger audience, improved customer experience, effective communication channel, and source of market research. The companies face various challenges while using social media sites which adversely affect their business operations such as insider risks, vulnerability to online attacks, highly time-consuming process and risk of negative feedbacks. Manhattan Mocha should assess these risks before implementing a social media strategy to ensure that they have enough resources to address such issues. The company has an opportunity to expand its business and gain a competitive advantage by implementing an effective social media strategy


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