THE IMPACT OF INTERNET AND SOCIAL MEDIA IN STARTING UP BUSINESSES: CASE STUDY OF UK EDUCATION CONSULTANTS LIMITED.
Abstract
Internet technology has revolutionized the business operations in the current business world. Small businesses are currently targeting global customers through the internet and social media. Social media is the most used way of communication among individuals globally. Start-ups face severe competition from well established companies hence must come up with ways of surviving in the market. The aim of the extant study is to examine the impacts of the internet and social media on starting up businesses, targeting customers, and expanding in the market. The study employed both exploratory and descriptive design and interpretive paradigm. A mixed method research will be adopted whereby both qualitative and quantitative data will be gathered and analyzed.
Table of Contents
1.0 INTRODUCTION 4
1.1 Problem Statement 4
1.2 Research Aim, Objective, and Questions 5
2.0 A BRIEF LITERATURE REVIEW 6
3.0 OUTLINE OF RESEARCH DESIGN AND METHODS 9
3.1 Research Design and Philosophy 9
3.2 Research Strategy and Data Collection and Analysis Methods 10
Conclusion 10
LIST OF REFERENCES 12
1.0 INTRODUCTION
The main purpose of this research is to examine the impact of internet and social media in starting up businesses targeting customers and expanding in the market. The intended output of the study is to guide on how internet and social media can be used in starting up businesses and expanding in the market. The introduction chapter discusses the problem statement, research questions and objectives, and motivation for the study.
1.1 Problem Statement
Globalization has increased market competition making it very challenging for new start-ups especially with regards to attracting customers and expanding in the market. Starting up a business in the United Kingdom may be very challenging due to increased competition from both the local and international operators. According to a report by the World Bank and International Communications Union, there are over 2.5 billion internet uses globally (Henning-Thurau, Malthouse, Friege, Gensler, Lobschat, Rangaswamy & Skiera 2010, p. 312). The number of internet users worldwide has increased almost seven fold since year 2000. This is mainly contributed to technological advancement and influx of Smartphone’s in the market. A report by the Central Intelligence Agency (2014) indicates that, there are over 8.1 million internet users in the United Kingdom. Despite the large number of internet users in the market, new entrepreneurs do not know how to tap that opportunity to start businesses and expand them in the market.
According to Mandal (2011, p. 4), despite that customers get most of the information they require from the internet; new entrepreneurs do not know how to present this information in a way that attracts customers. Social media for instance, is mainly used for socialization and businesses can take this as an opportunity to communicate and promote their products to customers. Several studies have focused on the role of internet and social media as a marketing strategy for businesses. However, how this new technological development can be used in starting new businesses and expanding in the market has received limited focus from previous studies. Many start-ups fail because of poor marketing and promotional strategies. Thus, this study aims at filling the research gap left by the previous studies by examining the impact of internet and social media in starting up businesses with a focus on UK Education Consultants Limited (UKEC) based in Manchester. It is therefore important to understand consumers’ purchasing perceptions towards internet and social media.
UK Education Consultants assists international students to apply to universities in the UK. Also UKEC provides a variety of training courses and business solutions to suite a wide range of organisational and people management needs (UKEC, 2014). Most of UKEC students come from the Gulf Region and the Middle East in particular. UKEC provides consulting services for students who like to study Foundation, Undergraduate, Postgraduate degrees, doctorates in UK.
1.2 Research Aim, Objective, and Questions
The aim of the study is to explore how internet and social media can help entrepreneurs in starting new businesses and expanding them by attracting a large customer base with a focus on UK Education Consultants Limited. The study objectives include;
a) To examine the impacts of internet and social media on starting up businesses.
b) To examine the customer purchasing perceptions and attitudes towards internet and social media
c) To establish how internet and social media can be effectively used in expanding start-ups in the market.
The main research question is how does the internet and social media influence UK Education Consultants Limited starting up a business in the market. The study seeks to answer the following research questions:
a) What are the benefits and challenges of the internet and social media in starting up businesses?
b) What are the customer purchasing perceptions and attitudes towards internet and social media?
c) How can new entrepreneurs use the internet and social media to target customers and expand their businesses in the market?
2.0 A BRIEF LITERATURE REVIEW
This literature review locates and critique relevant ideas, models, and theories relating to the research topic and problem, “what is the impact of internet and social media in starting up businesses? And identify themes, ideas, and concepts arising from the research problem and put them together to constitute a theoretical framework. Hatch and Schultz (2010, p. 595) define internet as an international system of interconnected computer networks that use standard protocol to link various devices globally. Internet has improved the manner in which people and businesses interact in and out of the geographical boundaries (Hoffman & Fodor 2010, p. 43). This is because internet opens a huge amount of information and enables people to share opinions, information, passions and beliefs. Through internet, business people are able to directly communicate to customers, employees, suppliers, and other shareholders at low cost and within a short period of time.
Social media is a new technological development that has significantly changed the way businesses are conducted. Holger, Hoyer, Krafft and Krieger (2010, p. 25) define social media as a group of applications based on internet and which build on the technological and ideological foundations of web 2.0 allowing creation and sharing of user generated content (UGC). Social networks such as Facebook, Youtube, Twitter, and MySpace among others are widely used by individuals and businesses to share information. Social media is regarded by Hoyer, Chandy, Dorotic, Krafft and Singh (2010, p. 285) as the current fastest and widely used mode of communication by individuals and businesses. The concept of sharing and education customers forms the basis of usage of social media in businesses.
As indicated in the problem statement part, despite the improved technology represented by internet and social media, companies are still lagging behind in adoption of this technology. This is mainly because of lack of capabilities, knowledge, who to post, and privacy concerns. Starting a new business requires creating awareness among the customers about the business, its offerings, benefits, and why they should visit the business in the market. This can be made easy through the use of internet and social media technology. However, the existing companies are sceptical on the use of social media in communicating and promoting their products and brands. According to a study by the Internet Advertising Bureau (IAB) conducted in 2010 (Kimberley 2010), only 22% of the surveyed marketers indicated that social media forms a major part of their promotional strategies. However, several marketers were not sure about the role played by internet and social media in their company’s plans. The major challenge of use of internet and social media in promoting brands, products and services in the market is because it is not easy to measure returns on investments. Prasad (2010, p. 15) and Keane (2010) in separate studies indicated that, new start-ups fail before they take off because of lack of skills and knowledge in promoting and communicating them. The internet and social media have the capacity of maintaining a start-up and expanding it in the market but when not effectively implemented it can result in the failure of the business (Smith & Kidder 2010, p. 493).
A study by Kärkkäinen, Jussila and Väisänen (2010, p. 230) revealed that social media and internet are ineffective in start-ups because of the challenges involved in these promotional strategies. The authors argue that, social media can be used by rivals and/or disgruntled customers to tarnish the name of the new business leading to its failure. This notion was supported by Jack, Moult, Anderson and Dodd (2010, p. 316) who stated that if new entrepreneurs do not have skills on how to phrase messages and information communicated online, they cannot survive with the internet and social media. Due to the wide usage of social media, it can promote or tarnish the name of a business and this effect is widely received. However, Gordon and Jack (2010, p. 520) and Donsbach (2011, p. 7) have contrasting views where they argue that the internet and social media are the best promotional strategies for start-ups and business expansion because they target a large customer base and information is effectively spread within a small period of time. This was supported by a survey by the Internet Advertising Bureau that a third of the marketers surveyed indicated that they were planning to plough 6% to 20% of their budgets in online marketing into social media in the year 2009 (Kimberley 2010). This can be interpreted to mean that social media has become more beneficial than other forms of digital marketing.
However, in a close contrast, Ellis, R. (2010, p. 5), Steinfield and Lampe (2011, p. 57), Cheung and Lee (2010, p. 25), and Anderson, Dodd and Jack (2010, p. 124) argued that, social media is not effective for start-ups because it reveals the secrets and strategies of the new business to the existing businesses hence creating a ground for its own competition. This is because information given through social media is not controlled and can be assessed by anybody within the network. The aspect of customer purchasing perception towards the internet and social media should not be ruled out when discussing the impacts of social media on businesses (Franke and Schreier (2010, p. 1022). The current lifestyles make it easy for businesses to target customers through the internet and social media especially the young generation than conventional marketing strategies. Technological advancement experienced in the recent times has turned everything viral. Customers’ lifestyles in developed and emerging economies allow them to use internet in shopping (Darban & Li 2012, p. 12; Sinclaire & Vogus 2011, p. 295; and Solomon, Bamossy, Askegaard & Hogg 2010, p. 38).
Thus, the study will test the following hypothesis;
H1: Internet and social media positively impact starting up businesses and expanding
H2: Internet and social media negatively impact starting up businesses and expanding
3.0 OUTLINE OF RESEARCH DESIGN AND METHODS
3.1 Research Design and Philosophy
Exploratory and descriptive research designs will be employed in the extant study. Exploratory design will bring new ideas and information which have not been explored in the concept of impacts of internet and social media on businesses. Descriptive design will add to the existing ideas and information on the research problem (Walliman 2010, p. 32). The rationale of using both types of designs is to comprehensively answer the research questions. Interpretive philosophy will be employed in the study. This philosophy interprets phenomenon and variables from the researcher’s perspective (Chilisa 2011, p. 22 and Crowther & Lancaster 2012, p. 36). The researcher’s subjectivity applies in this philosophy. The study aims at understanding the impacts of internet and social media on starting up businesses through interpreting variables. However, positivism philosophy was not used because tested the hypotheses, the main premise was to interpret the relationship between the two variables.
3.2 Research Strategy and Data Collection and Analysis Methods
A mixed method research will be used in the extant study. The study targets both qualitative and quantitative data. Thus, mixed method strategy will be used because it includes both qualitative and quantitative data (Ghanuri & Gronhaug 2010, p. 37). Qualitative data will be gathered through interviewing UK Education Consultants Limited managing director and employees. Quantitative strategy using questionnaires helps in indicating the statistical relationship between the dependent and independent variables. This method will be used to study the demography of the respondents and measure the impacts of internet and social media on start-ups statistically. Surveyed on the impacts of the internet and social media on starting businesses, targeting UK Education Consultants Limited customers.
3.3 Study Limitations and Ethical Considerations
The study focused only on the impact of internet and social media on start-ups. This is a limitation because internet and social media affects not only the start-ups but also established companies. The study focused only on start-ups in the UK while internet and social media is a global aspect and its impacts may be influenced by culture hence generalization cannot be done.
Conclusion
Internet and social media play a critical role in start-ups especially in developed and emerging countries where technology is a culture. The extant study aims at exploring how internet and social media can help entrepreneurs in starting new businesses and expanding them by attracting a large customer base with a focus on UK Education Consultants Limited. In doing this descriptive and exploratory research designs will be employed. The study will use a mixed method research where both qualitative and quantitative data will be collected and analyzed. Conclusions and recommendations will be made based on the data gathered and analysis made.
Time Frame
The timeframe for the research will be approximately 60 days
Task Weeks
1st 2nd 3rd 4th 5th 6th 7th 8th
Establish Research Objectives
Read literature
Draft literature review
Devise research approach
Submit to the supervisor
Organize survey
Develop survey questions
Submit to the supervisor
Conduct survey
Evaluate data
Draft findings
Complete remaining chapters
Submit to supervisor and wait for feedback
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