The Economic and Business Prospects of Virtual Social Networks (Essay Sample)

THE ECONOMIC AND BUSINESS PROSPECTS OF VIRTUAL SOCIAL NETWORKS
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The Economic and Business Prospects of Virtual Social Networks
Virtual social networks are social structures consisting of individuals who regularly interact through a particular form of social media, usually surpassing political and geographical boundaries (Lee 2014, p.1). The online social networks have revolutionized the way people communicate, interact and do business. There are various forms of virtual social networks, such as social networking sites (Facebook), content communities (YouTube), blogs and microblogs (Twitter), virtual social worlds (Second life), collaborative projects (Wikipedia), and virtual game worlds (World of Warcraft). Social networking sites have been growing consistently with users of the existing networks increase, and more virtual networks are created. Currently, there are 2.27 billion Facebook users, 1.9 billion viewers on YouTube, 1.5 billion WhatsApp users, 1 billion Instagram users, and 1.08 billion WeChat users. In 2018, there were 243.6 million users of social networks in the United States, while 209.6 million shopped online (McDonald 2019, p.2).
The virtual social networks have become increasingly important in business, and many business enterprises today have integrated social media into their business processes. Social media has changed communication between individuals and organizations (Qaualman 2009, p.6). They present businesses with a set of tools to attract and maintain customers, as well as generate new business. They also help in creating business opportunities, understand the behavior of consumers, and market positioning. The central idea of virtual social networks being “sharing,” users generate content which includes articles, conversations, images, and videos that can be applied to any product or service. However, the resource and capability-based perspective argues that the business performance of a firm depends on its effectiveness of using resources (such as assets, processes, and knowledge) to gain a competitive advantage (Paniagua & Bolufer 2014, p.28). Therefore, managers need to have a clear understanding of the impact of social marketing channels on business performance. They have to understand how the utilization of social media resources such as sharing, relationships, conversations, and groups translates into financial (sales and profitability growth), operational (market positioning, customer satisfaction, share position, and operational efficiency), and corporate social (relationship with customers and society) performance.
The most significant opportunity offered by social networks is social media marketing. Organizations