The Importance Of Cost Leadership Strategy

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Recommended: The concept of social media for business

2.5 Hypotheses development

The hypotheses development is associated with social media used in the business aspects of corporate strategy, environmental context and entrepreneurial competence.

2.5.1 Cost leadership and using social media
This research proposes that companies which emphasize cost leadership strategy are more motivated to apply social media use in business. Porter (1997) stated that if the company decides to choose a cost leadership strategy, it has to reach a lower cost of a product or a service than that of its competition, for which they tend to adopt the most advanced and efficient technologies used in business. Social media can achieve this objective. Schaupp and Belanger (2014) suggested that businesses are implementing …show more content…

Entrepreneurs use the service differentiation strategy to offer exceptional service better than other competitors, in order to obtain an improvement of customer satisfaction. Chenet et al. (2010) found that service quality had an impact on trust, differentiation and good relationship outcomes. Moreover, service differentiation has an important impact on a business in respect of service quality, trust and client commitment towards the firm. Social media can be used as a technology of business to deliver excellent service to customers. For example, social media, such as Twitter, is a channel where customers expect quick responses. As a result, businesses dedicate full-time employees to the service job of responding to customers and potential customers on Twitter. Fogg and Iizawa (2008) presented the argument that businesses use the Facebook service to persuade users to take quick action with comments. Importantly, Kandampully (2002) proposed that businesses interact with their customers and business partners using technology to provide services instantaneously across international borders. Based on the above discussion, the following hypotheses are …show more content…

These skills help entrepreneurs manage the IT systems effectively, to develop new innovations and increase the business potential. Bassellier, Reich, and Benbasat (2001) stated that the manager who has information technology competence and IT knowledge, they can use this skill to develop new IT opportunities and behave proactively in the business world. Importantly, Askool and Nakata (2011) suggested that an entrepreneur who has technology competence can adapt social media in their business. Therefore, the technology competences are very important skills for the business owners and managers to support social media applications in business activities.
Thus, these hypotheses are presented:
Hypothesis 11: Technology competence is positively associated with using social media in CRM.
Hypothesis 12: Technology competence is positively associated with using social media in Networking.

2.5.7 Using social media and cost

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