Risks Facing Global Social Media Firms

Risks related to global social media firms

Nowadays, there are many social media firms such as Instagram, Twitter and Facebook that are growing rapidly. These companies are getting a lot of opportunities for enhancing their performance. The demand for social media for business purposes is increasing day by day. There are a lot of companies which are using social media platforms for promoting their different kinds of services and products (Tian and Leon, 2016). Moreover, it can be stated that all these social media firms are getting a lot of revenue from different regions of the world. The users are increasing day by day, and people are being addicted to social media. They keep sharing their views about new places and products which helps other people to get information about that. Moreover, there are some regulations published by the government of different countries which are affecting the business of these reputed social media firms. Therefore, the higher authority of these companies needs to strictly maintain the government policies for doing business in that country.

Government regulations

There is a lot of news published by users on social media which can affect the government's reputation. Moreover, these social media needs to check the contents published by the users, and if there is any false data published, then they must delete that. Moreover, the management team of social media companies needs to check the authenticity of the news published by the users. In addition to that, any kind of controversial data must not be leaked in these social media platforms. For example, there are many pirated movies and videos published by some users of Facebook and Instagram (Milosevic, 2016). As soon as the authority got that information, they deleted that video from their social server. So, it can be analysed that the partners of social media and the higher authority do not support piracy, and they do not allow these things to happen on their websites. In addition to this, “Data protection act” and regulations are well maintained by these social media firms.

Sometimes, it becomes significantly hard for them to analyse each of the content thoroughly before it became viral. In that case, the government can assume that social media platform and may legal charges on the company. As the number of users is increasing day by day; therefore, it becomes really hard for the users to check all the minute details (Mergel, 2016). Apart from these, cyber crimes are increasing in different countries which is another issue of these social media platforms. Many criminals are using these platforms for gathering information about their target, and they are doing different kinds of criminal activities. So, the management team of these companies changes the settings of their applications. They strictly followed all the regulations for reducing any kind of risks associated with the business. The softwares are updated by the IT professionals, which includes different kinds of features where people can protect their data from being leaked. There are many political impacts on social media which can affect the reputation of these companies.

Possible impacts

Moreover, the impact of the government is high on the business functions of these companies. These companies need to maintain all the laws produced by the government. In addition to this, international laws and regulation of business need to be maintained by the members associated with this business (Napoli, 2019). The company needs to thoroughly observe what type of news is getting shared by users of social media applications. If they are authentic, then the founders do not have to deal with risk, but any kind of fake news must hamper the reputation of the firms.

If the hierarchy of the organisation properly maintains every rule and regulation of the government of the country, then it will be easy to expand the business in that region. It is essential to get government support for expanding the business and attract all the citizens of the country. Government helps to support the business and increase the reputation of the company. So government taxes need to be paid on time by the hierarchy of the company. Moreover, all these companies are expanding rapidly, and the user number is also growing (Andorfer, 2017). So it can be stated that IT companies properly followed government regulations then it could be easy for them to enhance the services. In addition to this, any kind of terrorism violence child abuse for cyberbullying issues must not be created by using social media platform. So the users also need to maintain some rules and regulations for releasing a good transparency report. The government of different countries properly check the statistics provided in the report, which allows these companies to continue the business in that area.

Effect of emerging economics in business

Emerging economy helps to increase the financial structure of any business, and it allows the company to start new projects. Business Innovation can be done by getting an acquirable amount of revenue from the target market. So the economic structure of the country needs to be analysed properly for increasing the profitability of the company. Emerging markets help to expand the business by getting FDI (Fernández et al. 2018). it helps different countries to compete with each other and globally establish the business. Moreover, BRICs countries play an essential part in this overall process. All the multinational companies are getting high amounts of investment from these countries, which helps to enhance the business in different geographical areas. For example, Apple is a well known MNC which is increasing its business in both of the developing and developed countries. This company is getting a high amount of FDI from other countries, which helps to initiate the business in the rural areas of many countries (Meyer and Peng, 2016). So the emerging economy includes an extensive impact on these businesses. If the GDP per capita is high in any country, it means that the economic structure is strongly built by the government of the country. So doing business with that country will be helpful for large enterprises to make perfect from there. It is also helpful to maintain the environmental sustainability of the business by getting the required amount of funds. However, there are massive opportunities for large enterprises to get development in developing countries where the economic structure is strong. [Referred to appendix 1]

Opportunities for global expansion

There are many opportunities for getting development by getting high amounts of investment from the shareholders. It is essential to increase the potential revenue of the company for expanding the business on an international scale (Shirodkar et al. 2018). All the social responsibilities in the corporate world need to be properly maintained and followed by all these business owners for reaching the target market and attracting the customers towards the brand. Talent should be accepted properly by the management team of the company, which is essential to increase the productivity level.

Moreover, the main challenge of global business is accepting the new culture of the country. So all the employees of the company need to accept the culture for getting opportunities related to the development of the business. Diversity in business needs to be well maintained and respected by all the employees and stakeholders of the company for trying innovative business ideas. There are many investment opportunities, revenue opportunities and diversification related opportunities can be obtained by expanding the business into an international level. It is helpful to get new talent by recruiting new members in the company. Moreover, cultural awareness is essential for increasing the sales rate of the company in new regions. All the department of the company needs to properly analyse the target market and must observe each and every detail of the customers. For example, the biting habit of the customers, the existing competitors, the economic feasibility and the market trends in that particular country needs to be thoroughly observed by the management team before expanding the business in those areas. Porter's five forces analysis can be done before entering a new market.

Discussion

Global expansion is dependent on high amounts of investment from the shareholders and investors of the company. So proper market analysis such as Porter’s five forces, PESTLE and SWOT are essential for expanding the business in a new country. Strength and weaknesses of the company need to be analysed by the hierarchy of the company. In addition to this, the risk related to the business must be analysed properly before starting a new project in a new region.

So there are a lot of things which need to be determined by all the respective authorities of the company before expanding the business into an international level (Zeev et al. 2017). There are many expansion strategies that can be adopted by multinational forms for achieving achievement in their business. Using modified technologies can be helpful for all these companies to increase their productivity. Lastly, it can be stated that all these companies need to understand the demand of the target market and the buying behaviour of the customers for satisfying them. It is essential to do a proper analysis of the demographic details of the customers, and the economic strength of the country needs to be analysed properly before entering the new market.

Reference List

Andorfer, A., 2017. Spreading like Wildfire: Solutions for Abating the Fake News Problem on Social Media via Technology Controls and Government Regulation. Hastings LJ, 69, p.1409.

Fernández, A., González, A. and Rodriguez, D., 2018. Sharing a ride on the commodities roller coaster: Common factors in business cycles of emerging economies. Journal of International Economics, 111, pp.99-121.

Mergel, I., 2016. Social media institutionalisation in the US federal government. Government information quarterly, 33(1), pp.142-148.

Meyer, K.E. and Peng, M.W., 2016. Theoretical foundations of emerging economy business research. Journal of International Business Studies, 47(1), pp.3-22.

Milosevic, T., 2016. Social media companies' cyberbullying policies. International Journal of Communication, 10, p.22.

Napoli, P.M., 2019. User Data as Public Resource: Implications for Social Media Regulation. Policy & Internet, 11(4), pp.439-459.

Shirodkar, V., Beddewela, E. and Richter, U.H., 2018. Firm-level determinants of political CSR in emerging economies: evidence from India. Journal of business ethics, 148(3), pp.673-688.

Tian, B. and Leon, A., 2016. For those Companies that Allow their People to Represent them via External Social Media, What Types of Activities and Level of Scrutiny are Applied?.

Zeev, N.B., Pappa, E. and Vicondoa, A., 2017. Emerging economies business cycles: The role of commodity terms of trade news. Journal of international economics, 108, pp.368-376.

Appendices

Appendix 1: Economic output in 2015