The impact of social media adoption on competitive advantage in the small and medium enterprises

Abstract

Internet-based social media delivers huge benefits to SMEs. There is, however, little research into whether SMEs in Gulf Cooperation Council states use it to gain competitive advantage. This study investigated the relationships between internet-based social media and competitive advantage in SMEs in the travel, restaurants and hotels sector in the area, using structural equation modelling and confirmatory factor analysis. It drew on a sample of 2,000 SME owners and directors across six countries. The results showed no significant relationships between social media use and competitive advantage. Only 10% of the SMEs were using social media. Of these, 72% used Facebook, 27% Twitter and 1% YouTube. All said social media had improved customer service and relationships, and 80% said it had improved products and service. Uncertainty in how to apply social media, measure the return on investment and persuade employees to embrace social media was the main challenges.