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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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According to Anderson (2007), extremely dynamic growth in popularity of Web 2.0 applications is the result of several important features, including the ability that users have to create content, enhance the impact of large groups because the solutions and opinions created in large groups are more reliable than the individual. Two more characteristics of Web 2.0 are a huge amount of easily accessible information and openness of the whole Web 2.0 concept. Tools brought along with Web 2.0 technologies perform an impact on the company's operations in all its functional areas. This is why McAfee (2006) created the term ''enterprise 2.0'' and defined it as a phenomenon that involves the use of social software platforms in the enterprise or between enterprises and their business partners and customers themselves (p. 23). In other words, enterprise 2.0 is the one that  widely use Web 2.0 technology as a platform (base) for operations in which the network (business and social) become the operating system.

The main reason for the company to rely on the use of web 2.0 technology and tools is the fact that many benefits can be obtained through interactive communication with clients, such as reducing operating costs, increasing knowledge and obtaining a better insight into the dynamics of the market and improving the relationship with suppliers and partners. Besides, this enables transparency and joint work of all employees, partners and customers in the area of innovation of company's products and services. The company involves in all of these activities with the intent to increase its competitiveness in the market. A survey conducted by well-known consulting company McKinsey on a sample of over 2,000 companies around the world gave the following results concerning the Web 2.0 technologies usage in business improvement. McKinsey Survey on Internet Technologies (2007) shows that regarding the application of web 2.0 technologies in relations with customers as the main point, the highest percentage of companies recognize the usefulness of these technologies for conquest of new markets and customers (47%) as well as providing services to existing customers (34%). The use of social networks is an essential tool by which they intend to implement the above activities to achieve competitiveness.

Company's reputation and its competitive position in the market can be affected both positive and negative when using social networks. One example of an innovative use of social networks was when Coca-Cola company launched a global campaign "Coca-Cola Challenge" after becoming aware of many amateur video materials on Youtube, with the theme of adding Mentos candy into a bottle of this drink (Lehtimäki et al., 2009, p. 18).  However, this author says that there are examples of the negative effects of social media on business, such as, for example, the case of Comcast Cable Communications Inc., one of whose employees are taken while sleeping with the customer a video was posted on Youtube and company's reputation and competitive position on the market was in danger (p. 15).

Today we can see that companies are increasingly trying to attract customers and win an increasing share of the market by taking advantage of social networks by offering customers to actively participate in defining a design or personalization of their products. For example, companies such as Nutella, Coca Cola, Heinz and many others offer their customers an option to personalize free label, as well as M&M, who offered users the choice of colors and messages to be printed out on the candies. According to Digital Training Academy (2014), Volkswagen conducted  "People's Car Project"  in China, giving an opportunity to anyone to take a part and vote in a car designing process, involving 3.1 million fans and becoming a number one car brand on Chinese social media in a very short time.

Internet and Web 2.0 technologies are powerfull and an excellent tool for businesses to gain benefit. They offer the opportunity for companies to advertise significantly cheaper than they have done via traditional media (newspaper adds, TV commercials, ..) and to focus their marketing activities on the target groups of their clients, promoting their products in an even more efficient way. This is primarily achieved by Web 2.0 tools, of which the best known and most popular are AdWords and AdSense software developed by Google (Kroenke & Hooper, 2011, p. 224). This is, of course, good for the companies themselves, since they now advertise through a significantly more powerful tools and resources at a much lower price, but, leads to negative consequences  for some other entities, such as loss advertising revenue for newspapers and magazines.

Viral Marketing and Web 2.0

According to Leskovec, Adamic and Huberman (2010) consumers show more and more interest in viral marketing and have the tendency to abandon traditional advertising forms. Viral marketing, thus represents the usage of social networks in sharing information about the products and services (p. 1).  Modern consumers are independent in the decision-making process about shopping and more demanding in terms of products and services quality. In circumstances where the products are increasingly becoming similar, the issue of competitiveness increasingly depends on how the consumer sees a certain brand. This means that the main advertising task of each company is to make consumer interested in a specific product. Because of the sense of belonging to a social group, the customer will much easier decide for the product and brand that enjoys the confidence of the group. Viral marketing is also about the implementation of social media. Company achieves dialogue and contacts with clients through their blog or social networks. One of the most used services in this sense is Youtube, allowing the desired messages to be transferred to a large number of existing and potential clients. The primary objective of social networks is not to carry out direct sales, but to contribute to the brand reputation and customer engagement in the form of digital relationships.

Internet and Globalization

The impact of modern the Internet and globalization on the modern corporate business environment cannot be studied separately.  According to Rzepka and Slysarcyzk (2016) globalization process begun at the end of 19th century (p. 39). Same authors say that the process of globalization creates a favorable climate for business activities, almost abolished by the boundaries between countries and continents and contributes to the merging of economies that were once very isolated. Stiglitz says that the Internet makes the process of globalization more inclusive and much faster by lowering communication costs and, therefore, enabling a free flow of information, knowledge and ideas (p. 470). In these new, global circumstances, changes in the business environment provide companies a better chance of being successful, but also warn about even greater consequences for failures and inadequate behavior. In the global market there is also an increasing imperative for merging companies since it becomes more and more often that only large organizations can remain competitive and continue to improve their business and being successful. By overtaking, buying and merging with others, a company is trying to reach the size necessary for survival and competitiveness in the new market.  Although this is an inevitable trend of doing business in the conditions of globalization, to me, this has a lot of negative consequences, particularly in terms of ethics and social responsibility. In fact, I think that this leads to destroying of many small companies and even some types of jobs and skills that previously existed. This all leads to increased economic uncertainty for many people, of which some loses their jobs and income. Manyika and Roxburgh (2011) explain, using French economy as an example, that the Internet largely contributed to the creation of many new jobs, but at the same time, it destroyed many (p. 4).   

Conclusion

With the development of the Internet and Web 2.0 technologies information has become the most important resource in the business world. The characteristic of these resources is that their value increases the more we use it. In this way, knowledge and information are becoming a capital asset. One of the changes that broad implementation of Internet technology caused is that now speed is more important and necessary for the success in relation to the previous period. Now those organizations that cannot adopt new ideas and technologies in the short term will have a problem in doing business. Before the rising of the Internet and Web 2.0 small organization were those who had the problem to cope with others. This is fully in line with the modern demands for building business relationships based on the expansion of relationships with customers. Customers are no longer just a passive participants in the business process. The application of Web 2.0 technologies in the marketing activities is intensifying because it allows customers to play an active role in stages of the business process, from developing a starting idea for some product or service till its consuming as a final product. Creating new and improving existing brands as well as maintaining good relations with customers is the basis of the success of all companies in the future.

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