With its real-time nature and inexpensive content creation possibilities, social media has been increasingly used by firms seeking to internationalise to access market-related information and engage with target customers, stakeholders, and partners. Particularly for small and medium-sized enterprises (SMEs), this technology offers cost-effective communication and selling channels and faster, more direct ways to deal with issues of foreignness and resource scarcity.
Previous research on firms’ social media usage has explored different fields such as marketing, entrepreneurship, information systems, and where they intersect. However, most focused on domestic contexts and areas including social selling, branding and advertising, and relationship building. The literature thus lacks insights into social media’s role in fostering international growth. Addressing this gap, this study investigates how SMEs harness social media affordances in their internationalisation pursuits, specifically the types of organisational activities enabled by social media.
Social media affordances refer to the possible actions that the technology allows individuals to perform, which vary from person to person as this depends on the interaction between the technology and its user. The concept of affordances aims to move beyond the properties of the object (technology’s features) and instead concentrate on the utility of those features. By drawing from the theory of affordances, this study views the organisation’s action as primary and the technologies that afford the action as facilitating conditions.
Method and sample
This study adopted a qualitative multiple case study approach. Through theoretical and purposive sampling, the sample consisted of 8 SME-sized firms (that have fewer than 250 employees) that were actively pursuing international customers and/or other stakeholders via active social media use. Among the sample, there were equal mixes of firms that were B2B and B2C, that were from Finland and Australia, and that varied in terms of their digitisation
levels (both those with all operations enabled by technology and those with physical store and/or products).
Data were collected via two methods. First, semi-structured interviews were conducted face-to-face with one key informant per firm, such as the founding entrepreneur or other key decision maker. The interviews were 42 minutes on average and were digitally recorded and transcribed for analysis. Second, public and private data from each case firm were obtained, including media articles, website and social media data, videos, podcasts, marketing and advertising material, and international performance-related documentation. Additionally, social media profiles of the respondents and firms were also examined, including publicly available posts and other sources mentioned in the interviews, to ensure data integrity.
Key findings
At the centre of the findings is that social media is a critical and cost-effective tool for SMEs to grow in international markets. There are three major social media affordances that firms leveraged:
1. Information search potential: to generate market intelligence about foreign markets.
2. Information-conveying potential: to deliver marketing communications in international markets; and
3. Relationship initiation/building potential: to build and maintain relationships with international customers and stakeholders.
Although all case companies executed these three social media activities to grow in foreign markets, how they did it differs from each other. Two underlying logics were identified: firm-centric and market-centric. A firm-centric reasoning sees a firm’s growth strategy as a fixed, predetermined entity and social media as a tool to implement such strategy. On the other hand, a market-centric reasoning treats the firm’s growth strategy more flexibly, and thus, social media is used as a tool to shape the firm’s growth strategy. The data revealed varying logics underlying the social media activity of each firm, suggesting that most SMEs have both fixed and flexible elements in their growth strategies and their use of social media business affordances.
Regarding the use of social media to generate market intelligence, the firm-centric affordance of market assessment was used by four firms to assess the potential of new market areas that can be served with firm’s existing offerings and business models. The other four companies adopted market-centric logic and saw social media as a tool to generate market insights for tailoring new offerings and business models to market needs.
For marketing communications, most case companies followed firm-centric logic and perceived brand building as the key affordance of social media to foster brand awareness and desired image. These firms engage international customers and attract them to firm’s website through information-rich and educational social media content that creates value for customers. However, two of the case firms focused on social media’s interaction affordance with a market-centric view and therefore joined conversations initiated by customers to interact with them and make valuable contributions. Moreover, one case firm with a market-driven communication approach built their own communities and acted as a conversation
moderator for their firm-initiated discussion threads, which mostly comprised user-generated content.
For the third activity of relationship marketing, only one company used firm-centric logic for initiating relationships with preselected customers and stakeholders. This was a B2B case, in which the firm used social media to collect publicly available information about preselected customers, then contacted them via tailored messages that resonated with the target customers’ business needs. Other case firms held a market-centric view and used social media for relationship building with customers and stakeholders who had expressed some initial interest in the firm, also known as leads. These lead-initiated interactions can take many forms, for instance, a like or comment on a firm-generated social media post, or the potential leads contacting the company directly.
Recommendations
This study offers entrepreneurs and managers of internationalising SMEs an actionable framework to assess the firm’s growth strategy and its firm-centric and market-centric elements. Through this, they can focus on social media affordances that fit the firm’s strategy and resources to capture a foreign market in a cost-effective manner. For example, a young firm in their business development phase and operating in emerging industries can use a market-centric approach to generate market insights and customise their offering to fit the target market’s needs. By addressing the market’s ‘weak signals’, the firm would be able to gain significant competitive edge. Overall, the findings emphasise the importance for managers to understand how the industry, customer orientation, and organisational needs of the firm influence their use of social media business affordances.
Lead Researcher
More information
The research article is also available on eprints.