Competitive Advantage Using Social Media and Artificial Intelligence

Subject: Tech & Engineering
Pages: 3
Words: 918
Reading time:
4 min
Study level: School


Social computing is an area that businesses can leverage to stay ahead of competitors. It refers to the interactive and collaborative facet of online behavior. Social computing elements include wikis, instant messaging, blogs, microblogging, and social networking sites. Social computing is supported by Web 2.0 through a framework of processes and applications. Businesses can exploit the power of social computing through social media and artificial intelligence, enabling them to achieve sustained competitive advantage (Rainer & Prince, 2021). It is essential to explore how businesses use social media and artificial intelligence to obtain a competitive advantage and the risks social computing poses.

Social Media

Social media is a unique tool that successful firms can use to achieve a competitive advantage in several ways. First, businesses can utilize social media to market their venture and complement traditional promotion channels. As a result, they can save on high advertising costs and generate sales. For instance, companies can entice social media users with loyalty incentives and discounts to increase their sales. Social media advertising is often charged when users click ads, making it less expensive and more effective than traditional marketing. Second, businesses can leverage social media to relate to consumers in real time. Firms can interact with consumers online, increasing brand visibility and engagement. For instance, a company may use social media sites such as Facebook and Twitter to answer product questions, which shows expertise and fast response (Tourani, 2022). Disseminating and receiving information between customers and businesses thus is rapid, enabling firms to gain competitive advantages over a business that responds slowly.

Third, firms can utilize social media to attract top talent. Recruiting talented employees is a significant concern for companies operating when the global talent competition has intensified. Existing scholarship shows that competent employees can be a firm’s source of competitive advantage. Thus, collaborating with professional hiring websites and top universities can allow firms to scout future employees with high potential. For example, firms can use LinkedIn to connect with potential employees with specialized skills. In markets with thin competitive margins, attracting top talent can allow companies to innovate and fill positions affected by skilled workers’ shortages. Fourth, businesses can maintain their social media presence and resolve problems that customers raise. Customers will certainly face challenges while using a firm’s products. When encountering challenges, they turn to social media to voice their complaints (Dwivedi et al., 2021). For example, a phone user may complain to the company’s customer service on Facebook. If the firm responds quickly and resolves the problem, the customer will be happy, increasing repurchases.

Artificial Intelligence

Artificial intelligence (AI) is not a futuristic idea anymore as multiple small and large businesses have started embracing technology to improve business functions.AI and can help forward-thinking companies to build sustainable competitive advantage in various ways. First, companies are using AI to improve predictions and estimations in projects. Companies such as Walmart, Apple, and Amazon are utilizing AI to accurately forecast supply and demand to achieve competitive advantage in several ways. AI is used in these firms to design better offerings, identify effective and reliable supply chains, and guide planning through sales trends. Second, AI has allowed most manufacturing companies to reduce equipment, labor, and fuel costs, maximize the running time of systems, and create additional output capacity (Chan et al., 2022). For instance, firms such as Tesla and General Motors use AI-powered systems to innovate processes to increase production and reduce necessary inputs

Third, AI is used by many businesses to anticipate risks, intercept and avert incurring losses, and reduce downtime. For example, intelligent systems are being utilized to identify and reduce high-risk investments and clients in the banking industry. In addition, Amazon is using AI to improve quality control and stop shipping defective products. Fourth, AI is used by businesses to give customers a convenient, personalized, and rich experience, resulting in a competitive advantage. For instance, Google uses AI to recommend relevant services, content, and products (Chan et al., 2022). In addition, Businesses are using AI to customize experiences during fundamental customer interactions.


Companies face various risks as they continue to use AI and social media to enhance business. For instance, social media exposes organizations to losing sensitive data and intellectual property. Leakage of data or premature release of sensitive strategic information can result in serious financial losses. The risk is often caused by human error through social engineering and phishing attacks; thus, it concerns firms (Rainer & Prince, 2021). In addition, companies are exposed to reputational loss when negative consumer opinions go viral on social media. Negative feedback and reviews spread quickly on the internet; therefore, organizations must be careful in managing their online reputation. AI use poses several business risks, including bias in decision-making and personal privacy violation. AI systems learn using datasets that may be influenced by assumptions, hence being susceptible to incorrect decision-making (Chan et al., 2022). With exponential growth in the global data sphere and AI use, employee and customer data risks increase.


In conclusion, it is critical to evaluate how businesses leverage social media and AI to gain competitive advantages and the threats the technologies pose to them. Businesses can use social media to stay ahead of their competition by solving consumer problems, engaging customers, hiring top talent through promotional activities, and increasing brand visibility. Companies use AI to improve prediction models, innovate processes, anticipate risks, and provide personalized services to consumers. Using AI and social media poses several business risks, including privacy violations, biased decision-making, and reputational loss.


Chan, L., Hogaboam, L., & Cao, R. (2022). Applied artificial intelligence in business: Concepts and cases. Springer.

Dwivedi, Y. K., Ismagilova, E., Rana, N. P., & Raman, R. (2021). Social media adoption, usage and impact in business-to-business (B2B) context: A state-of-the-art literature review. Information Systems Frontiers, 1-23.

Rainer, R. K., & Prince, B. (2021). Introduction to information systems (9th ed.). John Wiley & Sons.

Tourani, N. (2022). Thriving in a shifting landscape: Role of social media in support of business strategy. Asia Pacific Management Review.