Location-based social media and the strategic impact for companies

Abstract

In the last couple of years online social networks expanded to a new field, location (Scellato and Mascolo, 2011). Technologies, such as smartphones and GPS, combined with users’interest in being connected regardless of their location, created the opportunity for theappearance of location-based social media (Chow et al, 2010). This dissertation focuses in studying if location-based social media has a strategic impact for companies. To contextualize this subject, literature on Web 2.0 and online social media is reviewed. Furthermore, strategic frameworks (Resource Based View) and strategic concepts (Customer Relationship Management and Contextual Marketing) provide the theoretical base through which the discussion is carried. Empirical data collection is conducted in order to understand what are users’ preferences in the context of location-based social media, and to what extent they are willing to interact with companies. Through this process the research hypothesis presented in this dissertation are tested. The results are then extended to the strategic domain, allowing to comprehend under what assumptions location-based social media can be strategic for companies. Through the Resource Based View framework application contextual personalization is considered a factor that may conduct companies to obtain a sustained competitive advantage, by inducing switching costs to their customers, depending on companies’ propensity to appropriate returns from their existing superior capabilities. This dissertation concludes that location-based social networks can have a strategic impact for companies, under the assumptions that network effects exist in location-based social networks and that companies are able to use them in order to perform contextual personalization, originating switching costs for their customers. Additionally, this dissertation aims to contribute for the increase of the current knowledge over an emergent and present subject.

Date of Award	2011
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Paulo Amaral (Supervisor)