The document investigates the impact of Facebook usage on the financial and non-financial performance of small and medium enterprises (SMEs) in Egypt, identifying factors such as compatibility, cost-effectiveness, trust, and interactivity. It concludes that while interactivity positively influences Facebook usage and its performance benefits, compatibility and trust do not significantly affect usage. Recommendations include improving system compatibility, focusing on the cost-effectiveness of Facebook, and enhancing information security.

1. Social Media
Effect on SMEs in Egypt
Prepared by: Walid Saafan
August, 2016

2.  Research model
 SMEs’ survey
 Research limitations
 Conclusion
Social Media effect on SMEs 2

3. Investigate the
factors/drivers that influence
Facebook usage among small
and medium enterprises
(SMEs) in Egypt.
Examines the impact of
Facebook usage on financial
and non-financial
performance of SMEs.
Social Media effect on SMEs 3

4. Examines the influence of
compatibility, cost
effectiveness,
interactivity and trust on
Facebook usage and its
subsequent impact on
organizations
performance
Social Media effect on SMEs 4

5. Compatibility
Cost effectiveness
Trust
Interactivity
Facebook use
Non-financial
performance
Financial
performance
H1
H2
H3
H4
H5
H6
Social Media effect on SMEs 5

6. H1. Compatibility positively influences Facebook usage
H2. Cost effectiveness of Facebook positively influences social
media usage
H3. Trust on Facebook positively influences social media usage
H4. Interactivity of Facebook positively influences Facebook usage
H5. Facebook usage will have positive impact on non-financial
performance
H6. Facebook usage will have positive impact on financial
performance
Social Media effect on SMEs 6

7. SMEs’ survey

8. Social Media effect on SMEs 8
https://goo.gl/forms/Mxd3aQY7ul0lRP5z2

9. Social Media effect on SMEs 9

10. Social Media effect on SMEs 10

11. Social Media effect on SMEs 11

12. Social Media effect on SMEs 12

13. Strongly
Disagree
Strongly
Agree
1 2 3 4 5
Usage1 Advertise and promote product and services 1 0 6 2 5
Usage2 Create brand visibility 0 1 5 3 5
Usage3 Conduct marketing research 0 5 4 3 2
Usage4 Get referrals (word of mouth via likes, shares and followers in Facebook 0 2 5 2 5
Usage5 Develop customer relations 0 1 1 6 6
Usage6 Communicate with customers 0 1 4 4 5
Usage7 Conduct customer service activities 1 1 4 3 5
Usage8 Receive customer feedback on existing product/services 0 1 5 5 3
Usage9 Receive customer feedback on new/future product/services 1 0 6 5 2
Usage10 Reach new customers 2 0 1 5 6
Usage11 Search for general information 0 2 6 3 3
Usage12 Search for competitor information 4 0 3 4 3
Usage13 Search for customer information 1 3 5 2 3
Trust1 Adequate measures to safeguard information posted 1 2 9 1 1
Trust2 A robust and safe environment to transact information 1 6 4 2 1
Trust3 Adequate legal and technological measures to overcome usage problems 1 6 1 6 0
Trust4 Reliable information 1 6 4 3 0
Trust5 Dependable knowledge 0 5 8 1 0
Int1 Features for interactive communication with customers 0 3 4 4 3
Int2 Appropriate amount of interactive features (e.g. graphics, pop-up windows, animation,
music, voices) 3 1 5 3 2
Int3 Features for vivid responses 1 3 6 1 3
UsageTrustInteractiv
My organization use Facebook to […]
Facebook provides […]
Social Media effect on SMEs 13

14. Strongly
Disagree
Strongly
Agree
1 2 3 4 5
Imp1_CR Reduced the cost of communication with customers 0 2 3 4 5
Imp2_CR Reduced the cost of advertising and promotion 0 2 3 7 2
Imp3_CR Reduced the cost of customer service and support 2 2 4 3 3
Imp4_CS Enhanced customer service 1 4 3 3 3
Imp5_CS Increased customer loyalty and retention 2 0 1 7 4
Imp6_CS Improved customer relationship 1 0 3 4 6
Imp7_BnC Improved brand visibility 0 0 5 4 5
Imp8_BnC Improved company image 0 1 2 4 7
Imp9_BnC Improved competitive position 0 1 4 5 4
Imp10_Info Enabled easier access to customer information 0 3 3 6 2
Imp11_Info Enabled easier access to competitor information 0 3 4 6 1
Imp12_Info Enabled easier access to market information 0 3 6 4 1
Imp13_Info Enabled faster delivery of information to customers 0 1 6 4 3
Comp1 Facebook usage is compatible with the company’s IT infrastructure 1 2 5 4 2
Comp2 Facebook usage is consistent with the company’s beliefs and values 1 0 5 7 1
Comp3 Facebook usage is consistent with the company’s business strategy 1 1 3 8 1
CE1 Facebook is more cost effective than other types of marketing or customer service
technologies 1 3 2 1 7
CE2 Organization can avoid unnecessary cost and time by using Facebook 1 1 6 4 2
CE3 Facebook saves costs (time and effort in marketing, branding and customer service) 1 0 6 4 3
5-10% 11-15% 16-20% >20%
Perf1 Increase in sales transactions 5 4 3 2
Perf2 Increase in sales volume 9 3 2 0
Perf3 Increase in sales inquiries 8 1 1 4
Perf4 Increase in number of customers 6 1 2 5
CosteffecFianperfNon-FinperfCompatib
Indicate the organizations’ performance after using Facebook
Facebook usage in the organization had […]
Compatibility and cost effectiveness of Facebook […]
Social Media effect on SMEs 14

15. Social Media effect on SMEs 15

16. Indicator reliability R2
Factor loadings (>0.7)
Social Media effect on SMEs 16

17. Compatibility CostEffectiveness Trust Interactivity FBUse NonFinPerf FinPerf
Comp3 Facebook usage is consistent with the company’s business strategy 0.966
Comp2 Facebook usage is consistent with the company’s beliefs and values 0.951
Comp1 Facebook usage is compatible with the company’s IT infrastructure 0.725
CE3 Facebook saves costs (time and effort in marketing, branding and customer service) 0.921
CE2 Organization can avoid unnecessary cost and time by using Facebook 0.741
CE1 Facebook is more cost effective than other types of marketing or customer service
technologies 0.495
Trust3 Adequate legal and technological measures to overcome usage problems 0.915
Trust2 A robust and safe environment to transact information 0.880
Trust5 Dependable knowledge 0.832
Trust4 Reliable information 0.746
Trust1 Adequate measures to safeguard information posted 0.712
Int3 Fearu res for vivid responses 9.919
Int2 Appropriate amount of interactive features (e.g. graphics, pop-up windows; animation,music, voices) 0.965
Int1 Features for interactive communication with customers 0.769
Usage5 Develop customer relations 0.910
Usage6 Communicate with customers 0.776
Usage8 Receive customer feedback on existing product/services 0.707
Usage9 Receive customer feedback on new/future product/services 0.704
Usage10 Reach new customers 0.693
Usage4 Get referrals (word of mouth via likes, shares and followers in Facebook 0.692
Usage11 Search for general information 0.683
Usage7 Conduct customer service activities 0.413
Usage3 Conduct marketing research 0.356
Usage1 Advertise and promote product and services 0.113
Usage12 Search for competitor information 0.010
Usage13 Search for customer information (0.011)
Usage2 Create brand visibility (0.140)
Imp4_CS Enhanced customer service 0.829
Imp13_Info Enabled faster delivery of information to customers 0.800
Imp6_CS Improved customer relationship 0.788
Imp10_Info Enabled easier access to customer information 0.702
Imp9_BnC Improved competitive position 0.667
Imp3_CR Reduced the cost of customer service and support 0.636
Imp2_CR Reduced the cost of advertising and promotion 0.578
Imp12_Info Enabled easier access to market information 0.578
Imp5_CS Increased customer loyalty and retention 0.574
Imp1_CR Reduced the cost of communication with customers 0.538
Imp11_Info Enabled easier access to competitor information 0.475
Imp8_BnC Improved company image 0.448
Imp7_BnC Improved brand visibility 0.300
Perf3 Increase in sales inquiries 0.912
Perf2 Increase in sales volume 0.869
Perf4 Increase in number of customers 0.708
Perf1 Increase in sales transactions 0.339
FianperfCompatibCosteffecTrustInteractivUsageNon-Finperf
Social Media effect on SMEs 17

18. Outer model measurement
loadings
CE1 not reliable indicators – Can be removed from the model
Compatibility CostEffectiveness Trust
Comp3 Facebook usage is consistent with the company’s business strategy 0.966
Comp2 Facebook usage is consistent with the company’s beliefs and values 0.951
Comp1 Facebook usage is compatible with the company’s IT infrastructure 0.725
CE3 Facebook saves costs (time and effort in marketing, branding and customer service) 0.921
CE2 Organization can avoid unnecessary cost and time by using Facebook 0.741
CE1 Facebook is more cost effective than other types of marketing or customer service
technologies 0.495
Trust3 Adequate legal and technological measures to overcome usage problems 0.915
Trust2 A robust and safe environment to transact information 0.880
Trust5 Dependable knowledge 0.832
Trust4 Reliable information 0.746
Trust1 Adequate measures to safeguard information posted 0.712
Social Media effect on SMEs 18

19. Internal consistency
internal consistency
α≥0.9 Excellent
0.9>α≥0.8 good
0.7>α≥0.8 Acceptable
> 0.7
Social Media effect on SMEs 19
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20. Collinearity assessment
Social Media effect on SMEs 20

21. Second order formative constructs
Interactivity significant impact on Facebook use
FBUse has significant impact on FinPerf and NonFinPerf (higher)
Social Media effect on SMEs 21

22. Bootstrapping t-test
Social Media effect on SMEs 22

23. Testing the hypothesis
Original
Sample(0)
Sample
Mean(M)
Standard
Deviation
(STDEV)
TStatistics
(IO/STDEVI)
PValues
H1.CompatibilitypositivelyinfluencesFacebookusage -0.459 -0.432 0.492 0.932 0.352
H2.CosteffectivenessofFacebookpositivelyinfluencessocialmediausage 0.105 0.131 0.526 0.2 0.842
H3.TrustonFacebookpositivelyinfluencessocialmediausage 0.265 0.269 0.327 0.809 0.419
H4.InteractivityofFacebookpositivelyinfluencesFacebookusage 0.676 0.715 0.259 2.613 0.009
H5.Facebookusagewillhavepositiveimpactonnon-financialperformance 0.825 0.825 0.009 9.133 0
H6.Facebookusagewillhavepositiveimpactonfinancialperformance 0.568 0.559 0.162 3.517 0
We accept hypothesis H4, H5, and H6 at 95% confidence level
Social Media effect on SMEs 23

24. Social Media effect on SMEs 24

25. Compatibility, cost effectiveness and trust are
not significant to Facebook usage
Interactivity positively impact Facebook usage
Facebook usage had a positive impact of
Egyptian SMEs in terms of financial and non-
financial performance
Social Media effect on SMEs 25

26. Social Media effect on SMEs 26
 Research findings
can’t be generalized
due to small sample of
SMEs

27. Social Media effect on SMEs 27

28. Results inline with LitRev.
o SMEs not utilizing the use of the social media
in their marketing activities
o Compatibility has a negative impact on
Facebook usage
o SMEs don’t see the Facebook as a cost
effective as other types of marketing
o Trust of the channels and reliability of
information provided are not significant to
Facebook usage
Social Media effect on SMEs 28

29. Recommendations
Improve compatibility and IT system
[ interconnectivity]
Pay more attention to the cost effectiveness
of Facebook usage
[financial performance]
Put more emphasize on the information
and systems’ security
[ trust, financial performance]
Social Media effect on SMEs 29

30. Walid.Saafan@gmail.com