AI in Information Management and Business Strategy
BA 5080 - Business Strategy
University of Cincinnati
August 13, 2024
Introduction and Assessment
Currently, information collection and management have become very
critical aspects of innovation and developing strategy for many
business organizations. Management of information has become
necessary primarily because of the emerging novel concept of ‘big
data.’ One of the biggest reasons the concept of big data has emerged
is the degree to which information can be produced and made
available. Specifically, the process of digitization or the process
through which analog information is converted into discrete, machine-
readable format has triggered the concern about how this information
can be stored and managed effectively. More than three decades ago,
most offices had to grapple with the problem of managing paper files
and organizing them into a form that can enhance easy accessibility,
but currently, most organizations have embraced technology and can
store such huge volumes of information on computers. The advantage
now is that organizations need less room for storage and that the
information can be retrieved easily just by simply typing specific
keywords..
However, the availability of vast volumes of information on computer
space has also raised the concern of how to manage it properly, and
even use it to the advantage of the respective business organizations.
The massive chunk of information is what is popularly referred to as
big data, and it is what business analysts are trying to explore
opportunities therein. Out of the big data concept, there has emerged
the concept of cloud computing, which are essentially storage
platforms for the enormous data of various business organizations.
Ideally, cloud computing is akin to the outsourcing of storage space
for big data. Companies that offer cloud computing services,
especially a company like Google, have developed systems that ensure
that their clients’ data is safe, secure, and can be retrieved with
convenience. The increased popularity of cloud computing
demonstrates that most companies are only focusing on how to store
their data; they recognize that their systems could have loopholes,
which unscrupulous individuals could exploit, and perhaps interfere
with their operations. Secondly, most organizations also only seem to
care about freeing up space on their systems to collect more
information, and then subsequently, outsource more storage space
from cloud computing companies..
One of the opportunities most business organizations are missing from
is that this huge volume of data can be put to good use in the aspects
of analysis, prediction, and, ultimately, the development of essential
solutions. The maxim that information is power needs to apply to the
use of big data. For a long time, most business organizations have
relied on humans to analyze data, interpret it, and make crucial
decisions. Companies have also incurred large sums of money to train
employees or even hire employees with the necessary skills to gather
information in order for businesses to develop strategies. On the same
note, some businesses or companies send their employees overseas to
learn about the trends of consumers or potential clients in the foreign
countries, and it is quite common currently to hear about the
importance of understanding the diverse cultures around the globe, as
well as buying habits of people from the diverse cultures. However,
most of these aspects can be learned using computer algorithms,
developed and interpreted by Artificial Intelligence (AI) systems. To
be precise, the AI systems can make various inferences from the big
data, which most business organizations are ignoring or depending on
third parties to manage..
AI is a novel concept that refers to automated technological systems,
which are used in diverse aspects to make operations easier, as well as
to improve the outcomes of various processes. In this context, the
analysis will only focus on the use of AI systems in the management
of the massive volume of information generated currently in the
business environment to foster innovation and develop a strategy.
Although human beings are still important in the operation of
businesses, and it is also not expected that AI systems will replace
humans entirely, the volume of information generated in the modern
business environment cannot be managed and interpreted by human
beings easily (Soni et al., 2019 p.11). Therefore, the use of AI systems
will make the interpretation of this information easier, and
consequently facilitate the innovation and strategy development
process..
Analysis
Definition
According to De Mauro (2015), artificial intelligence refers to “the
ability of a machine to learn from experience and perform tasks
normally attributed to human intelligence, for example, problem-
solving, reasoning, and understanding natural language” (98). In the
context of business information, the application of AI would refer to
the ability of these machines to perceive the big data, analyze this
data, and make specific inferences from it..
PESTEL Analysis
This section mainly describes the various factors that may affect the
adoption of artificial intelligence in the management of information
and the development of strategy in business by a business.
Conventionally, PESTEL illuminates political, Economic, Social,
Technological, Environmental, and Legal factors that may affect the
operation of a business. In this context, these factors focus on how AI
technologies may be affected in business..
Political factors
The political factors that may affect the adoption of AI systems are
quite diverse. The first factor concerns the level of political stability.
Before a company decides to invest in a particular country, they need
to ensure that the environment is conducive for business operations. If
a company cannot operate or set up business in a particular region of
the globe, it means that the development of AI systems will not be
realized. Since this essay focuses on the opportunities offered by the
development and use of various AI tools in business, an unstable
political environment implies that the tools could not be used
altogether. A politically unstable market or country also affects the
collection of information. When people are displaced or do not have
predictive buying patterns, then such a group of people forms an
unreliable market, and it is a waste of time for a business to focus its
resources on such a market. Closely related to political stability is the
integrity of politicians, and their likelihood to engage in acts of
corruption. The consequences could be possible impeachments or
resignations of high-level government employees who may be quite
skillful. If such employees resign and could be knowledgeable in the
implementation of various AI systems, then their penetration could be
derailed..
Another political factor relates to the various policies that the
government creates in relation to business operations. For example,
most countries in the Arab world, or precisely, Muslim countries have
policies on the sale and purchase of alcohol. Indeed, companies that
deal with the sale of alcohol may not find the use of AI systems to
manage and analyze information not very useful in such countries.
Perhaps the most prominent political policies that may hinder the
penetration and use of AI tools in business are those concerning the
penetration of the internet, especially social media. In the current
world, many companies have taken advantage of the internet, and
social media, in particular, to advertise their products, monitor
consumer trends, and predict their purchase trends. However, some
oppressive regimes prohibit the use of certain technologies. A good
example is a country such as North Korea that does not allow the
public to use the internet or to get connected to networks that have a
global reach. Therefore, such countries present an impediment to
access to information and the use of AI technologies to analyze
information..
The proper political aspect that favors the use of AI tools in business
is the rapid pace at which many countries are embracing technology.
Currently, most developing countries in Africa, Asia, and South
America have social media networks, and various leaders do not feel
much threatened with people interacting on these sites. On the same
note, countries are also investing heavily in the development and
proliferation of technology. The objective of such a massive
investment is that technology will create efficiency and improve
people’s access to critical information. A continent like Africa, which
for a long time, has been perceived to be backward currently is
involved in efforts to increase internet penetration. According to a
study, there are more than 525 million internet users in Africa
(Ngesah, 2005, p.11). Such statistics represent crucial information to
companies that seek to expand their operations to Africa, for instance..
Through the use of AI data analysis tools, business organizations can
analyze the demographic composition of these users, the amount of
time they take on the internet, as well as the kind of information these
people search on the internet. These people could search for
information related to various products. AI tools in business are
designed to gather such information (the type of products people such,
as well as their preferences). The most important issue here is that as
governments throughout the world continue to allow internet
penetration and other innovations related to technology spread, AI
systems gain much prominence because companies get access to more
information as a consequence of the large number of people accessing
the internet..
Economic factors
One of the factors that affect the use of AI tools in any country relates
to the economic system in operation. For instance, a monopolistic
economic system may discourage the use of AI tools in business
information management and strategy development. A country like
North Korea has the state running almost all businesses. One of the
industries most affected is the media industry because the state
controls all information that people receive. A company using AI tools
in such an industry would have analyzed information such as the
number of viewers, as well as, their demographics. Consequently, that
information would have been used to innovate and develop a strategy
aimed at appealing to the target market. However, in industries that
have monopolies, it is challenging to use AI tools to analyze
information because entry into the industry is restricted..
Nevertheless, most markets in the current world are liberal, and
virtually in almost every venture, there is competition. Competition
makes the use of AI tools very necessary because businesses will
inevitably try to analyze the market and become innovative to outdo
one another. Therefore, the growth of AI tools will be exacerbated by
a challenge; stiff competition (Kok et al., 2009 p.1). Businesses will
need to analyze important information about consumers in order to
take them customer-specific adverts or make products that are tailored
towards solving their needs. Additionally, an essential economic
factor relates to the GDP of a country, and the measures the economic
development of a country. While AI tools seem to be more suitable in
developed countries such as the United States, and a majority of those
in Europe, developing countries in Africa, Asia, and South America
are also expanding their economies, and with the improvement in
people’s standards of living, their purchase power also rises.
Therefore, AI tools in business will focus on diverse markets
throughout the whole world, and the data generated will help decide
where to invest and what to invest..
Social factors
According to Noonan and Piatt (2015), the demographics of a
population, which means the respective genders and ages of a
population, primarily affects the decision whether a product may be
marketed to the population. For example, makeup products are mostly
targeted to women, and that means people using AI tools to project
purchase trends for such products will mainly focus on women.
Secondly, the class distribution among a certain population will also
be important in developing AI tools that generate information and
foster innovation of products, which are directed at the different
classes. For example, in the United States, Wal-Mart mainly focuses
on the low-income earners, while a retail store such as Costco focuses
on the affluent (Marcilla, 2014 p.6). Therefore, in terms of targeting,
these two retail stores collect different information using various AI
tools. The last crucial social factor is the education level of various
consumers. Most educated people have embraced technology and
could prefer convenience over other hustles. For example, most
educated people live in urban centers, are likely to use Uber car
services, may order products online, and have them delivered to their
doorsteps..
Looking at the opportunities of the various social factors, it is
important to start with a demographic factor such as age. Young
people seem to have embraced technology more compared to adults,
and for developing countries, especially in Africa, young people form
the majority of the population. Since young people are more
technology-savvy, this shows the potential of the use of AI tools to
analyze this market in the form of consumption trends, attitudes,
preferences, and styles (Al-Zahrani and Marghalani, 2018 p.2).
Secondly, most people continue to be educated even in the poorest
countries, and subsequently, there is a general trend of rural-urban
migration. Most people migrate from rural areas to search for better
opportunities (education, employment, social amenities) in urban
areas. Since people in urban areas are likely to embrace technology, it
means that the population using technology is increasing rapidly.
These people will need to travel within the urban centers, eat-in cafes
or restaurants, purchase home items, and even clothes. Evidently,
continued urbanization, and embrace of technology is going to
increase the use of AI tools to analyze information about consumers..
Technological factors
It is possible to argue that AI has developed and continues to gain
prominence because the rapid advancement of technology. Firstly, it is
already mentioned that big data has necessitated businesses or
companies to develop AI tools to analyze, interpret, and make certain
inferences from the massive chunk of information. Big data has
emerged because most information is converted from analog forms to
a form that can be stored and interpreted by machines. With the
emergence of smartphones, people access a variety of information
about products, places, people, among other things. Mobile phone
manufacturing companies such as Apple and Microsoft are competing
incessantly to make superior models to woe their target customers.
Young people are mostly targeted because they are more technology-
savvy..
Far from computers and mobile phones, social media companies such
as Facebook, YouTube, Twitter, and Instagram have grown, and all
these sites have taken advantage of the enormous social media
subscriptions to advertise various products. According to Noonan and
Piatt (2015), there are more than 3.8 billion social media users in the
world. Consequently, many companies continue to explore these
channels to advertise their products. These companies not only focus
on selling their products but also by developing AI tools, which
analyze the number of people that visit their social media pages, the
kind of products they search, as well as how long they last on those
pages. The analysis of this information is not meant for storage; the
companies use it to innovate and develop a strategy. The most
important thing is that with increasing population and the penetration
of technology across communities all over the world, the number of
social media users will increase, and apart from using the sites for
advertising, companies will need to develop strategies using analysis
of various AI tools..
Environmental factors
Climate change currently is a significant concern throughout the
world. The media has become more vocal on the issue, and
consequently, more people are becoming conscious about their
environment. The increased awareness poses a significant challenge,
especially to businesses that do not observe various environmental
conservation measures. Even when such businesses use AI tools to try
and appeal to the target market, consumers may be influenced by
activists to boycott the products of companies that do not adhere to the
stipulated measures. A company such as Volkswagen was forced to
withdraw thousands of cars from the global market because of
excessive emission of fumes, and that resulted in the loss of millions
of dollars (Glikson et al., 2019 p.223). Various environmental
conservation organizations have toughened regulations on production
processes, and such stringent policies may affect how organizations
conduct business, and subsequently use various AI tools..
The various environmental concerns and regulations imply that
businesses, which adhere to the stipulated measures and are conscious
of their production and operations may witness high customer traffic,
which will consequently necessitate the use of AI tools to gather
important information and develop strategies that address their needs.
However, there is also competition among companies to try and meet
various environmental conservation obligations to get access to this
environmentally conscious market. To be able to develop various
strategies of adhering to the environmental conservation stipulations,
businesses need to collect information about various environmental
trends using AI tools, and that means that with increased awareness,
businesses will have to change their strategies continuously..
Legal factors
The first legal aspect that continues to shape the use of AI tools in
business is the creation and enforcement of intellectual property laws.
Various companies develop various AI tools, and business
organizations need to purchase them or seek permission before using
them. On the other hand, various business organizations need to hire
individuals with the necessary knowledge and skills to develop the AI
tools needed to manage information and develop a strategy. Therefore,
it is evident that the breach of the stipulated laws concerning patents,
copyrights, and other forms of intellectual property can be very costly
for businesses in terms of financial penalties, as well as the time lost
in legal battles. Most of the time, businesses involved in the
technology sector have been having legal tussles over copyright
issues, especially companies such as Microsoft and Apple..
The legal environment can also be viewed in a positive light,
especially concerning intellectual property. The stringent measures
that are meant to protect individuals, businesses, and organizations
from third-party unauthorized use of their AI tools for information
management ensure that these businesses benefit from their
innovations. Therefore, the legal environment has and continues to
help the growth of AI systems through the protection of people’s ideas
through punishing individuals who steal these ideas and use them for
personal gain. With robust legal systems, there is immense
opportunity in the development and use of AI tools in business in the
management of big data and the development of essential inferences
from it..
However, there may also be legal restrictions on the type of data or
information business entities collect about their target customers. The
United States Congress has variously summoned the management of
Facebook over allegations of data breaches. The biggest issue was
about the 2016 presidential elections, where Facebook was accused of
letting third parties have access to confidential information on their
users. The information collected was used to develop targeted
campaign messages that were designed to give a particular candidate
some leverage in the elections (Fuller, 2019, p.14). Although the
sending of targeted messages shows the potential of AI tools in
business information management and strategy developed, several
ethical issues are also raised. The most prominent ethical issue is that
some individuals may use personal information for other intentions far
from the business objectives. Some individuals within the business
organizations may be malicious and sometimes may collude with third
parties to intrude on the privacy of their customers. Therefore, most
countries have developed strict laws surrounding the protection of
sensitive customer information, and when any breaches occur,
business organizations may have to incur high financial penalties.
Therefore, it is essential for business organizations to be very cautious
on who accesses the information, and what measures they need to put
in place to protect the sensitive information..
Recommendations
Amazon was one of the first companies to use AI tools to drive its
product recommendations. Therefore, Amazon serves as a model
company in analyzing the potential of AI tools, especially in the
management of information, and how that information can be used to
boost business growth. Firstly, Amazon started purely as a bookselling
business but has rapidly grown to include many products, and at the
moment, it rivals large retail stores such as Wal-Mart. One interesting
thing about Amazon is that its business model is purely online.
Customers order various products online, and through the superior
delivery system, the company delivers the products to the doorsteps of
the customers. Amazon enjoys about 49 percent of the United States’
e-commerce market (Donici et al., 2012, p.1)). Such a share shows
that Amazon is the leading online retailer in the United States..
The success of Amazon’s e-commerce sector is mainly because of
how the company manages information using various AI tools.
According to Donici et al., (2012), Amazon takes data analysis of their
customers seriously. For instance, whenever a customer clicks on a
product but does not purchase it, such information is collected to
establish the reason it was not purchased. Based on such information,
the company develops a strategy to make the products more appealing
to the customers, and consequently influence them to purchase the
products (Donici et al., 2012 p.2). Artificial intelligence tools are also
used at Amazon to predict customer behavior and patterns. Whenever
a customer clicks on the Amazon application, they are likely to see a
list of suggestions of items. This list is usually compiled by the
various AI tools based on their previous purchase behaviors, and that
makes it easy for the customers to spot products and for the company
to influence the customers to purchase their products..
Based on Amazon’s success, various recommendations can be made.
Firstly, owing to the potential of AI tools in the business currently and
in the future, it is important for business organizations to adopt AI
tools that focus on analyzing information and increasing their sales.
Crucial information to be collected by such tools should be about
consumer preferences and habits. Once these aspects are known, the
AI tools can synthesize the information and suggest products to
customers that are commensurate with their preferences. Secondly, AI
tools in business should be developed with the analysis of
demographics in mind. Demographics are essential in understanding
population trends and composition. In such a case, the AI tools should
be able to generate data about the emerging markets, as well as those
which could probably be on the decline. That means AI tools need to
help a business avoid certain risks and, at the same time, explore
potential markets..
Thirdly, business organizations need to embrace technology more to
be able to enjoy the use of various AI tools. Businesses that still have
not digitized are missing out on the potential of AI tools in
synthesizing information and helping them to develop a strategy.
When businesses digitize, they get access to a lot of information. For
instance, potential customers will start visiting their sites. When AI
tools are embedded in these sites, businesses will learn about the
habits of consumers, and consequently, develop products that suit
them. Fourthly, it is important for businesses to operate within the
existing legal framework to enjoy the benefits of AI tools. While AI
tools offer limitless potential in innovation and strategy development,
wrong use can also put a business into trouble. It is necessary to avoid
confidential data breaches, and that calls for strict data protection
measures. The last recommendation is that businesses need to focus
on emerging markets with huge populations and high technology
penetration. These populations represent potential markets, and since
the penetration of technology means that people have acquired various
devices such as computers and smartphones, and can access the
internet, these are attractive markets for AI tools. The AI tools will
analyze various factors, and make certain inferences that will help the
specific businesses to develop strategy, innovate, and gain leverage in
their respective industries.
One of the opportunities most business organizations are missing from
is that this huge volume of data can be put to good use in the aspects
of analysis, prediction, and, ultimately, the development of essential
solutions. The maxim that information is power needs to apply to the
use of big data. For a long time, most business organizations have
relied on humans to analyze data, interpret it, and make crucial
decisions. Companies have also incurred large sums of money to train
employees or even hire employees with the necessary skills to gather
information in order for businesses to develop strategies. On the same
note, some businesses or companies send their employees overseas to
learn about the trends of consumers or potential clients in the foreign
countries, and it is quite common currently to hear about the
importance of understanding the diverse cultures around the globe, as
well as buying habits of people from the diverse cultures. However,
most of these aspects can be learned using computer algorithms,
developed and interpreted by Artificial Intelligence (AI) systems. To
be precise, the AI systems can make various inferences from the big
data, which most business organizations are ignoring or depending on
third parties to manage..
AI is a novel concept that refers to automated technological systems,
which are used in diverse aspects to make operations easier, as well as
to improve the outcomes of various processes. In this context, the
analysis will only focus on the use of AI systems in the management
of the massive volume of information generated currently in the
business environment to foster innovation and develop a strategy.
Although human beings are still important in the operation of
businesses, and it is also not expected that AI systems will replace
humans entirely, the volume of information generated in the modern
business environment cannot be managed and interpreted by human
beings easily (Soni et al., 2019 p.11). Therefore, the use of AI systems
will make the interpretation of this information easier, and
consequently facilitate the innovation and strategy development
process..
Analysis
Definition
According to De Mauro (2015), artificial intelligence refers to “the
ability of a machine to learn from experience and perform tasks
normally attributed to human intelligence, for example, problem-
solving, reasoning, and understanding natural language” (98). In the
context of business information, the application of AI would refer to
the ability of these machines to perceive the big data, analyze this
data, and make specific inferences from it..
PESTEL Analysis
This section mainly describes the various factors that may affect the
adoption of artificial intelligence in the management of information
and the development of strategy in business by a business.
Conventionally, PESTEL illuminates political, Economic, Social,
Technological, Environmental, and Legal factors that may affect the
operation of a business. In this context, these factors focus on how AI
technologies may be affected in business..
Political factors
The political factors that may affect the adoption of AI systems are
quite diverse. The first factor concerns the level of political stability.
Before a company decides to invest in a particular country, they need
to ensure that the environment is conducive for business operations. If
a company cannot operate or set up business in a particular region of
the globe, it means that the development of AI systems will not be
realized. Since this essay focuses on the opportunities offered by the
development and use of various AI tools in business, an unstable
political environment implies that the tools could not be used
altogether. A politically unstable market or country also affects the
collection of information. When people are displaced or do not have
predictive buying patterns, then such a group of people forms an
unreliable market, and it is a waste of time for a business to focus its
resources on such a market. Closely related to political stability is the
integrity of politicians, and their likelihood to engage in acts of
corruption. The consequences could be possible impeachments or
resignations of high-level government employees who may be quite
skillful. If such employees resign and could be knowledgeable in the
implementation of various AI systems, then their penetration could be
derailed..
Another political factor relates to the various policies that the
government creates in relation to business operations. For example,
most countries in the Arab world, or precisely, Muslim countries have
policies on the sale and purchase of alcohol. Indeed, companies that
deal with the sale of alcohol may not find the use of AI systems to
manage and analyze information not very useful in such countries.
Perhaps the most prominent political policies that may hinder the
penetration and use of AI tools in business are those concerning the
penetration of the internet, especially social media. In the current
world, many companies have taken advantage of the internet, and
social media, in particular, to advertise their products, monitor
consumer trends, and predict their purchase trends. However, some
oppressive regimes prohibit the use of certain technologies. A good
example is a country such as North Korea that does not allow the
public to use the internet or to get connected to networks that have a
global reach. Therefore, such countries present an impediment to
access to information and the use of AI technologies to analyze
information..
The proper political aspect that favors the use of AI tools in business
is the rapid pace at which many countries are embracing technology.
Currently, most developing countries in Africa, Asia, and South
America have social media networks, and various leaders do not feel
much threatened with people interacting on these sites. On the same
note, countries are also investing heavily in the development and
proliferation of technology. The objective of such a massive
investment is that technology will create efficiency and improve
people’s access to critical information. A continent like Africa, which
for a long time, has been perceived to be backward currently is
involved in efforts to increase internet penetration. According to a
study, there are more than 525 million internet users in Africa
(Ngesah, 2005, p.11). Such statistics represent crucial information to
companies that seek to expand their operations to Africa, for instance..
Through the use of AI data analysis tools, business organizations can
analyze the demographic composition of these users, the amount of
time they take on the internet, as well as the kind of information these
people search on the internet. These people could search for
information related to various products. AI tools in business are
designed to gather such information (the type of products people such,
as well as their preferences). The most important issue here is that as
governments throughout the world continue to allow internet
penetration and other innovations related to technology spread, AI
systems gain much prominence because companies get access to more
information as a consequence of the large number of people accessing
the internet..
Economic factors
One of the factors that affect the use of AI tools in any country relates
to the economic system in operation. For instance, a monopolistic
economic system may discourage the use of AI tools in business
information management and strategy development. A country like
North Korea has the state running almost all businesses. One of the
industries most affected is the media industry because the state
controls all information that people receive. A company using AI tools
in such an industry would have analyzed information such as the
number of viewers, as well as, their demographics. Consequently, that
information would have been used to innovate and develop a strategy
aimed at appealing to the target market. However, in industries that
have monopolies, it is challenging to use AI tools to analyze
information because entry into the industry is restricted..
Nevertheless, most markets in the current world are liberal, and
virtually in almost every venture, there is competition. Competition
makes the use of AI tools very necessary because businesses will
inevitably try to analyze the market and become innovative to outdo
one another. Therefore, the growth of AI tools will be exacerbated by
a challenge; stiff competition (Kok et al., 2009 p.1). Businesses will
need to analyze important information about consumers in order to
take them customer-specific adverts or make products that are tailored
towards solving their needs. Additionally, an essential economic
factor relates to the GDP of a country, and the measures the economic
development of a country. While AI tools seem to be more suitable in
developed countries such as the United States, and a majority of those
in Europe, developing countries in Africa, Asia, and South America
are also expanding their economies, and with the improvement in
people’s standards of living, their purchase power also rises.
Therefore, AI tools in business will focus on diverse markets
throughout the whole world, and the data generated will help decide
where to invest and what to invest..
Social factors
According to Noonan and Piatt (2015), the demographics of a
population, which means the respective genders and ages of a
population, primarily affects the decision whether a product may be
marketed to the population. For example, makeup products are mostly
targeted to women, and that means people using AI tools to project
purchase trends for such products will mainly focus on women.
Secondly, the class distribution among a certain population will also
be important in developing AI tools that generate information and
foster innovation of products, which are directed at the different
classes. For example, in the United States, Wal-Mart mainly focuses
on the low-income earners, while a retail store such as Costco focuses
on the affluent (Marcilla, 2014 p.6). Therefore, in terms of targeting,
these two retail stores collect different information using various AI
tools. The last crucial social factor is the education level of various
consumers. Most educated people have embraced technology and
could prefer convenience over other hustles. For example, most
educated people live in urban centers, are likely to use Uber car
services, may order products online, and have them delivered to their
doorsteps..
Looking at the opportunities of the various social factors, it is
important to start with a demographic factor such as age. Young
people seem to have embraced technology more compared to adults,
and for developing countries, especially in Africa, young people form
the majority of the population. Since young people are more
technology-savvy, this shows the potential of the use of AI tools to
analyze this market in the form of consumption trends, attitudes,
preferences, and styles (Al-Zahrani and Marghalani, 2018 p.2).
Secondly, most people continue to be educated even in the poorest
countries, and subsequently, there is a general trend of rural-urban
migration. Most people migrate from rural areas to search for better
opportunities (education, employment, social amenities) in urban
areas. Since people in urban areas are likely to embrace technology, it
means that the population using technology is increasing rapidly.
These people will need to travel within the urban centers, eat-in cafes
or restaurants, purchase home items, and even clothes. Evidently,
continued urbanization, and embrace of technology is going to
increase the use of AI tools to analyze information about consumers..
Technological factors
It is possible to argue that AI has developed and continues to gain
prominence because the rapid advancement of technology. Firstly, it is
already mentioned that big data has necessitated businesses or
companies to develop AI tools to analyze, interpret, and make certain
inferences from the massive chunk of information. Big data has
emerged because most information is converted from analog forms to
a form that can be stored and interpreted by machines. With the
emergence of smartphones, people access a variety of information
about products, places, people, among other things. Mobile phone
manufacturing companies such as Apple and Microsoft are competing
incessantly to make superior models to woe their target customers.
Young people are mostly targeted because they are more technology-
savvy..
Far from computers and mobile phones, social media companies such
as Facebook, YouTube, Twitter, and Instagram have grown, and all
these sites have taken advantage of the enormous social media
subscriptions to advertise various products. According to Noonan and
Piatt (2015), there are more than 3.8 billion social media users in the
world. Consequently, many companies continue to explore these
channels to advertise their products. These companies not only focus
on selling their products but also by developing AI tools, which
analyze the number of people that visit their social media pages, the
kind of products they search, as well as how long they last on those
pages. The analysis of this information is not meant for storage; the
companies use it to innovate and develop a strategy. The most
important thing is that with increasing population and the penetration
of technology across communities all over the world, the number of
social media users will increase, and apart from using the sites for
advertising, companies will need to develop strategies using analysis
of various AI tools..
Environmental factors
Climate change currently is a significant concern throughout the
world. The media has become more vocal on the issue, and
consequently, more people are becoming conscious about their
environment. The increased awareness poses a significant challenge,
especially to businesses that do not observe various environmental
conservation measures. Even when such businesses use AI tools to try
and appeal to the target market, consumers may be influenced by
activists to boycott the products of companies that do not adhere to the
stipulated measures. A company such as Volkswagen was forced to
withdraw thousands of cars from the global market because of
excessive emission of fumes, and that resulted in the loss of millions
of dollars (Glikson et al., 2019 p.223). Various environmental
conservation organizations have toughened regulations on production
processes, and such stringent policies may affect how organizations
conduct business, and subsequently use various AI tools..
The various environmental concerns and regulations imply that
businesses, which adhere to the stipulated measures and are conscious
of their production and operations may witness high customer traffic,
which will consequently necessitate the use of AI tools to gather
important information and develop strategies that address their needs.
However, there is also competition among companies to try and meet
various environmental conservation obligations to get access to this
environmentally conscious market. To be able to develop various
strategies of adhering to the environmental conservation stipulations,
businesses need to collect information about various environmental
trends using AI tools, and that means that with increased awareness,
businesses will have to change their strategies continuously..
Legal factors
The first legal aspect that continues to shape the use of AI tools in
business is the creation and enforcement of intellectual property laws.
Various companies develop various AI tools, and business
organizations need to purchase them or seek permission before using
them. On the other hand, various business organizations need to hire
individuals with the necessary knowledge and skills to develop the AI
tools needed to manage information and develop a strategy. Therefore,
it is evident that the breach of the stipulated laws concerning patents,
copyrights, and other forms of intellectual property can be very costly
for businesses in terms of financial penalties, as well as the time lost
in legal battles. Most of the time, businesses involved in the
technology sector have been having legal tussles over copyright
issues, especially companies such as Microsoft and Apple..
The legal environment can also be viewed in a positive light,
especially concerning intellectual property. The stringent measures
that are meant to protect individuals, businesses, and organizations
from third-party unauthorized use of their AI tools for information
management ensure that these businesses benefit from their
innovations. Therefore, the legal environment has and continues to
help the growth of AI systems through the protection of people’s ideas
through punishing individuals who steal these ideas and use them for
personal gain. With robust legal systems, there is immense
opportunity in the development and use of AI tools in business in the
management of big data and the development of essential inferences
from it..
However, there may also be legal restrictions on the type of data or
information business entities collect about their target customers. The
United States Congress has variously summoned the management of
Facebook over allegations of data breaches. The biggest issue was
about the 2016 presidential elections, where Facebook was accused of
letting third parties have access to confidential information on their
users. The information collected was used to develop targeted
campaign messages that were designed to give a particular candidate
some leverage in the elections (Fuller, 2019, p.14). Although the
sending of targeted messages shows the potential of AI tools in
business information management and strategy developed, several
ethical issues are also raised. The most prominent ethical issue is that
some individuals may use personal information for other intentions far
from the business objectives. Some individuals within the business
organizations may be malicious and sometimes may collude with third
parties to intrude on the privacy of their customers. Therefore, most
countries have developed strict laws surrounding the protection of
sensitive customer information, and when any breaches occur,
business organizations may have to incur high financial penalties.
Therefore, it is essential for business organizations to be very cautious
on who accesses the information, and what measures they need to put
in place to protect the sensitive information..
Recommendations
Amazon was one of the first companies to use AI tools to drive its
product recommendations. Therefore, Amazon serves as a model
company in analyzing the potential of AI tools, especially in the
management of information, and how that information can be used to
boost business growth. Firstly, Amazon started purely as a bookselling
business but has rapidly grown to include many products, and at the
moment, it rivals large retail stores such as Wal-Mart. One interesting
thing about Amazon is that its business model is purely online.
Customers order various products online, and through the superior
delivery system, the company delivers the products to the doorsteps of
the customers. Amazon enjoys about 49 percent of the United States’
e-commerce market (Donici et al., 2012, p.1)). Such a share shows
that Amazon is the leading online retailer in the United States..
The success of Amazon’s e-commerce sector is mainly because of
how the company manages information using various AI tools.
According to Donici et al., (2012), Amazon takes data analysis of their
customers seriously. For instance, whenever a customer clicks on a
product but does not purchase it, such information is collected to
establish the reason it was not purchased. Based on such information,
the company develops a strategy to make the products more appealing
to the customers, and consequently influence them to purchase the
products (Donici et al., 2012 p.2). Artificial intelligence tools are also
used at Amazon to predict customer behavior and patterns. Whenever
a customer clicks on the Amazon application, they are likely to see a
list of suggestions of items. This list is usually compiled by the
various AI tools based on their previous purchase behaviors, and that
makes it easy for the customers to spot products and for the company
to influence the customers to purchase their products..
Based on Amazon’s success, various recommendations can be made.
Firstly, owing to the potential of AI tools in the business currently and
in the future, it is important for business organizations to adopt AI
tools that focus on analyzing information and increasing their sales.
Crucial information to be collected by such tools should be about
consumer preferences and habits. Once these aspects are known, the
AI tools can synthesize the information and suggest products to
customers that are commensurate with their preferences. Secondly, AI
tools in business should be developed with the analysis of
demographics in mind. Demographics are essential in understanding
population trends and composition. In such a case, the AI tools should
be able to generate data about the emerging markets, as well as those
which could probably be on the decline. That means AI tools need to
help a business avoid certain risks and, at the same time, explore
potential markets..
Thirdly, business organizations need to embrace technology more to
be able to enjoy the use of various AI tools. Businesses that still have
not digitized are missing out on the potential of AI tools in
synthesizing information and helping them to develop a strategy.
When businesses digitize, they get access to a lot of information. For
instance, potential customers will start visiting their sites. When AI
tools are embedded in these sites, businesses will learn about the
habits of consumers, and consequently, develop products that suit
them. Fourthly, it is important for businesses to operate within the
existing legal framework to enjoy the benefits of AI tools. While AI
tools offer limitless potential in innovation and strategy development,
wrong use can also put a business into trouble. It is necessary to avoid
confidential data breaches, and that calls for strict data protection
measures. The last recommendation is that businesses need to focus
on emerging markets with huge populations and high technology
penetration. These populations represent potential markets, and since
the penetration of technology means that people have acquired various
devices such as computers and smartphones, and can access the
internet, these are attractive markets for AI tools. The AI tools will
analyze various factors, and make certain inferences that will help the
specific businesses to develop strategy, innovate, and gain leverage in
their respective industries.
One of the opportunities most business organizations are missing from
is that this huge volume of data can be put to good use in the aspects
of analysis, prediction, and, ultimately, the development of essential
solutions. The maxim that information is power needs to apply to the
use of big data. For a long time, most business organizations have
relied on humans to analyze data, interpret it, and make crucial
decisions. Companies have also incurred large sums of money to train
employees or even hire employees with the necessary skills to gather
information in order for businesses to develop strategies. On the same
note, some businesses or companies send their employees overseas to
learn about the trends of consumers or potential clients in the foreign
countries, and it is quite common currently to hear about the
importance of understanding the diverse cultures around the globe, as
well as buying habits of people from the diverse cultures. However,
most of these aspects can be learned using computer algorithms,
developed and interpreted by Artificial Intelligence (AI) systems. To
be precise, the AI systems can make various inferences from the big
data, which most business organizations are ignoring or depending on
third parties to manage..
AI is a novel concept that refers to automated technological systems,
which are used in diverse aspects to make operations easier, as well as
to improve the outcomes of various processes. In this context, the
analysis will only focus on the use of AI systems in the management
of the massive volume of information generated currently in the
business environment to foster innovation and develop a strategy.
Although human beings are still important in the operation of
businesses, and it is also not expected that AI systems will replace
humans entirely, the volume of information generated in the modern
business environment cannot be managed and interpreted by human
beings easily (Soni et al., 2019 p.11). Therefore, the use of AI systems
will make the interpretation of this information easier, and
consequently facilitate the innovation and strategy development
process..
Analysis
Definition
According to De Mauro (2015), artificial intelligence refers to “the
ability of a machine to learn from experience and perform tasks
normally attributed to human intelligence, for example, problem-
solving, reasoning, and understanding natural language” (98). In the
context of business information, the application of AI would refer to
the ability of these machines to perceive the big data, analyze this
data, and make specific inferences from it..
PESTEL Analysis
This section mainly describes the various factors that may affect the
adoption of artificial intelligence in the management of information
and the development of strategy in business by a business.
Conventionally, PESTEL illuminates political, Economic, Social,
Technological, Environmental, and Legal factors that may affect the
operation of a business. In this context, these factors focus on how AI
technologies may be affected in business..
Political factors
The political factors that may affect the adoption of AI systems are
quite diverse. The first factor concerns the level of political stability.
Before a company decides to invest in a particular country, they need
to ensure that the environment is conducive for business operations. If
a company cannot operate or set up business in a particular region of
the globe, it means that the development of AI systems will not be
realized. Since this essay focuses on the opportunities offered by the
development and use of various AI tools in business, an unstable
political environment implies that the tools could not be used
altogether. A politically unstable market or country also affects the
collection of information. When people are displaced or do not have
predictive buying patterns, then such a group of people forms an
unreliable market, and it is a waste of time for a business to focus its
resources on such a market. Closely related to political stability is the
integrity of politicians, and their likelihood to engage in acts of
corruption. The consequences could be possible impeachments or
resignations of high-level government employees who may be quite
skillful. If such employees resign and could be knowledgeable in the
implementation of various AI systems, then their penetration could be
derailed..
Another political factor relates to the various policies that the
government creates in relation to business operations. For example,
most countries in the Arab world, or precisely, Muslim countries have
policies on the sale and purchase of alcohol. Indeed, companies that
deal with the sale of alcohol may not find the use of AI systems to
manage and analyze information not very useful in such countries.
Perhaps the most prominent political policies that may hinder the
penetration and use of AI tools in business are those concerning the
penetration of the internet, especially social media. In the current
world, many companies have taken advantage of the internet, and
social media, in particular, to advertise their products, monitor
consumer trends, and predict their purchase trends. However, some
oppressive regimes prohibit the use of certain technologies. A good
example is a country such as North Korea that does not allow the
public to use the internet or to get connected to networks that have a
global reach. Therefore, such countries present an impediment to
access to information and the use of AI technologies to analyze
information..
The proper political aspect that favors the use of AI tools in business
is the rapid pace at which many countries are embracing technology.
Currently, most developing countries in Africa, Asia, and South
America have social media networks, and various leaders do not feel
much threatened with people interacting on these sites. On the same
note, countries are also investing heavily in the development and
proliferation of technology. The objective of such a massive
investment is that technology will create efficiency and improve
people’s access to critical information. A continent like Africa, which
for a long time, has been perceived to be backward currently is
involved in efforts to increase internet penetration. According to a
study, there are more than 525 million internet users in Africa
(Ngesah, 2005, p.11). Such statistics represent crucial information to
companies that seek to expand their operations to Africa, for instance..
Through the use of AI data analysis tools, business organizations can
analyze the demographic composition of these users, the amount of
time they take on the internet, as well as the kind of information these
people search on the internet. These people could search for
information related to various products. AI tools in business are
designed to gather such information (the type of products people such,
as well as their preferences). The most important issue here is that as
governments throughout the world continue to allow internet
penetration and other innovations related to technology spread, AI
systems gain much prominence because companies get access to more
information as a consequence of the large number of people accessing
the internet..
Economic factors
One of the factors that affect the use of AI tools in any country relates
to the economic system in operation. For instance, a monopolistic
economic system may discourage the use of AI tools in business
information management and strategy development. A country like
North Korea has the state running almost all businesses. One of the
industries most affected is the media industry because the state
controls all information that people receive. A company using AI tools
in such an industry would have analyzed information such as the
number of viewers, as well as, their demographics. Consequently, that
information would have been used to innovate and develop a strategy
aimed at appealing to the target market. However, in industries that
have monopolies, it is challenging to use AI tools to analyze
information because entry into the industry is restricted..
Nevertheless, most markets in the current world are liberal, and
virtually in almost every venture, there is competition. Competition
makes the use of AI tools very necessary because businesses will
inevitably try to analyze the market and become innovative to outdo
one another. Therefore, the growth of AI tools will be exacerbated by
a challenge; stiff competition (Kok et al., 2009 p.1). Businesses will
need to analyze important information about consumers in order to
take them customer-specific adverts or make products that are tailored
towards solving their needs. Additionally, an essential economic
factor relates to the GDP of a country, and the measures the economic
development of a country. While AI tools seem to be more suitable in
developed countries such as the United States, and a majority of those
in Europe, developing countries in Africa, Asia, and South America
are also expanding their economies, and with the improvement in
people’s standards of living, their purchase power also rises.
Therefore, AI tools in business will focus on diverse markets
throughout the whole world, and the data generated will help decide
where to invest and what to invest..
Social factors
According to Noonan and Piatt (2015), the demographics of a
population, which means the respective genders and ages of a
population, primarily affects the decision whether a product may be
marketed to the population. For example, makeup products are mostly
targeted to women, and that means people using AI tools to project
purchase trends for such products will mainly focus on women.
Secondly, the class distribution among a certain population will also
be important in developing AI tools that generate information and
foster innovation of products, which are directed at the different
classes. For example, in the United States, Wal-Mart mainly focuses
on the low-income earners, while a retail store such as Costco focuses
on the affluent (Marcilla, 2014 p.6). Therefore, in terms of targeting,
these two retail stores collect different information using various AI
tools. The last crucial social factor is the education level of various
consumers. Most educated people have embraced technology and
could prefer convenience over other hustles. For example, most
educated people live in urban centers, are likely to use Uber car
services, may order products online, and have them delivered to their
doorsteps..
Looking at the opportunities of the various social factors, it is
important to start with a demographic factor such as age. Young
people seem to have embraced technology more compared to adults,
and for developing countries, especially in Africa, young people form
the majority of the population. Since young people are more
technology-savvy, this shows the potential of the use of AI tools to
analyze this market in the form of consumption trends, attitudes,
preferences, and styles (Al-Zahrani and Marghalani, 2018 p.2).
Secondly, most people continue to be educated even in the poorest
countries, and subsequently, there is a general trend of rural-urban
migration. Most people migrate from rural areas to search for better
opportunities (education, employment, social amenities) in urban
areas. Since people in urban areas are likely to embrace technology, it
means that the population using technology is increasing rapidly.
These people will need to travel within the urban centers, eat-in cafes
or restaurants, purchase home items, and even clothes. Evidently,
continued urbanization, and embrace of technology is going to
increase the use of AI tools to analyze information about consumers..
Technological factors
It is possible to argue that AI has developed and continues to gain
prominence because the rapid advancement of technology. Firstly, it is
already mentioned that big data has necessitated businesses or
companies to develop AI tools to analyze, interpret, and make certain
inferences from the massive chunk of information. Big data has
emerged because most information is converted from analog forms to
a form that can be stored and interpreted by machines. With the
emergence of smartphones, people access a variety of information
about products, places, people, among other things. Mobile phone
manufacturing companies such as Apple and Microsoft are competing
incessantly to make superior models to woe their target customers.
Young people are mostly targeted because they are more technology-
savvy..
Far from computers and mobile phones, social media companies such
as Facebook, YouTube, Twitter, and Instagram have grown, and all
these sites have taken advantage of the enormous social media
subscriptions to advertise various products. According to Noonan and
Piatt (2015), there are more than 3.8 billion social media users in the
world. Consequently, many companies continue to explore these
channels to advertise their products. These companies not only focus
on selling their products but also by developing AI tools, which
analyze the number of people that visit their social media pages, the
kind of products they search, as well as how long they last on those
pages. The analysis of this information is not meant for storage; the
companies use it to innovate and develop a strategy. The most
important thing is that with increasing population and the penetration
of technology across communities all over the world, the number of
social media users will increase, and apart from using the sites for
advertising, companies will need to develop strategies using analysis
of various AI tools..
Environmental factors
Climate change currently is a significant concern throughout the
world. The media has become more vocal on the issue, and
consequently, more people are becoming conscious about their
environment. The increased awareness poses a significant challenge,
especially to businesses that do not observe various environmental
conservation measures. Even when such businesses use AI tools to try
and appeal to the target market, consumers may be influenced by
activists to boycott the products of companies that do not adhere to the
stipulated measures. A company such as Volkswagen was forced to
withdraw thousands of cars from the global market because of
excessive emission of fumes, and that resulted in the loss of millions
of dollars (Glikson et al., 2019 p.223). Various environmental
conservation organizations have toughened regulations on production
processes, and such stringent policies may affect how organizations
conduct business, and subsequently use various AI tools..
The various environmental concerns and regulations imply that
businesses, which adhere to the stipulated measures and are conscious
of their production and operations may witness high customer traffic,
which will consequently necessitate the use of AI tools to gather
important information and develop strategies that address their needs.
However, there is also competition among companies to try and meet
various environmental conservation obligations to get access to this
environmentally conscious market. To be able to develop various
strategies of adhering to the environmental conservation stipulations,
businesses need to collect information about various environmental
trends using AI tools, and that means that with increased awareness,
businesses will have to change their strategies continuously..
Legal factors
The first legal aspect that continues to shape the use of AI tools in
business is the creation and enforcement of intellectual property laws.
Various companies develop various AI tools, and business
organizations need to purchase them or seek permission before using
them. On the other hand, various business organizations need to hire
individuals with the necessary knowledge and skills to develop the AI
tools needed to manage information and develop a strategy. Therefore,
it is evident that the breach of the stipulated laws concerning patents,
copyrights, and other forms of intellectual property can be very costly
for businesses in terms of financial penalties, as well as the time lost
in legal battles. Most of the time, businesses involved in the
technology sector have been having legal tussles over copyright
issues, especially companies such as Microsoft and Apple..
The legal environment can also be viewed in a positive light,
especially concerning intellectual property. The stringent measures
that are meant to protect individuals, businesses, and organizations
from third-party unauthorized use of their AI tools for information
management ensure that these businesses benefit from their
innovations. Therefore, the legal environment has and continues to
help the growth of AI systems through the protection of people’s ideas
through punishing individuals who steal these ideas and use them for
personal gain. With robust legal systems, there is immense
opportunity in the development and use of AI tools in business in the
management of big data and the development of essential inferences
from it..
However, there may also be legal restrictions on the type of data or
information business entities collect about their target customers. The
United States Congress has variously summoned the management of
Facebook over allegations of data breaches. The biggest issue was
about the 2016 presidential elections, where Facebook was accused of
letting third parties have access to confidential information on their
users. The information collected was used to develop targeted
campaign messages that were designed to give a particular candidate
some leverage in the elections (Fuller, 2019, p.14). Although the
sending of targeted messages shows the potential of AI tools in
business information management and strategy developed, several
ethical issues are also raised. The most prominent ethical issue is that
some individuals may use personal information for other intentions far
from the business objectives. Some individuals within the business
organizations may be malicious and sometimes may collude with third
parties to intrude on the privacy of their customers. Therefore, most
countries have developed strict laws surrounding the protection of
sensitive customer information, and when any breaches occur,
business organizations may have to incur high financial penalties.
Therefore, it is essential for business organizations to be very cautious
on who accesses the information, and what measures they need to put
in place to protect the sensitive information..
Recommendations
Amazon was one of the first companies to use AI tools to drive its
product recommendations. Therefore, Amazon serves as a model
company in analyzing the potential of AI tools, especially in the
management of information, and how that information can be used to
boost business growth. Firstly, Amazon started purely as a bookselling
business but has rapidly grown to include many products, and at the
moment, it rivals large retail stores such as Wal-Mart. One interesting
thing about Amazon is that its business model is purely online.
Customers order various products online, and through the superior
delivery system, the company delivers the products to the doorsteps of
the customers. Amazon enjoys about 49 percent of the United States’
e-commerce market (Donici et al., 2012, p.1)). Such a share shows
that Amazon is the leading online retailer in the United States..
The success of Amazon’s e-commerce sector is mainly because of
how the company manages information using various AI tools.
According to Donici et al., (2012), Amazon takes data analysis of their
customers seriously. For instance, whenever a customer clicks on a
product but does not purchase it, such information is collected to
establish the reason it was not purchased. Based on such information,
the company develops a strategy to make the products more appealing
to the customers, and consequently influence them to purchase the
products (Donici et al., 2012 p.2). Artificial intelligence tools are also
used at Amazon to predict customer behavior and patterns. Whenever
a customer clicks on the Amazon application, they are likely to see a
list of suggestions of items. This list is usually compiled by the
various AI tools based on their previous purchase behaviors, and that
makes it easy for the customers to spot products and for the company
to influence the customers to purchase their products..
Based on Amazon’s success, various recommendations can be made.
Firstly, owing to the potential of AI tools in the business currently and
in the future, it is important for business organizations to adopt AI
tools that focus on analyzing information and increasing their sales.
Crucial information to be collected by such tools should be about
consumer preferences and habits. Once these aspects are known, the
AI tools can synthesize the information and suggest products to
customers that are commensurate with their preferences. Secondly, AI
tools in business should be developed with the analysis of
demographics in mind. Demographics are essential in understanding
population trends and composition. In such a case, the AI tools should
be able to generate data about the emerging markets, as well as those
which could probably be on the decline. That means AI tools need to
help a business avoid certain risks and, at the same time, explore
potential markets..
Thirdly, business organizations need to embrace technology more to
be able to enjoy the use of various AI tools. Businesses that still have
not digitized are missing out on the potential of AI tools in
synthesizing information and helping them to develop a strategy.
When businesses digitize, they get access to a lot of information. For
instance, potential customers will start visiting their sites. When AI
tools are embedded in these sites, businesses will learn about the
habits of consumers, and consequently, develop products that suit
them. Fourthly, it is important for businesses to operate within the
existing legal framework to enjoy the benefits of AI tools. While AI
tools offer limitless potential in innovation and strategy development,
wrong use can also put a business into trouble. It is necessary to avoid
confidential data breaches, and that calls for strict data protection
measures. The last recommendation is that businesses need to focus
on emerging markets with huge populations and high technology
penetration. These populations represent potential markets, and since
the penetration of technology means that people have acquired various
devices such as computers and smartphones, and can access the
internet, these are attractive markets for AI tools. The AI tools will
analyze various factors, and make certain inferences that will help the
specific businesses to develop strategy, innovate, and gain leverage in
their respective industries.
One of the opportunities most business organizations are missing from
is that this huge volume of data can be put to good use in the aspects
of analysis, prediction, and, ultimately, the development of essential
solutions. The maxim that information is power needs to apply to the
use of big data. For a long time, most business organizations have
relied on humans to analyze data, interpret it, and make crucial
decisions. Companies have also incurred large sums of money to train
employees or even hire employees with the necessary skills to gather
information in order for businesses to develop strategies. On the same
note, some businesses or companies send their employees overseas to
learn about the trends of consumers or potential clients in the foreign
countries, and it is quite common currently to hear about the
importance of understanding the diverse cultures around the globe, as
well as buying habits of people from the diverse cultures. However,
most of these aspects can be learned using computer algorithms,
developed and interpreted by Artificial Intelligence (AI) systems. To
be precise, the AI systems can make various inferences from the big
data, which most business organizations are ignoring or depending on
third parties to manage..
AI is a novel concept that refers to automated technological systems,
which are used in diverse aspects to make operations easier, as well as
to improve the outcomes of various processes. In this context, the
analysis will only focus on the use of AI systems in the management
of the massive volume of information generated currently in the
business environment to foster innovation and develop a strategy.
Although human beings are still important in the operation of
businesses, and it is also not expected that AI systems will replace
humans entirely, the volume of information generated in the modern
business environment cannot be managed and interpreted by human
beings easily (Soni et al., 2019 p.11). Therefore, the use of AI systems
will make the interpretation of this information easier, and
consequently facilitate the innovation and strategy development
process..
Analysis
Definition
According to De Mauro (2015), artificial intelligence refers to “the
ability of a machine to learn from experience and perform tasks
normally attributed to human intelligence, for example, problem-
solving, reasoning, and understanding natural language” (98). In the
context of business information, the application of AI would refer to
the ability of these machines to perceive the big data, analyze this
data, and make specific inferences from it..
PESTEL Analysis
This section mainly describes the various factors that may affect the
adoption of artificial intelligence in the management of information
and the development of strategy in business by a business.
Conventionally, PESTEL illuminates political, Economic, Social,
Technological, Environmental, and Legal factors that may affect the
operation of a business. In this context, these factors focus on how AI
technologies may be affected in business..
Political factors
The political factors that may affect the adoption of AI systems are
quite diverse. The first factor concerns the level of political stability.
Before a company decides to invest in a particular country, they need
to ensure that the environment is conducive for business operations. If
a company cannot operate or set up business in a particular region of
the globe, it means that the development of AI systems will not be
realized. Since this essay focuses on the opportunities offered by the
development and use of various AI tools in business, an unstable
political environment implies that the tools could not be used
altogether. A politically unstable market or country also affects the
collection of information. When people are displaced or do not have
predictive buying patterns, then such a group of people forms an
unreliable market, and it is a waste of time for a business to focus its
resources on such a market. Closely related to political stability is the
integrity of politicians, and their likelihood to engage in acts of
corruption. The consequences could be possible impeachments or
resignations of high-level government employees who may be quite
skillful. If such employees resign and could be knowledgeable in the
implementation of various AI systems, then their penetration could be
derailed..
Another political factor relates to the various policies that the
government creates in relation to business operations. For example,
most countries in the Arab world, or precisely, Muslim countries have
policies on the sale and purchase of alcohol. Indeed, companies that
deal with the sale of alcohol may not find the use of AI systems to
manage and analyze information not very useful in such countries.
Perhaps the most prominent political policies that may hinder the
penetration and use of AI tools in business are those concerning the
penetration of the internet, especially social media. In the current
world, many companies have taken advantage of the internet, and
social media, in particular, to advertise their products, monitor
consumer trends, and predict their purchase trends. However, some
oppressive regimes prohibit the use of certain technologies. A good
example is a country such as North Korea that does not allow the
public to use the internet or to get connected to networks that have a
global reach. Therefore, such countries present an impediment to
access to information and the use of AI technologies to analyze
information..
The proper political aspect that favors the use of AI tools in business
is the rapid pace at which many countries are embracing technology.
Currently, most developing countries in Africa, Asia, and South
America have social media networks, and various leaders do not feel
much threatened with people interacting on these sites. On the same
note, countries are also investing heavily in the development and
proliferation of technology. The objective of such a massive
investment is that technology will create efficiency and improve
people’s access to critical information. A continent like Africa, which
for a long time, has been perceived to be backward currently is
involved in efforts to increase internet penetration. According to a
study, there are more than 525 million internet users in Africa
(Ngesah, 2005, p.11). Such statistics represent crucial information to
companies that seek to expand their operations to Africa, for instance..
Through the use of AI data analysis tools, business organizations can
analyze the demographic composition of these users, the amount of
time they take on the internet, as well as the kind of information these
people search on the internet. These people could search for
information related to various products. AI tools in business are
designed to gather such information (the type of products people such,
as well as their preferences). The most important issue here is that as
governments throughout the world continue to allow internet
penetration and other innovations related to technology spread, AI
systems gain much prominence because companies get access to more
information as a consequence of the large number of people accessing
the internet..
Economic factors
One of the factors that affect the use of AI tools in any country relates
to the economic system in operation. For instance, a monopolistic
economic system may discourage the use of AI tools in business
information management and strategy development. A country like
North Korea has the state running almost all businesses. One of the
industries most affected is the media industry because the state
controls all information that people receive. A company using AI tools
in such an industry would have analyzed information such as the
number of viewers, as well as, their demographics. Consequently, that
information would have been used to innovate and develop a strategy
aimed at appealing to the target market. However, in industries that
have monopolies, it is challenging to use AI tools to analyze
information because entry into the industry is restricted..
Nevertheless, most markets in the current world are liberal, and
virtually in almost every venture, there is competition. Competition
makes the use of AI tools very necessary because businesses will
inevitably try to analyze the market and become innovative to outdo
one another. Therefore, the growth of AI tools will be exacerbated by
a challenge; stiff competition (Kok et al., 2009 p.1). Businesses will
need to analyze important information about consumers in order to
take them customer-specific adverts or make products that are tailored
towards solving their needs. Additionally, an essential economic
factor relates to the GDP of a country, and the measures the economic
development of a country. While AI tools seem to be more suitable in
developed countries such as the United States, and a majority of those
in Europe, developing countries in Africa, Asia, and South America
are also expanding their economies, and with the improvement in
people’s standards of living, their purchase power also rises.
Therefore, AI tools in business will focus on diverse markets
throughout the whole world, and the data generated will help decide
where to invest and what to invest..
Social factors
According to Noonan and Piatt (2015), the demographics of a
population, which means the respective genders and ages of a
population, primarily affects the decision whether a product may be
marketed to the population. For example, makeup products are mostly
targeted to women, and that means people using AI tools to project
purchase trends for such products will mainly focus on women.
Secondly, the class distribution among a certain population will also
be important in developing AI tools that generate information and
foster innovation of products, which are directed at the different
classes. For example, in the United States, Wal-Mart mainly focuses
on the low-income earners, while a retail store such as Costco focuses
on the affluent (Marcilla, 2014 p.6). Therefore, in terms of targeting,
these two retail stores collect different information using various AI
tools. The last crucial social factor is the education level of various
consumers. Most educated people have embraced technology and
could prefer convenience over other hustles. For example, most
educated people live in urban centers, are likely to use Uber car
services, may order products online, and have them delivered to their
doorsteps..
Looking at the opportunities of the various social factors, it is
important to start with a demographic factor such as age. Young
people seem to have embraced technology more compared to adults,
and for developing countries, especially in Africa, young people form
the majority of the population. Since young people are more
technology-savvy, this shows the potential of the use of AI tools to
analyze this market in the form of consumption trends, attitudes,
preferences, and styles (Al-Zahrani and Marghalani, 2018 p.2).
Secondly, most people continue to be educated even in the poorest
countries, and subsequently, there is a general trend of rural-urban
migration. Most people migrate from rural areas to search for better
opportunities (education, employment, social amenities) in urban
areas. Since people in urban areas are likely to embrace technology, it
means that the population using technology is increasing rapidly.
These people will need to travel within the urban centers, eat-in cafes
or restaurants, purchase home items, and even clothes. Evidently,
continued urbanization, and embrace of technology is going to
increase the use of AI tools to analyze information about consumers..
Technological factors
It is possible to argue that AI has developed and continues to gain
prominence because the rapid advancement of technology. Firstly, it is
already mentioned that big data has necessitated businesses or
companies to develop AI tools to analyze, interpret, and make certain
inferences from the massive chunk of information. Big data has
emerged because most information is converted from analog forms to
a form that can be stored and interpreted by machines. With the
emergence of smartphones, people access a variety of information
about products, places, people, among other things. Mobile phone
manufacturing companies such as Apple and Microsoft are competing
incessantly to make superior models to woe their target customers.
Young people are mostly targeted because they are more technology-
savvy..
Far from computers and mobile phones, social media companies such
as Facebook, YouTube, Twitter, and Instagram have grown, and all
these sites have taken advantage of the enormous social media
subscriptions to advertise various products. According to Noonan and
Piatt (2015), there are more than 3.8 billion social media users in the
world. Consequently, many companies continue to explore these
channels to advertise their products. These companies not only focus
on selling their products but also by developing AI tools, which
analyze the number of people that visit their social media pages, the
kind of products they search, as well as how long they last on those
pages. The analysis of this information is not meant for storage; the
companies use it to innovate and develop a strategy. The most
important thing is that with increasing population and the penetration
of technology across communities all over the world, the number of
social media users will increase, and apart from using the sites for
advertising, companies will need to develop strategies using analysis
of various AI tools..
Environmental factors
Climate change currently is a significant concern throughout the
world. The media has become more vocal on the issue, and
consequently, more people are becoming conscious about their
environment. The increased awareness poses a significant challenge,
especially to businesses that do not observe various environmental
conservation measures. Even when such businesses use AI tools to try
and appeal to the target market, consumers may be influenced by
activists to boycott the products of companies that do not adhere to the
stipulated measures. A company such as Volkswagen was forced to
withdraw thousands of cars from the global market because of
excessive emission of fumes, and that resulted in the loss of millions
of dollars (Glikson et al., 2019 p.223). Various environmental
conservation organizations have toughened regulations on production
processes, and such stringent policies may affect how organizations
conduct business, and subsequently use various AI tools..
The various environmental concerns and regulations imply that
businesses, which adhere to the stipulated measures and are conscious
of their production and operations may witness high customer traffic,
which will consequently necessitate the use of AI tools to gather
important information and develop strategies that address their needs.
However, there is also competition among companies to try and meet
various environmental conservation obligations to get access to this
environmentally conscious market. To be able to develop various
strategies of adhering to the environmental conservation stipulations,
businesses need to collect information about various environmental
trends using AI tools, and that means that with increased awareness,
businesses will have to change their strategies continuously..
Legal factors
The first legal aspect that continues to shape the use of AI tools in
business is the creation and enforcement of intellectual property laws.
Various companies develop various AI tools, and business
organizations need to purchase them or seek permission before using
them. On the other hand, various business organizations need to hire
individuals with the necessary knowledge and skills to develop the AI
tools needed to manage information and develop a strategy. Therefore,
it is evident that the breach of the stipulated laws concerning patents,
copyrights, and other forms of intellectual property can be very costly
for businesses in terms of financial penalties, as well as the time lost
in legal battles. Most of the time, businesses involved in the
technology sector have been having legal tussles over copyright
issues, especially companies such as Microsoft and Apple..
The legal environment can also be viewed in a positive light,
especially concerning intellectual property. The stringent measures
that are meant to protect individuals, businesses, and organizations
from third-party unauthorized use of their AI tools for information
management ensure that these businesses benefit from their
innovations. Therefore, the legal environment has and continues to
help the growth of AI systems through the protection of people’s ideas
through punishing individuals who steal these ideas and use them for
personal gain. With robust legal systems, there is immense
opportunity in the development and use of AI tools in business in the
management of big data and the development of essential inferences
from it..
However, there may also be legal restrictions on the type of data or
information business entities collect about their target customers. The
United States Congress has variously summoned the management of
Facebook over allegations of data breaches. The biggest issue was
about the 2016 presidential elections, where Facebook was accused of
letting third parties have access to confidential information on their
users. The information collected was used to develop targeted
campaign messages that were designed to give a particular candidate
some leverage in the elections (Fuller, 2019, p.14). Although the
sending of targeted messages shows the potential of AI tools in
business information management and strategy developed, several
ethical issues are also raised. The most prominent ethical issue is that
some individuals may use personal information for other intentions far
from the business objectives. Some individuals within the business
organizations may be malicious and sometimes may collude with third
parties to intrude on the privacy of their customers. Therefore, most
countries have developed strict laws surrounding the protection of
sensitive customer information, and when any breaches occur,
business organizations may have to incur high financial penalties.
Therefore, it is essential for business organizations to be very cautious
on who accesses the information, and what measures they need to put
in place to protect the sensitive information..
Recommendations
Amazon was one of the first companies to use AI tools to drive its
product recommendations. Therefore, Amazon serves as a model
company in analyzing the potential of AI tools, especially in the
management of information, and how that information can be used to
boost business growth. Firstly, Amazon started purely as a bookselling
business but has rapidly grown to include many products, and at the
moment, it rivals large retail stores such as Wal-Mart. One interesting
thing about Amazon is that its business model is purely online.
Customers order various products online, and through the superior
delivery system, the company delivers the products to the doorsteps of
the customers. Amazon enjoys about 49 percent of the United States’
e-commerce market (Donici et al., 2012, p.1)). Such a share shows
that Amazon is the leading online retailer in the United States..
The success of Amazon’s e-commerce sector is mainly because of
how the company manages information using various AI tools.
According to Donici et al., (2012), Amazon takes data analysis of their
customers seriously. For instance, whenever a customer clicks on a
product but does not purchase it, such information is collected to
establish the reason it was not purchased. Based on such information,
the company develops a strategy to make the products more appealing
to the customers, and consequently influence them to purchase the
products (Donici et al., 2012 p.2). Artificial intelligence tools are also
used at Amazon to predict customer behavior and patterns. Whenever
a customer clicks on the Amazon application, they are likely to see a
list of suggestions of items. This list is usually compiled by the
various AI tools based on their previous purchase behaviors, and that
makes it easy for the customers to spot products and for the company
to influence the customers to purchase their products..
Based on Amazon’s success, various recommendations can be made.
Firstly, owing to the potential of AI tools in the business currently and
in the future, it is important for business organizations to adopt AI
tools that focus on analyzing information and increasing their sales.
Crucial information to be collected by such tools should be about
consumer preferences and habits. Once these aspects are known, the
AI tools can synthesize the information and suggest products to
customers that are commensurate with their preferences. Secondly, AI
tools in business should be developed with the analysis of
demographics in mind. Demographics are essential in understanding
population trends and composition. In such a case, the AI tools should
be able to generate data about the emerging markets, as well as those
which could probably be on the decline. That means AI tools need to
help a business avoid certain risks and, at the same time, explore
potential markets..
Thirdly, business organizations need to embrace technology more to
be able to enjoy the use of various AI tools. Businesses that still have
not digitized are missing out on the potential of AI tools in
synthesizing information and helping them to develop a strategy.
When businesses digitize, they get access to a lot of information. For
instance, potential customers will start visiting their sites. When AI
tools are embedded in these sites, businesses will learn about the
habits of consumers, and consequently, develop products that suit
them. Fourthly, it is important for businesses to operate within the
existing legal framework to enjoy the benefits of AI tools. While AI
tools offer limitless potential in innovation and strategy development,
wrong use can also put a business into trouble. It is necessary to avoid
confidential data breaches, and that calls for strict data protection
measures. The last recommendation is that businesses need to focus
on emerging markets with huge populations and high technology
penetration. These populations represent potential markets, and since
the penetration of technology means that people have acquired various
devices such as computers and smartphones, and can access the
internet, these are attractive markets for AI tools. The AI tools will
analyze various factors, and make certain inferences that will help the
specific businesses to develop strategy, innovate, and gain leverage in
their respective industries.
One of the opportunities most business organizations are missing from
is that this huge volume of data can be put to good use in the aspects
of analysis, prediction, and, ultimately, the development of essential
solutions. The maxim that information is power needs to apply to the
use of big data. For a long time, most business organizations have
relied on humans to analyze data, interpret it, and make crucial
decisions. Companies have also incurred large sums of money to train
employees or even hire employees with the necessary skills to gather
information in order for businesses to develop strategies. On the same
note, some businesses or companies send their employees overseas to
learn about the trends of consumers or potential clients in the foreign
countries, and it is quite common currently to hear about the
importance of understanding the diverse cultures around the globe, as
well as buying habits of people from the diverse cultures. However,
most of these aspects can be learned using computer algorithms,
developed and interpreted by Artificial Intelligence (AI) systems. To
be precise, the AI systems can make various inferences from the big
data, which most business organizations are ignoring or depending on
third parties to manage..
AI is a novel concept that refers to automated technological systems,
which are used in diverse aspects to make operations easier, as well as
to improve the outcomes of various processes. In this context, the
analysis will only focus on the use of AI systems in the management
of the massive volume of information generated currently in the
business environment to foster innovation and develop a strategy.
Although human beings are still important in the operation of
businesses, and it is also not expected that AI systems will replace
humans entirely, the volume of information generated in the modern
business environment cannot be managed and interpreted by human
beings easily (Soni et al., 2019 p.11). Therefore, the use of AI systems
will make the interpretation of this information easier, and
consequently facilitate the innovation and strategy development
process..
Analysis
Definition
According to De Mauro (2015), artificial intelligence refers to “the
ability of a machine to learn from experience and perform tasks
normally attributed to human intelligence, for example, problem-
solving, reasoning, and understanding natural language” (98). In the
context of business information, the application of AI would refer to
the ability of these machines to perceive the big data, analyze this
data, and make specific inferences from it..
PESTEL Analysis
This section mainly describes the various factors that may affect the
adoption of artificial intelligence in the management of information
and the development of strategy in business by a business.
Conventionally, PESTEL illuminates political, Economic, Social,
Technological, Environmental, and Legal factors that may affect the
operation of a business. In this context, these factors focus on how AI
technologies may be affected in business..
Political factors
The political factors that may affect the adoption of AI systems are
quite diverse. The first factor concerns the level of political stability.
Before a company decides to invest in a particular country, they need
to ensure that the environment is conducive for business operations. If
a company cannot operate or set up business in a particular region of
the globe, it means that the development of AI systems will not be
realized. Since this essay focuses on the opportunities offered by the
development and use of various AI tools in business, an unstable
political environment implies that the tools could not be used
altogether. A politically unstable market or country also affects the
collection of information. When people are displaced or do not have
predictive buying patterns, then such a group of people forms an
unreliable market, and it is a waste of time for a business to focus its
resources on such a market. Closely related to political stability is the
integrity of politicians, and their likelihood to engage in acts of
corruption. The consequences could be possible impeachments or
resignations of high-level government employees who may be quite
skillful. If such employees resign and could be knowledgeable in the
implementation of various AI systems, then their penetration could be
derailed..
Another political factor relates to the various policies that the
government creates in relation to business operations. For example,
most countries in the Arab world, or precisely, Muslim countries have
policies on the sale and purchase of alcohol. Indeed, companies that
deal with the sale of alcohol may not find the use of AI systems to
manage and analyze information not very useful in such countries.
Perhaps the most prominent political policies that may hinder the
penetration and use of AI tools in business are those concerning the
penetration of the internet, especially social media. In the current
world, many companies have taken advantage of the internet, and
social media, in particular, to advertise their products, monitor
consumer trends, and predict their purchase trends. However, some
oppressive regimes prohibit the use of certain technologies. A good
example is a country such as North Korea that does not allow the
public to use the internet or to get connected to networks that have a
global reach. Therefore, such countries present an impediment to
access to information and the use of AI technologies to analyze
information..
The proper political aspect that favors the use of AI tools in business
is the rapid pace at which many countries are embracing technology.
Currently, most developing countries in Africa, Asia, and South
America have social media networks, and various leaders do not feel
much threatened with people interacting on these sites. On the same
note, countries are also investing heavily in the development and
proliferation of technology. The objective of such a massive
investment is that technology will create efficiency and improve
people’s access to critical information. A continent like Africa, which
for a long time, has been perceived to be backward currently is
involved in efforts to increase internet penetration. According to a
study, there are more than 525 million internet users in Africa
(Ngesah, 2005, p.11). Such statistics represent crucial information to
companies that seek to expand their operations to Africa, for instance..
Through the use of AI data analysis tools, business organizations can
analyze the demographic composition of these users, the amount of
time they take on the internet, as well as the kind of information these
people search on the internet. These people could search for
information related to various products. AI tools in business are
designed to gather such information (the type of products people such,
as well as their preferences). The most important issue here is that as
governments throughout the world continue to allow internet
penetration and other innovations related to technology spread, AI
systems gain much prominence because companies get access to more
information as a consequence of the large number of people accessing
the internet..
Economic factors
One of the factors that affect the use of AI tools in any country relates
to the economic system in operation. For instance, a monopolistic
economic system may discourage the use of AI tools in business
information management and strategy development. A country like
North Korea has the state running almost all businesses. One of the
industries most affected is the media industry because the state
controls all information that people receive. A company using AI tools
in such an industry would have analyzed information such as the
number of viewers, as well as, their demographics. Consequently, that
information would have been used to innovate and develop a strategy
aimed at appealing to the target market. However, in industries that
have monopolies, it is challenging to use AI tools to analyze
information because entry into the industry is restricted..
Nevertheless, most markets in the current world are liberal, and
virtually in almost every venture, there is competition. Competition
makes the use of AI tools very necessary because businesses will
inevitably try to analyze the market and become innovative to outdo
one another. Therefore, the growth of AI tools will be exacerbated by
a challenge; stiff competition (Kok et al., 2009 p.1). Businesses will
need to analyze important information about consumers in order to
take them customer-specific adverts or make products that are tailored
towards solving their needs. Additionally, an essential economic
factor relates to the GDP of a country, and the measures the economic
development of a country. While AI tools seem to be more suitable in
developed countries such as the United States, and a majority of those
in Europe, developing countries in Africa, Asia, and South America
are also expanding their economies, and with the improvement in
people’s standards of living, their purchase power also rises.
Therefore, AI tools in business will focus on diverse markets
throughout the whole world, and the data generated will help decide
where to invest and what to invest..
Social factors
According to Noonan and Piatt (2015), the demographics of a
population, which means the respective genders and ages of a
population, primarily affects the decision whether a product may be
marketed to the population. For example, makeup products are mostly
targeted to women, and that means people using AI tools to project
purchase trends for such products will mainly focus on women.
Secondly, the class distribution among a certain population will also
be important in developing AI tools that generate information and
foster innovation of products, which are directed at the different
classes. For example, in the United States, Wal-Mart mainly focuses
on the low-income earners, while a retail store such as Costco focuses
on the affluent (Marcilla, 2014 p.6). Therefore, in terms of targeting,
these two retail stores collect different information using various AI
tools. The last crucial social factor is the education level of various
consumers. Most educated people have embraced technology and
could prefer convenience over other hustles. For example, most
educated people live in urban centers, are likely to use Uber car
services, may order products online, and have them delivered to their
doorsteps..
Looking at the opportunities of the various social factors, it is
important to start with a demographic factor such as age. Young
people seem to have embraced technology more compared to adults,
and for developing countries, especially in Africa, young people form
the majority of the population. Since young people are more
technology-savvy, this shows the potential of the use of AI tools to
analyze this market in the form of consumption trends, attitudes,
preferences, and styles (Al-Zahrani and Marghalani, 2018 p.2).
Secondly, most people continue to be educated even in the poorest
countries, and subsequently, there is a general trend of rural-urban
migration. Most people migrate from rural areas to search for better
opportunities (education, employment, social amenities) in urban
areas. Since people in urban areas are likely to embrace technology, it
means that the population using technology is increasing rapidly.
These people will need to travel within the urban centers, eat-in cafes
or restaurants, purchase home items, and even clothes. Evidently,
continued urbanization, and embrace of technology is going to
increase the use of AI tools to analyze information about consumers..
Technological factors
It is possible to argue that AI has developed and continues to gain
prominence because the rapid advancement of technology. Firstly, it is
already mentioned that big data has necessitated businesses or
companies to develop AI tools to analyze, interpret, and make certain
inferences from the massive chunk of information. Big data has
emerged because most information is converted from analog forms to
a form that can be stored and interpreted by machines. With the
emergence of smartphones, people access a variety of information
about products, places, people, among other things. Mobile phone
manufacturing companies such as Apple and Microsoft are competing
incessantly to make superior models to woe their target customers.
Young people are mostly targeted because they are more technology-
savvy..
Far from computers and mobile phones, social media companies such
as Facebook, YouTube, Twitter, and Instagram have grown, and all
these sites have taken advantage of the enormous social media
subscriptions to advertise various products. According to Noonan and
Piatt (2015), there are more than 3.8 billion social media users in the
world. Consequently, many companies continue to explore these
channels to advertise their products. These companies not only focus
on selling their products but also by developing AI tools, which
analyze the number of people that visit their social media pages, the
kind of products they search, as well as how long they last on those
pages. The analysis of this information is not meant for storage; the
companies use it to innovate and develop a strategy. The most
important thing is that with increasing population and the penetration
of technology across communities all over the world, the number of
social media users will increase, and apart from using the sites for
advertising, companies will need to develop strategies using analysis
of various AI tools..
Environmental factors
Climate change currently is a significant concern throughout the
world. The media has become more vocal on the issue, and
consequently, more people are becoming conscious about their
environment. The increased awareness poses a significant challenge,
especially to businesses that do not observe various environmental
conservation measures. Even when such businesses use AI tools to try
and appeal to the target market, consumers may be influenced by
activists to boycott the products of companies that do not adhere to the
stipulated measures. A company such as Volkswagen was forced to
withdraw thousands of cars from the global market because of
excessive emission of fumes, and that resulted in the loss of millions
of dollars (Glikson et al., 2019 p.223). Various environmental
conservation organizations have toughened regulations on production
processes, and such stringent policies may affect how organizations
conduct business, and subsequently use various AI tools..
The various environmental concerns and regulations imply that
businesses, which adhere to the stipulated measures and are conscious
of their production and operations may witness high customer traffic,
which will consequently necessitate the use of AI tools to gather
important information and develop strategies that address their needs.
However, there is also competition among companies to try and meet
various environmental conservation obligations to get access to this
environmentally conscious market. To be able to develop various
strategies of adhering to the environmental conservation stipulations,
businesses need to collect information about various environmental
trends using AI tools, and that means that with increased awareness,
businesses will have to change their strategies continuously..
Legal factors
The first legal aspect that continues to shape the use of AI tools in
business is the creation and enforcement of intellectual property laws.
Various companies develop various AI tools, and business
organizations need to purchase them or seek permission before using
them. On the other hand, various business organizations need to hire
individuals with the necessary knowledge and skills to develop the AI
tools needed to manage information and develop a strategy. Therefore,
it is evident that the breach of the stipulated laws concerning patents,
copyrights, and other forms of intellectual property can be very costly
for businesses in terms of financial penalties, as well as the time lost
in legal battles. Most of the time, businesses involved in the
technology sector have been having legal tussles over copyright
issues, especially companies such as Microsoft and Apple..
The legal environment can also be viewed in a positive light,
especially concerning intellectual property. The stringent measures
that are meant to protect individuals, businesses, and organizations
from third-party unauthorized use of their AI tools for information
management ensure that these businesses benefit from their
innovations. Therefore, the legal environment has and continues to
help the growth of AI systems through the protection of people’s ideas
through punishing individuals who steal these ideas and use them for
personal gain. With robust legal systems, there is immense
opportunity in the development and use of AI tools in business in the
management of big data and the development of essential inferences
from it..
However, there may also be legal restrictions on the type of data or
information business entities collect about their target customers. The
United States Congress has variously summoned the management of
Facebook over allegations of data breaches. The biggest issue was
about the 2016 presidential elections, where Facebook was accused of
letting third parties have access to confidential information on their
users. The information collected was used to develop targeted
campaign messages that were designed to give a particular candidate
some leverage in the elections (Fuller, 2019, p.14). Although the
sending of targeted messages shows the potential of AI tools in
business information management and strategy developed, several
ethical issues are also raised. The most prominent ethical issue is that
some individuals may use personal information for other intentions far
from the business objectives. Some individuals within the business
organizations may be malicious and sometimes may collude with third
parties to intrude on the privacy of their customers. Therefore, most
countries have developed strict laws surrounding the protection of
sensitive customer information, and when any breaches occur,
business organizations may have to incur high financial penalties.
Therefore, it is essential for business organizations to be very cautious
on who accesses the information, and what measures they need to put
in place to protect the sensitive information..
Recommendations
Amazon was one of the first companies to use AI tools to drive its
product recommendations. Therefore, Amazon serves as a model
company in analyzing the potential of AI tools, especially in the
management of information, and how that information can be used to
boost business growth. Firstly, Amazon started purely as a bookselling
business but has rapidly grown to include many products, and at the
moment, it rivals large retail stores such as Wal-Mart. One interesting
thing about Amazon is that its business model is purely online.
Customers order various products online, and through the superior
delivery system, the company delivers the products to the doorsteps of
the customers. Amazon enjoys about 49 percent of the United States’
e-commerce market (Donici et al., 2012, p.1)). Such a share shows
that Amazon is the leading online retailer in the United States..
The success of Amazon’s e-commerce sector is mainly because of
how the company manages information using various AI tools.
According to Donici et al., (2012), Amazon takes data analysis of their
customers seriously. For instance, whenever a customer clicks on a
product but does not purchase it, such information is collected to
establish the reason it was not purchased. Based on such information,
the company develops a strategy to make the products more appealing
to the customers, and consequently influence them to purchase the
products (Donici et al., 2012 p.2). Artificial intelligence tools are also
used at Amazon to predict customer behavior and patterns. Whenever
a customer clicks on the Amazon application, they are likely to see a
list of suggestions of items. This list is usually compiled by the
various AI tools based on their previous purchase behaviors, and that
makes it easy for the customers to spot products and for the company
to influence the customers to purchase their products..
Based on Amazon’s success, various recommendations can be made.
Firstly, owing to the potential of AI tools in the business currently and
in the future, it is important for business organizations to adopt AI
tools that focus on analyzing information and increasing their sales.
Crucial information to be collected by such tools should be about
consumer preferences and habits. Once these aspects are known, the
AI tools can synthesize the information and suggest products to
customers that are commensurate with their preferences. Secondly, AI
tools in business should be developed with the analysis of
demographics in mind. Demographics are essential in understanding
population trends and composition. In such a case, the AI tools should
be able to generate data about the emerging markets, as well as those
which could probably be on the decline. That means AI tools need to
help a business avoid certain risks and, at the same time, explore
potential markets..
Thirdly, business organizations need to embrace technology more to
be able to enjoy the use of various AI tools. Businesses that still have
not digitized are missing out on the potential of AI tools in
synthesizing information and helping them to develop a strategy.
When businesses digitize, they get access to a lot of information. For
instance, potential customers will start visiting their sites. When AI
tools are embedded in these sites, businesses will learn about the
habits of consumers, and consequently, develop products that suit
them. Fourthly, it is important for businesses to operate within the
existing legal framework to enjoy the benefits of AI tools. While AI
tools offer limitless potential in innovation and strategy development,
wrong use can also put a business into trouble. It is necessary to avoid
confidential data breaches, and that calls for strict data protection
measures. The last recommendation is that businesses need to focus
on emerging markets with huge populations and high technology
penetration. These populations represent potential markets, and since
the penetration of technology means that people have acquired various
devices such as computers and smartphones, and can access the
internet, these are attractive markets for AI tools. The AI tools will
analyze various factors, and make certain inferences that will help the
specific businesses to develop strategy, innovate, and gain leverage in
their respective industries.
One of the opportunities most business organizations are missing from
is that this huge volume of data can be put to good use in the aspects
of analysis, prediction, and, ultimately, the development of essential
solutions. The maxim that information is power needs to apply to the
use of big data. For a long time, most business organizations have
relied on humans to analyze data, interpret it, and make crucial
decisions. Companies have also incurred large sums of money to train
employees or even hire employees with the necessary skills to gather
information in order for businesses to develop strategies. On the same
note, some businesses or companies send their employees overseas to
learn about the trends of consumers or potential clients in the foreign
countries, and it is quite common currently to hear about the
importance of understanding the diverse cultures around the globe, as
well as buying habits of people from the diverse cultures. However,
most of these aspects can be learned using computer algorithms,
developed and interpreted by Artificial Intelligence (AI) systems. To
be precise, the AI systems can make various inferences from the big
data, which most business organizations are ignoring or depending on
third parties to manage..
AI is a novel concept that refers to automated technological systems,
which are used in diverse aspects to make operations easier, as well as
to improve the outcomes of various processes. In this context, the
analysis will only focus on the use of AI systems in the management
of the massive volume of information generated currently in the
business environment to foster innovation and develop a strategy.
Although human beings are still important in the operation of
businesses, and it is also not expected that AI systems will replace
humans entirely, the volume of information generated in the modern
business environment cannot be managed and interpreted by human
beings easily (Soni et al., 2019 p.11). Therefore, the use of AI systems
will make the interpretation of this information easier, and
consequently facilitate the innovation and strategy development
process..
Analysis
Definition
According to De Mauro (2015), artificial intelligence refers to “the
ability of a machine to learn from experience and perform tasks
normally attributed to human intelligence, for example, problem-
solving, reasoning, and understanding natural language” (98). In the
context of business information, the application of AI would refer to
the ability of these machines to perceive the big data, analyze this
data, and make specific inferences from it..
PESTEL Analysis
This section mainly describes the various factors that may affect the
adoption of artificial intelligence in the management of information
and the development of strategy in business by a business.
Conventionally, PESTEL illuminates political, Economic, Social,
Technological, Environmental, and Legal factors that may affect the
operation of a business. In this context, these factors focus on how AI
technologies may be affected in business..
Political factors
The political factors that may affect the adoption of AI systems are
quite diverse. The first factor concerns the level of political stability.
Before a company decides to invest in a particular country, they need
to ensure that the environment is conducive for business operations. If
a company cannot operate or set up business in a particular region of
the globe, it means that the development of AI systems will not be
realized. Since this essay focuses on the opportunities offered by the
development and use of various AI tools in business, an unstable
political environment implies that the tools could not be used
altogether. A politically unstable market or country also affects the
collection of information. When people are displaced or do not have
predictive buying patterns, then such a group of people forms an
unreliable market, and it is a waste of time for a business to focus its
resources on such a market. Closely related to political stability is the
integrity of politicians, and their likelihood to engage in acts of
corruption. The consequences could be possible impeachments or
resignations of high-level government employees who may be quite
skillful. If such employees resign and could be knowledgeable in the
implementation of various AI systems, then their penetration could be
derailed..
Another political factor relates to the various policies that the
government creates in relation to business operations. For example,
most countries in the Arab world, or precisely, Muslim countries have
policies on the sale and purchase of alcohol. Indeed, companies that
deal with the sale of alcohol may not find the use of AI systems to
manage and analyze information not very useful in such countries.
Perhaps the most prominent political policies that may hinder the
penetration and use of AI tools in business are those concerning the
penetration of the internet, especially social media. In the current
world, many companies have taken advantage of the internet, and
social media, in particular, to advertise their products, monitor
consumer trends, and predict their purchase trends. However, some
oppressive regimes prohibit the use of certain technologies. A good
example is a country such as North Korea that does not allow the
public to use the internet or to get connected to networks that have a
global reach. Therefore, such countries present an impediment to
access to information and the use of AI technologies to analyze
information..
The proper political aspect that favors the use of AI tools in business
is the rapid pace at which many countries are embracing technology.
Currently, most developing countries in Africa, Asia, and South
America have social media networks, and various leaders do not feel
much threatened with people interacting on these sites. On the same
note, countries are also investing heavily in the development and
proliferation of technology. The objective of such a massive
investment is that technology will create efficiency and improve
people’s access to critical information. A continent like Africa, which
for a long time, has been perceived to be backward currently is
involved in efforts to increase internet penetration. According to a
study, there are more than 525 million internet users in Africa
(Ngesah, 2005, p.11). Such statistics represent crucial information to
companies that seek to expand their operations to Africa, for instance..
Through the use of AI data analysis tools, business organizations can
analyze the demographic composition of these users, the amount of
time they take on the internet, as well as the kind of information these
people search on the internet. These people could search for
information related to various products. AI tools in business are
designed to gather such information (the type of products people such,
as well as their preferences). The most important issue here is that as
governments throughout the world continue to allow internet
penetration and other innovations related to technology spread, AI
systems gain much prominence because companies get access to more
information as a consequence of the large number of people accessing
the internet..
Economic factors
One of the factors that affect the use of AI tools in any country relates
to the economic system in operation. For instance, a monopolistic
economic system may discourage the use of AI tools in business
information management and strategy development. A country like
North Korea has the state running almost all businesses. One of the
industries most affected is the media industry because the state
controls all information that people receive. A company using AI tools
in such an industry would have analyzed information such as the
number of viewers, as well as, their demographics. Consequently, that
information would have been used to innovate and develop a strategy
aimed at appealing to the target market. However, in industries that
have monopolies, it is challenging to use AI tools to analyze
information because entry into the industry is restricted..
Nevertheless, most markets in the current world are liberal, and
virtually in almost every venture, there is competition. Competition
makes the use of AI tools very necessary because businesses will
inevitably try to analyze the market and become innovative to outdo
one another. Therefore, the growth of AI tools will be exacerbated by
a challenge; stiff competition (Kok et al., 2009 p.1). Businesses will
need to analyze important information about consumers in order to
take them customer-specific adverts or make products that are tailored
towards solving their needs. Additionally, an essential economic
factor relates to the GDP of a country, and the measures the economic
development of a country. While AI tools seem to be more suitable in
developed countries such as the United States, and a majority of those
in Europe, developing countries in Africa, Asia, and South America
are also expanding their economies, and with the improvement in
people’s standards of living, their purchase power also rises.
Therefore, AI tools in business will focus on diverse markets
throughout the whole world, and the data generated will help decide
where to invest and what to invest..
Social factors
According to Noonan and Piatt (2015), the demographics of a
population, which means the respective genders and ages of a
population, primarily affects the decision whether a product may be
marketed to the population. For example, makeup products are mostly
targeted to women, and that means people using AI tools to project
purchase trends for such products will mainly focus on women.
Secondly, the class distribution among a certain population will also
be important in developing AI tools that generate information and
foster innovation of products, which are directed at the different
classes. For example, in the United States, Wal-Mart mainly focuses
on the low-income earners, while a retail store such as Costco focuses
on the affluent (Marcilla, 2014 p.6). Therefore, in terms of targeting,
these two retail stores collect different information using various AI
tools. The last crucial social factor is the education level of various
consumers. Most educated people have embraced technology and
could prefer convenience over other hustles. For example, most
educated people live in urban centers, are likely to use Uber car
services, may order products online, and have them delivered to their
doorsteps..
Looking at the opportunities of the various social factors, it is
important to start with a demographic factor such as age. Young
people seem to have embraced technology more compared to adults,
and for developing countries, especially in Africa, young people form
the majority of the population. Since young people are more
technology-savvy, this shows the potential of the use of AI tools to
analyze this market in the form of consumption trends, attitudes,
preferences, and styles (Al-Zahrani and Marghalani, 2018 p.2).
Secondly, most people continue to be educated even in the poorest
countries, and subsequently, there is a general trend of rural-urban
migration. Most people migrate from rural areas to search for better
opportunities (education, employment, social amenities) in urban
areas. Since people in urban areas are likely to embrace technology, it
means that the population using technology is increasing rapidly.
These people will need to travel within the urban centers, eat-in cafes
or restaurants, purchase home items, and even clothes. Evidently,
continued urbanization, and embrace of technology is going to
increase the use of AI tools to analyze information about consumers..
Technological factors
It is possible to argue that AI has developed and continues to gain
prominence because the rapid advancement of technology. Firstly, it is
already mentioned that big data has necessitated businesses or
companies to develop AI tools to analyze, interpret, and make certain
inferences from the massive chunk of information. Big data has
emerged because most information is converted from analog forms to
a form that can be stored and interpreted by machines. With the
emergence of smartphones, people access a variety of information
about products, places, people, among other things. Mobile phone
manufacturing companies such as Apple and Microsoft are competing
incessantly to make superior models to woe their target customers.
Young people are mostly targeted because they are more technology-
savvy..
Far from computers and mobile phones, social media companies such
as Facebook, YouTube, Twitter, and Instagram have grown, and all
these sites have taken advantage of the enormous social media
subscriptions to advertise various products. According to Noonan and
Piatt (2015), there are more than 3.8 billion social media users in the
world. Consequently, many companies continue to explore these
channels to advertise their products. These companies not only focus
on selling their products but also by developing AI tools, which
analyze the number of people that visit their social media pages, the
kind of products they search, as well as how long they last on those
pages. The analysis of this information is not meant for storage; the
companies use it to innovate and develop a strategy. The most
important thing is that with increasing population and the penetration
of technology across communities all over the world, the number of
social media users will increase, and apart from using the sites for
advertising, companies will need to develop strategies using analysis
of various AI tools..
Environmental factors
Climate change currently is a significant concern throughout the
world. The media has become more vocal on the issue, and
consequently, more people are becoming conscious about their
environment. The increased awareness poses a significant challenge,
especially to businesses that do not observe various environmental
conservation measures. Even when such businesses use AI tools to try
and appeal to the target market, consumers may be influenced by
activists to boycott the products of companies that do not adhere to the
stipulated measures. A company such as Volkswagen was forced to
withdraw thousands of cars from the global market because of
excessive emission of fumes, and that resulted in the loss of millions
of dollars (Glikson et al., 2019 p.223). Various environmental
conservation organizations have toughened regulations on production
processes, and such stringent policies may affect how organizations
conduct business, and subsequently use various AI tools..
The various environmental concerns and regulations imply that
businesses, which adhere to the stipulated measures and are conscious
of their production and operations may witness high customer traffic,
which will consequently necessitate the use of AI tools to gather
important information and develop strategies that address their needs.
However, there is also competition among companies to try and meet
various environmental conservation obligations to get access to this
environmentally conscious market. To be able to develop various
strategies of adhering to the environmental conservation stipulations,
businesses need to collect information about various environmental
trends using AI tools, and that means that with increased awareness,
businesses will have to change their strategies continuously..
Legal factors
The first legal aspect that continues to shape the use of AI tools in
business is the creation and enforcement of intellectual property laws.
Various companies develop various AI tools, and business
organizations need to purchase them or seek permission before using
them. On the other hand, various business organizations need to hire
individuals with the necessary knowledge and skills to develop the AI
tools needed to manage information and develop a strategy. Therefore,
it is evident that the breach of the stipulated laws concerning patents,
copyrights, and other forms of intellectual property can be very costly
for businesses in terms of financial penalties, as well as the time lost
in legal battles. Most of the time, businesses involved in the
technology sector have been having legal tussles over copyright
issues, especially companies such as Microsoft and Apple..
The legal environment can also be viewed in a positive light,
especially concerning intellectual property. The stringent measures
that are meant to protect individuals, businesses, and organizations
from third-party unauthorized use of their AI tools for information
management ensure that these businesses benefit from their
innovations. Therefore, the legal environment has and continues to
help the growth of AI systems through the protection of people’s ideas
through punishing individuals who steal these ideas and use them for
personal gain. With robust legal systems, there is immense
opportunity in the development and use of AI tools in business in the
management of big data and the development of essential inferences
from it..
However, there may also be legal restrictions on the type of data or
information business entities collect about their target customers. The
United States Congress has variously summoned the management of
Facebook over allegations of data breaches. The biggest issue was
about the 2016 presidential elections, where Facebook was accused of
letting third parties have access to confidential information on their
users. The information collected was used to develop targeted
campaign messages that were designed to give a particular candidate
some leverage in the elections (Fuller, 2019, p.14). Although the
sending of targeted messages shows the potential of AI tools in
business information management and strategy developed, several
ethical issues are also raised. The most prominent ethical issue is that
some individuals may use personal information for other intentions far
from the business objectives. Some individuals within the business
organizations may be malicious and sometimes may collude with third
parties to intrude on the privacy of their customers. Therefore, most
countries have developed strict laws surrounding the protection of
sensitive customer information, and when any breaches occur,
business organizations may have to incur high financial penalties.
Therefore, it is essential for business organizations to be very cautious
on who accesses the information, and what measures they need to put
in place to protect the sensitive information..
Recommendations
Amazon was one of the first companies to use AI tools to drive its
product recommendations. Therefore, Amazon serves as a model
company in analyzing the potential of AI tools, especially in the
management of information, and how that information can be used to
boost business growth. Firstly, Amazon started purely as a bookselling
business but has rapidly grown to include many products, and at the
moment, it rivals large retail stores such as Wal-Mart. One interesting
thing about Amazon is that its business model is purely online.
Customers order various products online, and through the superior
delivery system, the company delivers the products to the doorsteps of
the customers. Amazon enjoys about 49 percent of the United States’
e-commerce market (Donici et al., 2012, p.1)). Such a share shows
that Amazon is the leading online retailer in the United States..
The success of Amazon’s e-commerce sector is mainly because of
how the company manages information using various AI tools.
According to Donici et al., (2012), Amazon takes data analysis of their
customers seriously. For instance, whenever a customer clicks on a
product but does not purchase it, such information is collected to
establish the reason it was not purchased. Based on such information,
the company develops a strategy to make the products more appealing
to the customers, and consequently influence them to purchase the
products (Donici et al., 2012 p.2). Artificial intelligence tools are also
used at Amazon to predict customer behavior and patterns. Whenever
a customer clicks on the Amazon application, they are likely to see a
list of suggestions of items. This list is usually compiled by the
various AI tools based on their previous purchase behaviors, and that
makes it easy for the customers to spot products and for the company
to influence the customers to purchase their products..
Based on Amazon’s success, various recommendations can be made.
Firstly, owing to the potential of AI tools in the business currently and
in the future, it is important for business organizations to adopt AI
tools that focus on analyzing information and increasing their sales.
Crucial information to be collected by such tools should be about
consumer preferences and habits. Once these aspects are known, the
AI tools can synthesize the information and suggest products to
customers that are commensurate with their preferences. Secondly, AI
tools in business should be developed with the analysis of
demographics in mind. Demographics are essential in understanding
population trends and composition. In such a case, the AI tools should
be able to generate data about the emerging markets, as well as those
which could probably be on the decline. That means AI tools need to
help a business avoid certain risks and, at the same time, explore
potential markets..
Thirdly, business organizations need to embrace technology more to
be able to enjoy the use of various AI tools. Businesses that still have
not digitized are missing out on the potential of AI tools in
synthesizing information and helping them to develop a strategy.
When businesses digitize, they get access to a lot of information. For
instance, potential customers will start visiting their sites. When AI
tools are embedded in these sites, businesses will learn about the
habits of consumers, and consequently, develop products that suit
them. Fourthly, it is important for businesses to operate within the
existing legal framework to enjoy the benefits of AI tools. While AI
tools offer limitless potential in innovation and strategy development,
wrong use can also put a business into trouble. It is necessary to avoid
confidential data breaches, and that calls for strict data protection
measures. The last recommendation is that businesses need to focus
on emerging markets with huge populations and high technology
penetration. These populations represent potential markets, and since
the penetration of technology means that people have acquired various
devices such as computers and smartphones, and can access the
internet, these are attractive markets for AI tools. The AI tools will
analyze various factors, and make certain inferences that will help the
specific businesses to develop strategy, innovate, and gain leverage in
their respective industries.
One of the opportunities most business organizations are missing from
is that this huge volume of data can be put to good use in the aspects
of analysis, prediction, and, ultimately, the development of essential
solutions. The maxim that information is power needs to apply to the
use of big data. For a long time, most business organizations have
relied on humans to analyze data, interpret it, and make crucial
decisions. Companies have also incurred large sums of money to train
employees or even hire employees with the necessary skills to gather
information in order for businesses to develop strategies. On the same
note, some businesses or companies send their employees overseas to
learn about the trends of consumers or potential clients in the foreign
countries, and it is quite common currently to hear about the
importance of understanding the diverse cultures around the globe, as
well as buying habits of people from the diverse cultures. However,
most of these aspects can be learned using computer algorithms,
developed and interpreted by Artificial Intelligence (AI) systems. To
be precise, the AI systems can make various inferences from the big
data, which most business organizations are ignoring or depending on
third parties to manage..
AI is a novel concept that refers to automated technological systems,
which are used in diverse aspects to make operations easier, as well as
to improve the outcomes of various processes. In this context, the
analysis will only focus on the use of AI systems in the management
of the massive volume of information generated currently in the
business environment to foster innovation and develop a strategy.
Although human beings are still important in the operation of
businesses, and it is also not expected that AI systems will replace
humans entirely, the volume of information generated in the modern
business environment cannot be managed and interpreted by human
beings easily (Soni et al., 2019 p.11). Therefore, the use of AI systems
will make the interpretation of this information easier, and
consequently facilitate the innovation and strategy development
process..
Analysis
Definition
According to De Mauro (2015), artificial intelligence refers to “the
ability of a machine to learn from experience and perform tasks
normally attributed to human intelligence, for example, problem-
solving, reasoning, and understanding natural language” (98). In the
context of business information, the application of AI would refer to
the ability of these machines to perceive the big data, analyze this
data, and make specific inferences from it..
PESTEL Analysis
This section mainly describes the various factors that may affect the
adoption of artificial intelligence in the management of information
and the development of strategy in business by a business.
Conventionally, PESTEL illuminates political, Economic, Social,
Technological, Environmental, and Legal factors that may affect the
operation of a business. In this context, these factors focus on how AI
technologies may be affected in business..
Political factors
The political factors that may affect the adoption of AI systems are
quite diverse. The first factor concerns the level of political stability.
Before a company decides to invest in a particular country, they need
to ensure that the environment is conducive for business operations. If
a company cannot operate or set up business in a particular region of
the globe, it means that the development of AI systems will not be
realized. Since this essay focuses on the opportunities offered by the
development and use of various AI tools in business, an unstable
political environment implies that the tools could not be used
altogether. A politically unstable market or country also affects the
collection of information. When people are displaced or do not have
predictive buying patterns, then such a group of people forms an
unreliable market, and it is a waste of time for a business to focus its
resources on such a market. Closely related to political stability is the
integrity of politicians, and their likelihood to engage in acts of
corruption. The consequences could be possible impeachments or
resignations of high-level government employees who may be quite
skillful. If such employees resign and could be knowledgeable in the
implementation of various AI systems, then their penetration could be
derailed..
Another political factor relates to the various policies that the
government creates in relation to business operations. For example,
most countries in the Arab world, or precisely, Muslim countries have
policies on the sale and purchase of alcohol. Indeed, companies that
deal with the sale of alcohol may not find the use of AI systems to
manage and analyze information not very useful in such countries.
Perhaps the most prominent political policies that may hinder the
penetration and use of AI tools in business are those concerning the
penetration of the internet, especially social media. In the current
world, many companies have taken advantage of the internet, and
social media, in particular, to advertise their products, monitor
consumer trends, and predict their purchase trends. However, some
oppressive regimes prohibit the use of certain technologies. A good
example is a country such as North Korea that does not allow the
public to use the internet or to get connected to networks that have a
global reach. Therefore, such countries present an impediment to
access to information and the use of AI technologies to analyze
information..
The proper political aspect that favors the use of AI tools in business
is the rapid pace at which many countries are embracing technology.
Currently, most developing countries in Africa, Asia, and South
America have social media networks, and various leaders do not feel
much threatened with people interacting on these sites. On the same
note, countries are also investing heavily in the development and
proliferation of technology. The objective of such a massive
investment is that technology will create efficiency and improve
people’s access to critical information. A continent like Africa, which
for a long time, has been perceived to be backward currently is
involved in efforts to increase internet penetration. According to a
study, there are more than 525 million internet users in Africa
(Ngesah, 2005, p.11). Such statistics represent crucial information to
companies that seek to expand their operations to Africa, for instance..
Through the use of AI data analysis tools, business organizations can
analyze the demographic composition of these users, the amount of
time they take on the internet, as well as the kind of information these
people search on the internet. These people could search for
information related to various products. AI tools in business are
designed to gather such information (the type of products people such,
as well as their preferences). The most important issue here is that as
governments throughout the world continue to allow internet
penetration and other innovations related to technology spread, AI
systems gain much prominence because companies get access to more
information as a consequence of the large number of people accessing
the internet..
Economic factors
One of the factors that affect the use of AI tools in any country relates
to the economic system in operation. For instance, a monopolistic
economic system may discourage the use of AI tools in business
information management and strategy development. A country like
North Korea has the state running almost all businesses. One of the
industries most affected is the media industry because the state
controls all information that people receive. A company using AI tools
in such an industry would have analyzed information such as the
number of viewers, as well as, their demographics. Consequently, that
information would have been used to innovate and develop a strategy
aimed at appealing to the target market. However, in industries that
have monopolies, it is challenging to use AI tools to analyze
information because entry into the industry is restricted..
Nevertheless, most markets in the current world are liberal, and
virtually in almost every venture, there is competition. Competition
makes the use of AI tools very necessary because businesses will
inevitably try to analyze the market and become innovative to outdo
one another. Therefore, the growth of AI tools will be exacerbated by
a challenge; stiff competition (Kok et al., 2009 p.1). Businesses will
need to analyze important information about consumers in order to
take them customer-specific adverts or make products that are tailored
towards solving their needs. Additionally, an essential economic
factor relates to the GDP of a country, and the measures the economic
development of a country. While AI tools seem to be more suitable in
developed countries such as the United States, and a majority of those
in Europe, developing countries in Africa, Asia, and South America
are also expanding their economies, and with the improvement in
people’s standards of living, their purchase power also rises.
Therefore, AI tools in business will focus on diverse markets
throughout the whole world, and the data generated will help decide
where to invest and what to invest..
Social factors
According to Noonan and Piatt (2015), the demographics of a
population, which means the respective genders and ages of a
population, primarily affects the decision whether a product may be
marketed to the population. For example, makeup products are mostly
targeted to women, and that means people using AI tools to project
purchase trends for such products will mainly focus on women.
Secondly, the class distribution among a certain population will also
be important in developing AI tools that generate information and
foster innovation of products, which are directed at the different
classes. For example, in the United States, Wal-Mart mainly focuses
on the low-income earners, while a retail store such as Costco focuses
on the affluent (Marcilla, 2014 p.6). Therefore, in terms of targeting,
these two retail stores collect different information using various AI
tools. The last crucial social factor is the education level of various
consumers. Most educated people have embraced technology and
could prefer convenience over other hustles. For example, most
educated people live in urban centers, are likely to use Uber car
services, may order products online, and have them delivered to their
doorsteps..
Looking at the opportunities of the various social factors, it is
important to start with a demographic factor such as age. Young
people seem to have embraced technology more compared to adults,
and for developing countries, especially in Africa, young people form
the majority of the population. Since young people are more
technology-savvy, this shows the potential of the use of AI tools to
analyze this market in the form of consumption trends, attitudes,
preferences, and styles (Al-Zahrani and Marghalani, 2018 p.2).
Secondly, most people continue to be educated even in the poorest
countries, and subsequently, there is a general trend of rural-urban
migration. Most people migrate from rural areas to search for better
opportunities (education, employment, social amenities) in urban
areas. Since people in urban areas are likely to embrace technology, it
means that the population using technology is increasing rapidly.
These people will need to travel within the urban centers, eat-in cafes
or restaurants, purchase home items, and even clothes. Evidently,
continued urbanization, and embrace of technology is going to
increase the use of AI tools to analyze information about consumers..
Technological factors
It is possible to argue that AI has developed and continues to gain
prominence because the rapid advancement of technology. Firstly, it is
already mentioned that big data has necessitated businesses or
companies to develop AI tools to analyze, interpret, and make certain
inferences from the massive chunk of information. Big data has
emerged because most information is converted from analog forms to
a form that can be stored and interpreted by machines. With the
emergence of smartphones, people access a variety of information
about products, places, people, among other things. Mobile phone
manufacturing companies such as Apple and Microsoft are competing
incessantly to make superior models to woe their target customers.
Young people are mostly targeted because they are more technology-
savvy..
Far from computers and mobile phones, social media companies such
as Facebook, YouTube, Twitter, and Instagram have grown, and all
these sites have taken advantage of the enormous social media
subscriptions to advertise various products. According to Noonan and
Piatt (2015), there are more than 3.8 billion social media users in the
world. Consequently, many companies continue to explore these
channels to advertise their products. These companies not only focus
on selling their products but also by developing AI tools, which
analyze the number of people that visit their social media pages, the
kind of products they search, as well as how long they last on those
pages. The analysis of this information is not meant for storage; the
companies use it to innovate and develop a strategy. The most
important thing is that with increasing population and the penetration
of technology across communities all over the world, the number of
social media users will increase, and apart from using the sites for
advertising, companies will need to develop strategies using analysis
of various AI tools..
Environmental factors
Climate change currently is a significant concern throughout the
world. The media has become more vocal on the issue, and
consequently, more people are becoming conscious about their
environment. The increased awareness poses a significant challenge,
especially to businesses that do not observe various environmental
conservation measures. Even when such businesses use AI tools to try
and appeal to the target market, consumers may be influenced by
activists to boycott the products of companies that do not adhere to the
stipulated measures. A company such as Volkswagen was forced to
withdraw thousands of cars from the global market because of
excessive emission of fumes, and that resulted in the loss of millions
of dollars (Glikson et al., 2019 p.223). Various environmental
conservation organizations have toughened regulations on production
processes, and such stringent policies may affect how organizations
conduct business, and subsequently use various AI tools..
The various environmental concerns and regulations imply that
businesses, which adhere to the stipulated measures and are conscious
of their production and operations may witness high customer traffic,
which will consequently necessitate the use of AI tools to gather
important information and develop strategies that address their needs.
However, there is also competition among companies to try and meet
various environmental conservation obligations to get access to this
environmentally conscious market. To be able to develop various
strategies of adhering to the environmental conservation stipulations,
businesses need to collect information about various environmental
trends using AI tools, and that means that with increased awareness,
businesses will have to change their strategies continuously..
Legal factors
The first legal aspect that continues to shape the use of AI tools in
business is the creation and enforcement of intellectual property laws.
Various companies develop various AI tools, and business
organizations need to purchase them or seek permission before using
them. On the other hand, various business organizations need to hire
individuals with the necessary knowledge and skills to develop the AI
tools needed to manage information and develop a strategy. Therefore,
it is evident that the breach of the stipulated laws concerning patents,
copyrights, and other forms of intellectual property can be very costly
for businesses in terms of financial penalties, as well as the time lost
in legal battles. Most of the time, businesses involved in the
technology sector have been having legal tussles over copyright
issues, especially companies such as Microsoft and Apple..
The legal environment can also be viewed in a positive light,
especially concerning intellectual property. The stringent measures
that are meant to protect individuals, businesses, and organizations
from third-party unauthorized use of their AI tools for information
management ensure that these businesses benefit from their
innovations. Therefore, the legal environment has and continues to
help the growth of AI systems through the protection of people’s ideas
through punishing individuals who steal these ideas and use them for
personal gain. With robust legal systems, there is immense
opportunity in the development and use of AI tools in business in the
management of big data and the development of essential inferences
from it..
However, there may also be legal restrictions on the type of data or
information business entities collect about their target customers. The
United States Congress has variously summoned the management of
Facebook over allegations of data breaches. The biggest issue was
about the 2016 presidential elections, where Facebook was accused of
letting third parties have access to confidential information on their
users. The information collected was used to develop targeted
campaign messages that were designed to give a particular candidate
some leverage in the elections (Fuller, 2019, p.14). Although the
sending of targeted messages shows the potential of AI tools in
business information management and strategy developed, several
ethical issues are also raised. The most prominent ethical issue is that
some individuals may use personal information for other intentions far
from the business objectives. Some individuals within the business
organizations may be malicious and sometimes may collude with third
parties to intrude on the privacy of their customers. Therefore, most
countries have developed strict laws surrounding the protection of
sensitive customer information, and when any breaches occur,
business organizations may have to incur high financial penalties.
Therefore, it is essential for business organizations to be very cautious
on who accesses the information, and what measures they need to put
in place to protect the sensitive information..
Recommendations
Amazon was one of the first companies to use AI tools to drive its
product recommendations. Therefore, Amazon serves as a model
company in analyzing the potential of AI tools, especially in the
management of information, and how that information can be used to
boost business growth. Firstly, Amazon started purely as a bookselling
business but has rapidly grown to include many products, and at the
moment, it rivals large retail stores such as Wal-Mart. One interesting
thing about Amazon is that its business model is purely online.
Customers order various products online, and through the superior
delivery system, the company delivers the products to the doorsteps of
the customers. Amazon enjoys about 49 percent of the United States’
e-commerce market (Donici et al., 2012, p.1)). Such a share shows
that Amazon is the leading online retailer in the United States..
The success of Amazon’s e-commerce sector is mainly because of
how the company manages information using various AI tools.
According to Donici et al., (2012), Amazon takes data analysis of their
customers seriously. For instance, whenever a customer clicks on a
product but does not purchase it, such information is collected to
establish the reason it was not purchased. Based on such information,
the company develops a strategy to make the products more appealing
to the customers, and consequently influence them to purchase the
products (Donici et al., 2012 p.2). Artificial intelligence tools are also
used at Amazon to predict customer behavior and patterns. Whenever
a customer clicks on the Amazon application, they are likely to see a
list of suggestions of items. This list is usually compiled by the
various AI tools based on their previous purchase behaviors, and that
makes it easy for the customers to spot products and for the company
to influence the customers to purchase their products..
Based on Amazon’s success, various recommendations can be made.
Firstly, owing to the potential of AI tools in the business currently and
in the future, it is important for business organizations to adopt AI
tools that focus on analyzing information and increasing their sales.
Crucial information to be collected by such tools should be about
consumer preferences and habits. Once these aspects are known, the
AI tools can synthesize the information and suggest products to
customers that are commensurate with their preferences. Secondly, AI
tools in business should be developed with the analysis of
demographics in mind. Demographics are essential in understanding
population trends and composition. In such a case, the AI tools should
be able to generate data about the emerging markets, as well as those
which could probably be on the decline. That means AI tools need to
help a business avoid certain risks and, at the same time, explore
potential markets..
Thirdly, business organizations need to embrace technology more to
be able to enjoy the use of various AI tools. Businesses that still have
not digitized are missing out on the potential of AI tools in
synthesizing information and helping them to develop a strategy.
When businesses digitize, they get access to a lot of information. For
instance, potential customers will start visiting their sites. When AI
tools are embedded in these sites, businesses will learn about the
habits of consumers, and consequently, develop products that suit
them. Fourthly, it is important for businesses to operate within the
existing legal framework to enjoy the benefits of AI tools. While AI
tools offer limitless potential in innovation and strategy development,
wrong use can also put a business into trouble. It is necessary to avoid
confidential data breaches, and that calls for strict data protection
measures. The last recommendation is that businesses need to focus
on emerging markets with huge populations and high technology
penetration. These populations represent potential markets, and since
the penetration of technology means that people have acquired various
devices such as computers and smartphones, and can access the
internet, these are attractive markets for AI tools. The AI tools will
analyze various factors, and make certain inferences that will help the
specific businesses to develop strategy, innovate, and gain leverage in
their respective industries.
One of the opportunities most business organizations are missing from
is that this huge volume of data can be put to good use in the aspects
of analysis, prediction, and, ultimately, the development of essential
solutions. The maxim that information is power needs to apply to the
use of big data. For a long time, most business organizations have
relied on humans to analyze data, interpret it, and make crucial
decisions. Companies have also incurred large sums of money to train
employees or even hire employees with the necessary skills to gather
information in order for businesses to develop strategies. On the same
note, some businesses or companies send their employees overseas to
learn about the trends of consumers or potential clients in the foreign
countries, and it is quite common currently to hear about the
importance of understanding the diverse cultures around the globe, as
well as buying habits of people from the diverse cultures. However,
most of these aspects can be learned using computer algorithms,
developed and interpreted by Artificial Intelligence (AI) systems. To
be precise, the AI systems can make various inferences from the big
data, which most business organizations are ignoring or depending on
third parties to manage..
AI is a novel concept that refers to automated technological systems,
which are used in diverse aspects to make operations easier, as well as
to improve the outcomes of various processes. In this context, the
analysis will only focus on the use of AI systems in the management
of the massive volume of information generated currently in the
business environment to foster innovation and develop a strategy.
Although human beings are still important in the operation of
businesses, and it is also not expected that AI systems will replace
humans entirely, the volume of information generated in the modern
business environment cannot be managed and interpreted by human
beings easily (Soni et al., 2019 p.11). Therefore, the use of AI systems
will make the interpretation of this information easier, and
consequently facilitate the innovation and strategy development
process..
Analysis
Definition
According to De Mauro (2015), artificial intelligence refers to “the
ability of a machine to learn from experience and perform tasks
normally attributed to human intelligence, for example, problem-
solving, reasoning, and understanding natural language” (98). In the
context of business information, the application of AI would refer to
the ability of these machines to perceive the big data, analyze this
data, and make specific inferences from it..
PESTEL Analysis
This section mainly describes the various factors that may affect the
adoption of artificial intelligence in the management of information
and the development of strategy in business by a business.
Conventionally, PESTEL illuminates political, Economic, Social,
Technological, Environmental, and Legal factors that may affect the
operation of a business. In this context, these factors focus on how AI
technologies may be affected in business..
Political factors
The political factors that may affect the adoption of AI systems are
quite diverse. The first factor concerns the level of political stability.
Before a company decides to invest in a particular country, they need
to ensure that the environment is conducive for business operations. If
a company cannot operate or set up business in a particular region of
the globe, it means that the development of AI systems will not be
realized. Since this essay focuses on the opportunities offered by the
development and use of various AI tools in business, an unstable
political environment implies that the tools could not be used
altogether. A politically unstable market or country also affects the
collection of information. When people are displaced or do not have
predictive buying patterns, then such a group of people forms an
unreliable market, and it is a waste of time for a business to focus its
resources on such a market. Closely related to political stability is the
integrity of politicians, and their likelihood to engage in acts of
corruption. The consequences could be possible impeachments or
resignations of high-level government employees who may be quite
skillful. If such employees resign and could be knowledgeable in the
implementation of various AI systems, then their penetration could be
derailed..
Another political factor relates to the various policies that the
government creates in relation to business operations. For example,
most countries in the Arab world, or precisely, Muslim countries have
policies on the sale and purchase of alcohol. Indeed, companies that
deal with the sale of alcohol may not find the use of AI systems to
manage and analyze information not very useful in such countries.
Perhaps the most prominent political policies that may hinder the
penetration and use of AI tools in business are those concerning the
penetration of the internet, especially social media. In the current
world, many companies have taken advantage of the internet, and
social media, in particular, to advertise their products, monitor
consumer trends, and predict their purchase trends. However, some
oppressive regimes prohibit the use of certain technologies. A good
example is a country such as North Korea that does not allow the
public to use the internet or to get connected to networks that have a
global reach. Therefore, such countries present an impediment to
access to information and the use of AI technologies to analyze
information..
The proper political aspect that favors the use of AI tools in business
is the rapid pace at which many countries are embracing technology.
Currently, most developing countries in Africa, Asia, and South
America have social media networks, and various leaders do not feel
much threatened with people interacting on these sites. On the same
note, countries are also investing heavily in the development and
proliferation of technology. The objective of such a massive
investment is that technology will create efficiency and improve
people’s access to critical information. A continent like Africa, which
for a long time, has been perceived to be backward currently is
involved in efforts to increase internet penetration. According to a
study, there are more than 525 million internet users in Africa
(Ngesah, 2005, p.11). Such statistics represent crucial information to
companies that seek to expand their operations to Africa, for instance..
Through the use of AI data analysis tools, business organizations can
analyze the demographic composition of these users, the amount of
time they take on the internet, as well as the kind of information these
people search on the internet. These people could search for
information related to various products. AI tools in business are
designed to gather such information (the type of products people such,
as well as their preferences). The most important issue here is that as
governments throughout the world continue to allow internet
penetration and other innovations related to technology spread, AI
systems gain much prominence because companies get access to more
information as a consequence of the large number of people accessing
the internet..
Economic factors
One of the factors that affect the use of AI tools in any country relates
to the economic system in operation. For instance, a monopolistic
economic system may discourage the use of AI tools in business
information management and strategy development. A country like
North Korea has the state running almost all businesses. One of the
industries most affected is the media industry because the state
controls all information that people receive. A company using AI tools
in such an industry would have analyzed information such as the
number of viewers, as well as, their demographics. Consequently, that
information would have been used to innovate and develop a strategy
aimed at appealing to the target market. However, in industries that
have monopolies, it is challenging to use AI tools to analyze
information because entry into the industry is restricted..
Nevertheless, most markets in the current world are liberal, and
virtually in almost every venture, there is competition. Competition
makes the use of AI tools very necessary because businesses will
inevitably try to analyze the market and become innovative to outdo
one another. Therefore, the growth of AI tools will be exacerbated by
a challenge; stiff competition (Kok et al., 2009 p.1). Businesses will
need to analyze important information about consumers in order to
take them customer-specific adverts or make products that are tailored
towards solving their needs. Additionally, an essential economic
factor relates to the GDP of a country, and the measures the economic
development of a country. While AI tools seem to be more suitable in
developed countries such as the United States, and a majority of those
in Europe, developing countries in Africa, Asia, and South America
are also expanding their economies, and with the improvement in
people’s standards of living, their purchase power also rises.
Therefore, AI tools in business will focus on diverse markets
throughout the whole world, and the data generated will help decide
where to invest and what to invest..
Social factors
According to Noonan and Piatt (2015), the demographics of a
population, which means the respective genders and ages of a
population, primarily affects the decision whether a product may be
marketed to the population. For example, makeup products are mostly
targeted to women, and that means people using AI tools to project
purchase trends for such products will mainly focus on women.
Secondly, the class distribution among a certain population will also
be important in developing AI tools that generate information and
foster innovation of products, which are directed at the different
classes. For example, in the United States, Wal-Mart mainly focuses
on the low-income earners, while a retail store such as Costco focuses
on the affluent (Marcilla, 2014 p.6). Therefore, in terms of targeting,
these two retail stores collect different information using various AI
tools. The last crucial social factor is the education level of various
consumers. Most educated people have embraced technology and
could prefer convenience over other hustles. For example, most
educated people live in urban centers, are likely to use Uber car
services, may order products online, and have them delivered to their
doorsteps..
Looking at the opportunities of the various social factors, it is
important to start with a demographic factor such as age. Young
people seem to have embraced technology more compared to adults,
and for developing countries, especially in Africa, young people form
the majority of the population. Since young people are more
technology-savvy, this shows the potential of the use of AI tools to
analyze this market in the form of consumption trends, attitudes,
preferences, and styles (Al-Zahrani and Marghalani, 2018 p.2).
Secondly, most people continue to be educated even in the poorest
countries, and subsequently, there is a general trend of rural-urban
migration. Most people migrate from rural areas to search for better
opportunities (education, employment, social amenities) in urban
areas. Since people in urban areas are likely to embrace technology, it
means that the population using technology is increasing rapidly.
These people will need to travel within the urban centers, eat-in cafes
or restaurants, purchase home items, and even clothes. Evidently,
continued urbanization, and embrace of technology is going to
increase the use of AI tools to analyze information about consumers..
Technological factors
It is possible to argue that AI has developed and continues to gain
prominence because the rapid advancement of technology. Firstly, it is
already mentioned that big data has necessitated businesses or
companies to develop AI tools to analyze, interpret, and make certain
inferences from the massive chunk of information. Big data has
emerged because most information is converted from analog forms to
a form that can be stored and interpreted by machines. With the
emergence of smartphones, people access a variety of information
about products, places, people, among other things. Mobile phone
manufacturing companies such as Apple and Microsoft are competing
incessantly to make superior models to woe their target customers.
Young people are mostly targeted because they are more technology-
savvy..
Far from computers and mobile phones, social media companies such
as Facebook, YouTube, Twitter, and Instagram have grown, and all
these sites have taken advantage of the enormous social media
subscriptions to advertise various products. According to Noonan and
Piatt (2015), there are more than 3.8 billion social media users in the
world. Consequently, many companies continue to explore these
channels to advertise their products. These companies not only focus
on selling their products but also by developing AI tools, which
analyze the number of people that visit their social media pages, the
kind of products they search, as well as how long they last on those
pages. The analysis of this information is not meant for storage; the
companies use it to innovate and develop a strategy. The most
important thing is that with increasing population and the penetration
of technology across communities all over the world, the number of
social media users will increase, and apart from using the sites for
advertising, companies will need to develop strategies using analysis
of various AI tools..
Environmental factors
Climate change currently is a significant concern throughout the
world. The media has become more vocal on the issue, and
consequently, more people are becoming conscious about their
environment. The increased awareness poses a significant challenge,
especially to businesses that do not observe various environmental
conservation measures. Even when such businesses use AI tools to try
and appeal to the target market, consumers may be influenced by
activists to boycott the products of companies that do not adhere to the
stipulated measures. A company such as Volkswagen was forced to
withdraw thousands of cars from the global market because of
excessive emission of fumes, and that resulted in the loss of millions
of dollars (Glikson et al., 2019 p.223). Various environmental
conservation organizations have toughened regulations on production
processes, and such stringent policies may affect how organizations
conduct business, and subsequently use various AI tools..
The various environmental concerns and regulations imply that
businesses, which adhere to the stipulated measures and are conscious
of their production and operations may witness high customer traffic,
which will consequently necessitate the use of AI tools to gather
important information and develop strategies that address their needs.
However, there is also competition among companies to try and meet
various environmental conservation obligations to get access to this
environmentally conscious market. To be able to develop various
strategies of adhering to the environmental conservation stipulations,
businesses need to collect information about various environmental
trends using AI tools, and that means that with increased awareness,
businesses will have to change their strategies continuously..
Legal factors
The first legal aspect that continues to shape the use of AI tools in
business is the creation and enforcement of intellectual property laws.
Various companies develop various AI tools, and business
organizations need to purchase them or seek permission before using
them. On the other hand, various business organizations need to hire
individuals with the necessary knowledge and skills to develop the AI
tools needed to manage information and develop a strategy. Therefore,
it is evident that the breach of the stipulated laws concerning patents,
copyrights, and other forms of intellectual property can be very costly
for businesses in terms of financial penalties, as well as the time lost
in legal battles. Most of the time, businesses involved in the
technology sector have been having legal tussles over copyright
issues, especially companies such as Microsoft and Apple..
The legal environment can also be viewed in a positive light,
especially concerning intellectual property. The stringent measures
that are meant to protect individuals, businesses, and organizations
from third-party unauthorized use of their AI tools for information
management ensure that these businesses benefit from their
innovations. Therefore, the legal environment has and continues to
help the growth of AI systems through the protection of people’s ideas
through punishing individuals who steal these ideas and use them for
personal gain. With robust legal systems, there is immense
opportunity in the development and use of AI tools in business in the
management of big data and the development of essential inferences
from it..
However, there may also be legal restrictions on the type of data or
information business entities collect about their target customers. The
United States Congress has variously summoned the management of
Facebook over allegations of data breaches. The biggest issue was
about the 2016 presidential elections, where Facebook was accused of
letting third parties have access to confidential information on their
users. The information collected was used to develop targeted
campaign messages that were designed to give a particular candidate
some leverage in the elections (Fuller, 2019, p.14). Although the
sending of targeted messages shows the potential of AI tools in
business information management and strategy developed, several
ethical issues are also raised. The most prominent ethical issue is that
some individuals may use personal information for other intentions far
from the business objectives. Some individuals within the business
organizations may be malicious and sometimes may collude with third
parties to intrude on the privacy of their customers. Therefore, most
countries have developed strict laws surrounding the protection of
sensitive customer information, and when any breaches occur,
business organizations may have to incur high financial penalties.
Therefore, it is essential for business organizations to be very cautious
on who accesses the information, and what measures they need to put
in place to protect the sensitive information..
Recommendations
Amazon was one of the first companies to use AI tools to drive its
product recommendations. Therefore, Amazon serves as a model
company in analyzing the potential of AI tools, especially in the
management of information, and how that information can be used to
boost business growth. Firstly, Amazon started purely as a bookselling
business but has rapidly grown to include many products, and at the
moment, it rivals large retail stores such as Wal-Mart. One interesting
thing about Amazon is that its business model is purely online.
Customers order various products online, and through the superior
delivery system, the company delivers the products to the doorsteps of
the customers. Amazon enjoys about 49 percent of the United States’
e-commerce market (Donici et al., 2012, p.1)). Such a share shows
that Amazon is the leading online retailer in the United States..
The success of Amazon’s e-commerce sector is mainly because of
how the company manages information using various AI tools.
According to Donici et al., (2012), Amazon takes data analysis of their
customers seriously. For instance, whenever a customer clicks on a
product but does not purchase it, such information is collected to
establish the reason it was not purchased. Based on such information,
the company develops a strategy to make the products more appealing
to the customers, and consequently influence them to purchase the
products (Donici et al., 2012 p.2). Artificial intelligence tools are also
used at Amazon to predict customer behavior and patterns. Whenever
a customer clicks on the Amazon application, they are likely to see a
list of suggestions of items. This list is usually compiled by the
various AI tools based on their previous purchase behaviors, and that
makes it easy for the customers to spot products and for the company
to influence the customers to purchase their products..
Based on Amazon’s success, various recommendations can be made.
Firstly, owing to the potential of AI tools in the business currently and
in the future, it is important for business organizations to adopt AI
tools that focus on analyzing information and increasing their sales.
Crucial information to be collected by such tools should be about
consumer preferences and habits. Once these aspects are known, the
AI tools can synthesize the information and suggest products to
customers that are commensurate with their preferences. Secondly, AI
tools in business should be developed with the analysis of
demographics in mind. Demographics are essential in understanding
population trends and composition. In such a case, the AI tools should
be able to generate data about the emerging markets, as well as those
which could probably be on the decline. That means AI tools need to
help a business avoid certain risks and, at the same time, explore
potential markets..
Thirdly, business organizations need to embrace technology more to
be able to enjoy the use of various AI tools. Businesses that still have
not digitized are missing out on the potential of AI tools in
synthesizing information and helping them to develop a strategy.
When businesses digitize, they get access to a lot of information. For
instance, potential customers will start visiting their sites. When AI
tools are embedded in these sites, businesses will learn about the
habits of consumers, and consequently, develop products that suit
them. Fourthly, it is important for businesses to operate within the
existing legal framework to enjoy the benefits of AI tools. While AI
tools offer limitless potential in innovation and strategy development,
wrong use can also put a business into trouble. It is necessary to avoid
confidential data breaches, and that calls for strict data protection
measures. The last recommendation is that businesses need to focus
on emerging markets with huge populations and high technology
penetration. These populations represent potential markets, and since
the penetration of technology means that people have acquired various
devices such as computers and smartphones, and can access the
internet, these are attractive markets for AI tools. The AI tools will
analyze various factors, and make certain inferences that will help the
specific businesses to develop strategy, innovate, and gain leverage in
their respective industries.
One of the opportunities most business organizations are missing from
is that this huge volume of data can be put to good use in the aspects
of analysis, prediction, and, ultimately, the development of essential
solutions. The maxim that information is power needs to apply to the
use of big data. For a long time, most business organizations have
relied on humans to analyze data, interpret it, and make crucial
decisions. Companies have also incurred large sums of money to train
employees or even hire employees with the necessary skills to gather
information in order for businesses to develop strategies. On the same
note, some businesses or companies send their employees overseas to
learn about the trends of consumers or potential clients in the foreign
countries, and it is quite common currently to hear about the
importance of understanding the diverse cultures around the globe, as
well as buying habits of people from the diverse cultures. However,
most of these aspects can be learned using computer algorithms,
developed and interpreted by Artificial Intelligence (AI) systems. To
be precise, the AI systems can make various inferences from the big
data, which most business organizations are ignoring or depending on
third parties to manage..
AI is a novel concept that refers to automated technological systems,
which are used in diverse aspects to make operations easier, as well as
to improve the outcomes of various processes. In this context, the
analysis will only focus on the use of AI systems in the management
of the massive volume of information generated currently in the
business environment to foster innovation and develop a strategy.
Although human beings are still important in the operation of
businesses, and it is also not expected that AI systems will replace
humans entirely, the volume of information generated in the modern
business environment cannot be managed and interpreted by human
beings easily (Soni et al., 2019 p.11). Therefore, the use of AI systems
will make the interpretation of this information easier, and
consequently facilitate the innovation and strategy development
process..
Analysis
Definition
According to De Mauro (2015), artificial intelligence refers to “the
ability of a machine to learn from experience and perform tasks
normally attributed to human intelligence, for example, problem-
solving, reasoning, and understanding natural language” (98). In the
context of business information, the application of AI would refer to
the ability of these machines to perceive the big data, analyze this
data, and make specific inferences from it..
PESTEL Analysis
This section mainly describes the various factors that may affect the
adoption of artificial intelligence in the management of information
and the development of strategy in business by a business.
Conventionally, PESTEL illuminates political, Economic, Social,
Technological, Environmental, and Legal factors that may affect the
operation of a business. In this context, these factors focus on how AI
technologies may be affected in business..
Political factors
The political factors that may affect the adoption of AI systems are
quite diverse. The first factor concerns the level of political stability.
Before a company decides to invest in a particular country, they need
to ensure that the environment is conducive for business operations. If
a company cannot operate or set up business in a particular region of
the globe, it means that the development of AI systems will not be
realized. Since this essay focuses on the opportunities offered by the
development and use of various AI tools in business, an unstable
political environment implies that the tools could not be used
altogether. A politically unstable market or country also affects the
collection of information. When people are displaced or do not have
predictive buying patterns, then such a group of people forms an
unreliable market, and it is a waste of time for a business to focus its
resources on such a market. Closely related to political stability is the
integrity of politicians, and their likelihood to engage in acts of
corruption. The consequences could be possible impeachments or
resignations of high-level government employees who may be quite
skillful. If such employees resign and could be knowledgeable in the
implementation of various AI systems, then their penetration could be
derailed..
Another political factor relates to the various policies that the
government creates in relation to business operations. For example,
most countries in the Arab world, or precisely, Muslim countries have
policies on the sale and purchase of alcohol. Indeed, companies that
deal with the sale of alcohol may not find the use of AI systems to
manage and analyze information not very useful in such countries.
Perhaps the most prominent political policies that may hinder the
penetration and use of AI tools in business are those concerning the
penetration of the internet, especially social media. In the current
world, many companies have taken advantage of the internet, and
social media, in particular, to advertise their products, monitor
consumer trends, and predict their purchase trends. However, some
oppressive regimes prohibit the use of certain technologies. A good
example is a country such as North Korea that does not allow the
public to use the internet or to get connected to networks that have a
global reach. Therefore, such countries present an impediment to
access to information and the use of AI technologies to analyze
information..
The proper political aspect that favors the use of AI tools in business
is the rapid pace at which many countries are embracing technology.
Currently, most developing countries in Africa, Asia, and South
America have social media networks, and various leaders do not feel
much threatened with people interacting on these sites. On the same
note, countries are also investing heavily in the development and
proliferation of technology. The objective of such a massive
investment is that technology will create efficiency and improve
people’s access to critical information. A continent like Africa, which
for a long time, has been perceived to be backward currently is
involved in efforts to increase internet penetration. According to a
study, there are more than 525 million internet users in Africa
(Ngesah, 2005, p.11). Such statistics represent crucial information to
companies that seek to expand their operations to Africa, for instance..
Through the use of AI data analysis tools, business organizations can
analyze the demographic composition of these users, the amount of
time they take on the internet, as well as the kind of information these
people search on the internet. These people could search for
information related to various products. AI tools in business are
designed to gather such information (the type of products people such,
as well as their preferences). The most important issue here is that as
governments throughout the world continue to allow internet
penetration and other innovations related to technology spread, AI
systems gain much prominence because companies get access to more
information as a consequence of the large number of people accessing
the internet..
Economic factors
One of the factors that affect the use of AI tools in any country relates
to the economic system in operation. For instance, a monopolistic
economic system may discourage the use of AI tools in business
information management and strategy development. A country like
North Korea has the state running almost all businesses. One of the
industries most affected is the media industry because the state
controls all information that people receive. A company using AI tools
in such an industry would have analyzed information such as the
number of viewers, as well as, their demographics. Consequently, that
information would have been used to innovate and develop a strategy
aimed at appealing to the target market. However, in industries that
have monopolies, it is challenging to use AI tools to analyze
information because entry into the industry is restricted..
Nevertheless, most markets in the current world are liberal, and
virtually in almost every venture, there is competition. Competition
makes the use of AI tools very necessary because businesses will
inevitably try to analyze the market and become innovative to outdo
one another. Therefore, the growth of AI tools will be exacerbated by
a challenge; stiff competition (Kok et al., 2009 p.1). Businesses will
need to analyze important information about consumers in order to
take them customer-specific adverts or make products that are tailored
towards solving their needs. Additionally, an essential economic
factor relates to the GDP of a country, and the measures the economic
development of a country. While AI tools seem to be more suitable in
developed countries such as the United States, and a majority of those
in Europe, developing countries in Africa, Asia, and South America
are also expanding their economies, and with the improvement in
people’s standards of living, their purchase power also rises.
Therefore, AI tools in business will focus on diverse markets
throughout the whole world, and the data generated will help decide
where to invest and what to invest..
Social factors
According to Noonan and Piatt (2015), the demographics of a
population, which means the respective genders and ages of a
population, primarily affects the decision whether a product may be
marketed to the population. For example, makeup products are mostly
targeted to women, and that means people using AI tools to project
purchase trends for such products will mainly focus on women.
Secondly, the class distribution among a certain population will also
be important in developing AI tools that generate information and
foster innovation of products, which are directed at the different
classes. For example, in the United States, Wal-Mart mainly focuses
on the low-income earners, while a retail store such as Costco focuses
on the affluent (Marcilla, 2014 p.6). Therefore, in terms of targeting,
these two retail stores collect different information using various AI
tools. The last crucial social factor is the education level of various
consumers. Most educated people have embraced technology and
could prefer convenience over other hustles. For example, most
educated people live in urban centers, are likely to use Uber car
services, may order products online, and have them delivered to their
doorsteps..
Looking at the opportunities of the various social factors, it is
important to start with a demographic factor such as age. Young
people seem to have embraced technology more compared to adults,
and for developing countries, especially in Africa, young people form
the majority of the population. Since young people are more
technology-savvy, this shows the potential of the use of AI tools to
analyze this market in the form of consumption trends, attitudes,
preferences, and styles (Al-Zahrani and Marghalani, 2018 p.2).
Secondly, most people continue to be educated even in the poorest
countries, and subsequently, there is a general trend of rural-urban
migration. Most people migrate from rural areas to search for better
opportunities (education, employment, social amenities) in urban
areas. Since people in urban areas are likely to embrace technology, it
means that the population using technology is increasing rapidly.
These people will need to travel within the urban centers, eat-in cafes
or restaurants, purchase home items, and even clothes. Evidently,
continued urbanization, and embrace of technology is going to
increase the use of AI tools to analyze information about consumers..
Technological factors
It is possible to argue that AI has developed and continues to gain
prominence because the rapid advancement of technology. Firstly, it is
already mentioned that big data has necessitated businesses or
companies to develop AI tools to analyze, interpret, and make certain
inferences from the massive chunk of information. Big data has
emerged because most information is converted from analog forms to
a form that can be stored and interpreted by machines. With the
emergence of smartphones, people access a variety of information
about products, places, people, among other things. Mobile phone
manufacturing companies such as Apple and Microsoft are competing
incessantly to make superior models to woe their target customers.
Young people are mostly targeted because they are more technology-
savvy..
Far from computers and mobile phones, social media companies such
as Facebook, YouTube, Twitter, and Instagram have grown, and all
these sites have taken advantage of the enormous social media
subscriptions to advertise various products. According to Noonan and
Piatt (2015), there are more than 3.8 billion social media users in the
world. Consequently, many companies continue to explore these
channels to advertise their products. These companies not only focus
on selling their products but also by developing AI tools, which
analyze the number of people that visit their social media pages, the
kind of products they search, as well as how long they last on those
pages. The analysis of this information is not meant for storage; the
companies use it to innovate and develop a strategy. The most
important thing is that with increasing population and the penetration
of technology across communities all over the world, the number of
social media users will increase, and apart from using the sites for
advertising, companies will need to develop strategies using analysis
of various AI tools..
Environmental factors
Climate change currently is a significant concern throughout the
world. The media has become more vocal on the issue, and
consequently, more people are becoming conscious about their
environment. The increased awareness poses a significant challenge,
especially to businesses that do not observe various environmental
conservation measures. Even when such businesses use AI tools to try
and appeal to the target market, consumers may be influenced by
activists to boycott the products of companies that do not adhere to the
stipulated measures. A company such as Volkswagen was forced to
withdraw thousands of cars from the global market because of
excessive emission of fumes, and that resulted in the loss of millions
of dollars (Glikson et al., 2019 p.223). Various environmental
conservation organizations have toughened regulations on production
processes, and such stringent policies may affect how organizations
conduct business, and subsequently use various AI tools..
The various environmental concerns and regulations imply that
businesses, which adhere to the stipulated measures and are conscious
of their production and operations may witness high customer traffic,
which will consequently necessitate the use of AI tools to gather
important information and develop strategies that address their needs.
However, there is also competition among companies to try and meet
various environmental conservation obligations to get access to this
environmentally conscious market. To be able to develop various
strategies of adhering to the environmental conservation stipulations,
businesses need to collect information about various environmental
trends using AI tools, and that means that with increased awareness,
businesses will have to change their strategies continuously..
Legal factors
The first legal aspect that continues to shape the use of AI tools in
business is the creation and enforcement of intellectual property laws.
Various companies develop various AI tools, and business
organizations need to purchase them or seek permission before using
them. On the other hand, various business organizations need to hire
individuals with the necessary knowledge and skills to develop the AI
tools needed to manage information and develop a strategy. Therefore,
it is evident that the breach of the stipulated laws concerning patents,
copyrights, and other forms of intellectual property can be very costly
for businesses in terms of financial penalties, as well as the time lost
in legal battles. Most of the time, businesses involved in the
technology sector have been having legal tussles over copyright
issues, especially companies such as Microsoft and Apple..
The legal environment can also be viewed in a positive light,
especially concerning intellectual property. The stringent measures
that are meant to protect individuals, businesses, and organizations
from third-party unauthorized use of their AI tools for information
management ensure that these businesses benefit from their
innovations. Therefore, the legal environment has and continues to
help the growth of AI systems through the protection of people’s ideas
through punishing individuals who steal these ideas and use them for
personal gain. With robust legal systems, there is immense
opportunity in the development and use of AI tools in business in the
management of big data and the development of essential inferences
from it..
However, there may also be legal restrictions on the type of data or
information business entities collect about their target customers. The
United States Congress has variously summoned the management of
Facebook over allegations of data breaches. The biggest issue was
about the 2016 presidential elections, where Facebook was accused of
letting third parties have access to confidential information on their
users. The information collected was used to develop targeted
campaign messages that were designed to give a particular candidate
some leverage in the elections (Fuller, 2019, p.14). Although the
sending of targeted messages shows the potential of AI tools in
business information management and strategy developed, several
ethical issues are also raised. The most prominent ethical issue is that
some individuals may use personal information for other intentions far
from the business objectives. Some individuals within the business
organizations may be malicious and sometimes may collude with third
parties to intrude on the privacy of their customers. Therefore, most
countries have developed strict laws surrounding the protection of
sensitive customer information, and when any breaches occur,
business organizations may have to incur high financial penalties.
Therefore, it is essential for business organizations to be very cautious
on who accesses the information, and what measures they need to put
in place to protect the sensitive information..
Recommendations
Amazon was one of the first companies to use AI tools to drive its
product recommendations. Therefore, Amazon serves as a model
company in analyzing the potential of AI tools, especially in the
management of information, and how that information can be used to
boost business growth. Firstly, Amazon started purely as a bookselling
business but has rapidly grown to include many products, and at the
moment, it rivals large retail stores such as Wal-Mart. One interesting
thing about Amazon is that its business model is purely online.
Customers order various products online, and through the superior
delivery system, the company delivers the products to the doorsteps of
the customers. Amazon enjoys about 49 percent of the United States’
e-commerce market (Donici et al., 2012, p.1)). Such a share shows
that Amazon is the leading online retailer in the United States..
The success of Amazon’s e-commerce sector is mainly because of
how the company manages information using various AI tools.
According to Donici et al., (2012), Amazon takes data analysis of their
customers seriously. For instance, whenever a customer clicks on a
product but does not purchase it, such information is collected to
establish the reason it was not purchased. Based on such information,
the company develops a strategy to make the products more appealing
to the customers, and consequently influence them to purchase the
products (Donici et al., 2012 p.2). Artificial intelligence tools are also
used at Amazon to predict customer behavior and patterns. Whenever
a customer clicks on the Amazon application, they are likely to see a
list of suggestions of items. This list is usually compiled by the
various AI tools based on their previous purchase behaviors, and that
makes it easy for the customers to spot products and for the company
to influence the customers to purchase their products..
Based on Amazon’s success, various recommendations can be made.
Firstly, owing to the potential of AI tools in the business currently and
in the future, it is important for business organizations to adopt AI
tools that focus on analyzing information and increasing their sales.
Crucial information to be collected by such tools should be about
consumer preferences and habits. Once these aspects are known, the
AI tools can synthesize the information and suggest products to
customers that are commensurate with their preferences. Secondly, AI
tools in business should be developed with the analysis of
demographics in mind. Demographics are essential in understanding
population trends and composition. In such a case, the AI tools should
be able to generate data about the emerging markets, as well as those
which could probably be on the decline. That means AI tools need to
help a business avoid certain risks and, at the same time, explore
potential markets..
Thirdly, business organizations need to embrace technology more to
be able to enjoy the use of various AI tools. Businesses that still have
not digitized are missing out on the potential of AI tools in
synthesizing information and helping them to develop a strategy.
When businesses digitize, they get access to a lot of information. For
instance, potential customers will start visiting their sites. When AI
tools are embedded in these sites, businesses will learn about the
habits of consumers, and consequently, develop products that suit
them. Fourthly, it is important for businesses to operate within the
existing legal framework to enjoy the benefits of AI tools. While AI
tools offer limitless potential in innovation and strategy development,
wrong use can also put a business into trouble. It is necessary to avoid
confidential data breaches, and that calls for strict data protection
measures. The last recommendation is that businesses need to focus
on emerging markets with huge populations and high technology
penetration. These populations represent potential markets, and since
the penetration of technology means that people have acquired various
devices such as computers and smartphones, and can access the
internet, these are attractive markets for AI tools. The AI tools will
analyze various factors, and make certain inferences that will help the
specific businesses to develop strategy, innovate, and gain leverage in
their respective industries.
One of the opportunities most business organizations are missing from
is that this huge volume of data can be put to good use in the aspects
of analysis, prediction, and, ultimately, the development of essential
solutions. The maxim that information is power needs to apply to the
use of big data. For a long time, most business organizations have
relied on humans to analyze data, interpret it, and make crucial
decisions. Companies have also incurred large sums of money to train
employees or even hire employees with the necessary skills to gather
information in order for businesses to develop strategies. On the same
note, some businesses or companies send their employees overseas to
learn about the trends of consumers or potential clients in the foreign
countries, and it is quite common currently to hear about the
importance of understanding the diverse cultures around the globe, as
well as buying habits of people from the diverse cultures. However,
most of these aspects can be learned using computer algorithms,
developed and interpreted by Artificial Intelligence (AI) systems. To
be precise, the AI systems can make various inferences from the big
data, which most business organizations are ignoring or depending on
third parties to manage..
AI is a novel concept that refers to automated technological systems,
which are used in diverse aspects to make operations easier, as well as
to improve the outcomes of various processes. In this context, the
analysis will only focus on the use of AI systems in the management
of the massive volume of information generated currently in the
business environment to foster innovation and develop a strategy.
Although human beings are still important in the operation of
businesses, and it is also not expected that AI systems will replace
humans entirely, the volume of information generated in the modern
business environment cannot be managed and interpreted by human
beings easily (Soni et al., 2019 p.11). Therefore, the use of AI systems
will make the interpretation of this information easier, and
consequently facilitate the innovation and strategy development
process..
Analysis
Definition
According to De Mauro (2015), artificial intelligence refers to “the
ability of a machine to learn from experience and perform tasks
normally attributed to human intelligence, for example, problem-
solving, reasoning, and understanding natural language” (98). In the
context of business information, the application of AI would refer to
the ability of these machines to perceive the big data, analyze this
data, and make specific inferences from it..
PESTEL Analysis
This section mainly describes the various factors that may affect the
adoption of artificial intelligence in the management of information
and the development of strategy in business by a business.
Conventionally, PESTEL illuminates political, Economic, Social,
Technological, Environmental, and Legal factors that may affect the
operation of a business. In this context, these factors focus on how AI
technologies may be affected in business..
Political factors
The political factors that may affect the adoption of AI systems are
quite diverse. The first factor concerns the level of political stability.
Before a company decides to invest in a particular country, they need
to ensure that the environment is conducive for business operations. If
a company cannot operate or set up business in a particular region of
the globe, it means that the development of AI systems will not be
realized. Since this essay focuses on the opportunities offered by the
development and use of various AI tools in business, an unstable
political environment implies that the tools could not be used
altogether. A politically unstable market or country also affects the
collection of information. When people are displaced or do not have
predictive buying patterns, then such a group of people forms an
unreliable market, and it is a waste of time for a business to focus its
resources on such a market. Closely related to political stability is the
integrity of politicians, and their likelihood to engage in acts of
corruption. The consequences could be possible impeachments or
resignations of high-level government employees who may be quite
skillful. If such employees resign and could be knowledgeable in the
implementation of various AI systems, then their penetration could be
derailed..
Another political factor relates to the various policies that the
government creates in relation to business operations. For example,
most countries in the Arab world, or precisely, Muslim countries have
policies on the sale and purchase of alcohol. Indeed, companies that
deal with the sale of alcohol may not find the use of AI systems to
manage and analyze information not very useful in such countries.
Perhaps the most prominent political policies that may hinder the
penetration and use of AI tools in business are those concerning the
penetration of the internet, especially social media. In the current
world, many companies have taken advantage of the internet, and
social media, in particular, to advertise their products, monitor
consumer trends, and predict their purchase trends. However, some
oppressive regimes prohibit the use of certain technologies. A good
example is a country such as North Korea that does not allow the
public to use the internet or to get connected to networks that have a
global reach. Therefore, such countries present an impediment to
access to information and the use of AI technologies to analyze
information..
The proper political aspect that favors the use of AI tools in business
is the rapid pace at which many countries are embracing technology.
Currently, most developing countries in Africa, Asia, and South
America have social media networks, and various leaders do not feel
much threatened with people interacting on these sites. On the same
note, countries are also investing heavily in the development and
proliferation of technology. The objective of such a massive
investment is that technology will create efficiency and improve
people’s access to critical information. A continent like Africa, which
for a long time, has been perceived to be backward currently is
involved in efforts to increase internet penetration. According to a
study, there are more than 525 million internet users in Africa
(Ngesah, 2005, p.11). Such statistics represent crucial information to
companies that seek to expand their operations to Africa, for instance..
Through the use of AI data analysis tools, business organizations can
analyze the demographic composition of these users, the amount of
time they take on the internet, as well as the kind of information these
people search on the internet. These people could search for
information related to various products. AI tools in business are
designed to gather such information (the type of products people such,
as well as their preferences). The most important issue here is that as
governments throughout the world continue to allow internet
penetration and other innovations related to technology spread, AI
systems gain much prominence because companies get access to more
information as a consequence of the large number of people accessing
the internet..
Economic factors
One of the factors that affect the use of AI tools in any country relates
to the economic system in operation. For instance, a monopolistic
economic system may discourage the use of AI tools in business
information management and strategy development. A country like
North Korea has the state running almost all businesses. One of the
industries most affected is the media industry because the state
controls all information that people receive. A company using AI tools
in such an industry would have analyzed information such as the
number of viewers, as well as, their demographics. Consequently, that
information would have been used to innovate and develop a strategy
aimed at appealing to the target market. However, in industries that
have monopolies, it is challenging to use AI tools to analyze
information because entry into the industry is restricted..
Nevertheless, most markets in the current world are liberal, and
virtually in almost every venture, there is competition. Competition
makes the use of AI tools very necessary because businesses will
inevitably try to analyze the market and become innovative to outdo
one another. Therefore, the growth of AI tools will be exacerbated by
a challenge; stiff competition (Kok et al., 2009 p.1). Businesses will
need to analyze important information about consumers in order to
take them customer-specific adverts or make products that are tailored
towards solving their needs. Additionally, an essential economic
factor relates to the GDP of a country, and the measures the economic
development of a country. While AI tools seem to be more suitable in
developed countries such as the United States, and a majority of those
in Europe, developing countries in Africa, Asia, and South America
are also expanding their economies, and with the improvement in
people’s standards of living, their purchase power also rises.
Therefore, AI tools in business will focus on diverse markets
throughout the whole world, and the data generated will help decide
where to invest and what to invest..
Social factors
According to Noonan and Piatt (2015), the demographics of a
population, which means the respective genders and ages of a
population, primarily affects the decision whether a product may be
marketed to the population. For example, makeup products are mostly
targeted to women, and that means people using AI tools to project
purchase trends for such products will mainly focus on women.
Secondly, the class distribution among a certain population will also
be important in developing AI tools that generate information and
foster innovation of products, which are directed at the different
classes. For example, in the United States, Wal-Mart mainly focuses
on the low-income earners, while a retail store such as Costco focuses
on the affluent (Marcilla, 2014 p.6). Therefore, in terms of targeting,
these two retail stores collect different information using various AI
tools. The last crucial social factor is the education level of various
consumers. Most educated people have embraced technology and
could prefer convenience over other hustles. For example, most
educated people live in urban centers, are likely to use Uber car
services, may order products online, and have them delivered to their
doorsteps..
Looking at the opportunities of the various social factors, it is
important to start with a demographic factor such as age. Young
people seem to have embraced technology more compared to adults,
and for developing countries, especially in Africa, young people form
the majority of the population. Since young people are more
technology-savvy, this shows the potential of the use of AI tools to
analyze this market in the form of consumption trends, attitudes,
preferences, and styles (Al-Zahrani and Marghalani, 2018 p.2).
Secondly, most people continue to be educated even in the poorest
countries, and subsequently, there is a general trend of rural-urban
migration. Most people migrate from rural areas to search for better
opportunities (education, employment, social amenities) in urban
areas. Since people in urban areas are likely to embrace technology, it
means that the population using technology is increasing rapidly.
These people will need to travel within the urban centers, eat-in cafes
or restaurants, purchase home items, and even clothes. Evidently,
continued urbanization, and embrace of technology is going to
increase the use of AI tools to analyze information about consumers..
Technological factors
It is possible to argue that AI has developed and continues to gain
prominence because the rapid advancement of technology. Firstly, it is
already mentioned that big data has necessitated businesses or
companies to develop AI tools to analyze, interpret, and make certain
inferences from the massive chunk of information. Big data has
emerged because most information is converted from analog forms to
a form that can be stored and interpreted by machines. With the
emergence of smartphones, people access a variety of information
about products, places, people, among other things. Mobile phone
manufacturing companies such as Apple and Microsoft are competing
incessantly to make superior models to woe their target customers.
Young people are mostly targeted because they are more technology-
savvy..
Far from computers and mobile phones, social media companies such
as Facebook, YouTube, Twitter, and Instagram have grown, and all
these sites have taken advantage of the enormous social media
subscriptions to advertise various products. According to Noonan and
Piatt (2015), there are more than 3.8 billion social media users in the
world. Consequently, many companies continue to explore these
channels to advertise their products. These companies not only focus
on selling their products but also by developing AI tools, which
analyze the number of people that visit their social media pages, the
kind of products they search, as well as how long they last on those
pages. The analysis of this information is not meant for storage; the
companies use it to innovate and develop a strategy. The most
important thing is that with increasing population and the penetration
of technology across communities all over the world, the number of
social media users will increase, and apart from using the sites for
advertising, companies will need to develop strategies using analysis
of various AI tools..
Environmental factors
Climate change currently is a significant concern throughout the
world. The media has become more vocal on the issue, and
consequently, more people are becoming conscious about their
environment. The increased awareness poses a significant challenge,
especially to businesses that do not observe various environmental
conservation measures. Even when such businesses use AI tools to try
and appeal to the target market, consumers may be influenced by
activists to boycott the products of companies that do not adhere to the
stipulated measures. A company such as Volkswagen was forced to
withdraw thousands of cars from the global market because of
excessive emission of fumes, and that resulted in the loss of millions
of dollars (Glikson et al., 2019 p.223). Various environmental
conservation organizations have toughened regulations on production
processes, and such stringent policies may affect how organizations
conduct business, and subsequently use various AI tools..
The various environmental concerns and regulations imply that
businesses, which adhere to the stipulated measures and are conscious
of their production and operations may witness high customer traffic,
which will consequently necessitate the use of AI tools to gather
important information and develop strategies that address their needs.
However, there is also competition among companies to try and meet
various environmental conservation obligations to get access to this
environmentally conscious market. To be able to develop various
strategies of adhering to the environmental conservation stipulations,
businesses need to collect information about various environmental
trends using AI tools, and that means that with increased awareness,
businesses will have to change their strategies continuously..
Legal factors
The first legal aspect that continues to shape the use of AI tools in
business is the creation and enforcement of intellectual property laws.
Various companies develop various AI tools, and business
organizations need to purchase them or seek permission before using
them. On the other hand, various business organizations need to hire
individuals with the necessary knowledge and skills to develop the AI
tools needed to manage information and develop a strategy. Therefore,
it is evident that the breach of the stipulated laws concerning patents,
copyrights, and other forms of intellectual property can be very costly
for businesses in terms of financial penalties, as well as the time lost
in legal battles. Most of the time, businesses involved in the
technology sector have been having legal tussles over copyright
issues, especially companies such as Microsoft and Apple..
The legal environment can also be viewed in a positive light,
especially concerning intellectual property. The stringent measures
that are meant to protect individuals, businesses, and organizations
from third-party unauthorized use of their AI tools for information
management ensure that these businesses benefit from their
innovations. Therefore, the legal environment has and continues to
help the growth of AI systems through the protection of people’s ideas
through punishing individuals who steal these ideas and use them for
personal gain. With robust legal systems, there is immense
opportunity in the development and use of AI tools in business in the
management of big data and the development of essential inferences
from it..
However, there may also be legal restrictions on the type of data or
information business entities collect about their target customers. The
United States Congress has variously summoned the management of
Facebook over allegations of data breaches. The biggest issue was
about the 2016 presidential elections, where Facebook was accused of
letting third parties have access to confidential information on their
users. The information collected was used to develop targeted
campaign messages that were designed to give a particular candidate
some leverage in the elections (Fuller, 2019, p.14). Although the
sending of targeted messages shows the potential of AI tools in
business information management and strategy developed, several
ethical issues are also raised. The most prominent ethical issue is that
some individuals may use personal information for other intentions far
from the business objectives. Some individuals within the business
organizations may be malicious and sometimes may collude with third
parties to intrude on the privacy of their customers. Therefore, most
countries have developed strict laws surrounding the protection of
sensitive customer information, and when any breaches occur,
business organizations may have to incur high financial penalties.
Therefore, it is essential for business organizations to be very cautious
on who accesses the information, and what measures they need to put
in place to protect the sensitive information..
Recommendations
Amazon was one of the first companies to use AI tools to drive its
product recommendations. Therefore, Amazon serves as a model
company in analyzing the potential of AI tools, especially in the
management of information, and how that information can be used to
boost business growth. Firstly, Amazon started purely as a bookselling
business but has rapidly grown to include many products, and at the
moment, it rivals large retail stores such as Wal-Mart. One interesting
thing about Amazon is that its business model is purely online.
Customers order various products online, and through the superior
delivery system, the company delivers the products to the doorsteps of
the customers. Amazon enjoys about 49 percent of the United States’
e-commerce market (Donici et al., 2012, p.1)). Such a share shows
that Amazon is the leading online retailer in the United States..
The success of Amazon’s e-commerce sector is mainly because of
how the company manages information using various AI tools.
According to Donici et al., (2012), Amazon takes data analysis of their
customers seriously. For instance, whenever a customer clicks on a
product but does not purchase it, such information is collected to
establish the reason it was not purchased. Based on such information,
the company develops a strategy to make the products more appealing
to the customers, and consequently influence them to purchase the
products (Donici et al., 2012 p.2). Artificial intelligence tools are also
used at Amazon to predict customer behavior and patterns. Whenever
a customer clicks on the Amazon application, they are likely to see a
list of suggestions of items. This list is usually compiled by the
various AI tools based on their previous purchase behaviors, and that
makes it easy for the customers to spot products and for the company
to influence the customers to purchase their products..
Based on Amazon’s success, various recommendations can be made.
Firstly, owing to the potential of AI tools in the business currently and
in the future, it is important for business organizations to adopt AI
tools that focus on analyzing information and increasing their sales.
Crucial information to be collected by such tools should be about
consumer preferences and habits. Once these aspects are known, the
AI tools can synthesize the information and suggest products to
customers that are commensurate with their preferences. Secondly, AI
tools in business should be developed with the analysis of
demographics in mind. Demographics are essential in understanding
population trends and composition. In such a case, the AI tools should
be able to generate data about the emerging markets, as well as those
which could probably be on the decline. That means AI tools need to
help a business avoid certain risks and, at the same time, explore
potential markets..
Thirdly, business organizations need to embrace technology more to
be able to enjoy the use of various AI tools. Businesses that still have
not digitized are missing out on the potential of AI tools in
synthesizing information and helping them to develop a strategy.
When businesses digitize, they get access to a lot of information. For
instance, potential customers will start visiting their sites. When AI
tools are embedded in these sites, businesses will learn about the
habits of consumers, and consequently, develop products that suit
them. Fourthly, it is important for businesses to operate within the
existing legal framework to enjoy the benefits of AI tools. While AI
tools offer limitless potential in innovation and strategy development,
wrong use can also put a business into trouble. It is necessary to avoid
confidential data breaches, and that calls for strict data protection
measures. The last recommendation is that businesses need to focus
on emerging markets with huge populations and high technology
penetration. These populations represent potential markets, and since
the penetration of technology means that people have acquired various
devices such as computers and smartphones, and can access the
internet, these are attractive markets for AI tools. The AI tools will
analyze various factors, and make certain inferences that will help the
specific businesses to develop strategy, innovate, and gain leverage in
their respective industries.
One of the opportunities most business organizations are missing from
is that this huge volume of data can be put to good use in the aspects
of analysis, prediction, and, ultimately, the development of essential
solutions. The maxim that information is power needs to apply to the
use of big data. For a long time, most business organizations have
relied on humans to analyze data, interpret it, and make crucial
decisions. Companies have also incurred large sums of money to train
employees or even hire employees with the necessary skills to gather
information in order for businesses to develop strategies. On the same
note, some businesses or companies send their employees overseas to
learn about the trends of consumers or potential clients in the foreign
countries, and it is quite common currently to hear about the
importance of understanding the diverse cultures around the globe, as
well as buying habits of people from the diverse cultures. However,
most of these aspects can be learned using computer algorithms,
developed and interpreted by Artificial Intelligence (AI) systems. To
be precise, the AI systems can make various inferences from the big
data, which most business organizations are ignoring or depending on
third parties to manage..
AI is a novel concept that refers to automated technological systems,
which are used in diverse aspects to make operations easier, as well as
to improve the outcomes of various processes. In this context, the
analysis will only focus on the use of AI systems in the management
of the massive volume of information generated currently in the
business environment to foster innovation and develop a strategy.
Although human beings are still important in the operation of
businesses, and it is also not expected that AI systems will replace
humans entirely, the volume of information generated in the modern
business environment cannot be managed and interpreted by human
beings easily (Soni et al., 2019 p.11). Therefore, the use of AI systems
will make the interpretation of this information easier, and
consequently facilitate the innovation and strategy development
process..
Analysis
Definition
According to De Mauro (2015), artificial intelligence refers to “the
ability of a machine to learn from experience and perform tasks
normally attributed to human intelligence, for example, problem-
solving, reasoning, and understanding natural language” (98). In the
context of business information, the application of AI would refer to
the ability of these machines to perceive the big data, analyze this
data, and make specific inferences from it..
PESTEL Analysis
This section mainly describes the various factors that may affect the
adoption of artificial intelligence in the management of information
and the development of strategy in business by a business.
Conventionally, PESTEL illuminates political, Economic, Social,
Technological, Environmental, and Legal factors that may affect the
operation of a business. In this context, these factors focus on how AI
technologies may be affected in business..
Political factors
The political factors that may affect the adoption of AI systems are
quite diverse. The first factor concerns the level of political stability.
Before a company decides to invest in a particular country, they need
to ensure that the environment is conducive for business operations. If
a company cannot operate or set up business in a particular region of
the globe, it means that the development of AI systems will not be
realized. Since this essay focuses on the opportunities offered by the
development and use of various AI tools in business, an unstable
political environment implies that the tools could not be used
altogether. A politically unstable market or country also affects the
collection of information. When people are displaced or do not have
predictive buying patterns, then such a group of people forms an
unreliable market, and it is a waste of time for a business to focus its
resources on such a market. Closely related to political stability is the
integrity of politicians, and their likelihood to engage in acts of
corruption. The consequences could be possible impeachments or
resignations of high-level government employees who may be quite
skillful. If such employees resign and could be knowledgeable in the
implementation of various AI systems, then their penetration could be
derailed..
Another political factor relates to the various policies that the
government creates in relation to business operations. For example,
most countries in the Arab world, or precisely, Muslim countries have
policies on the sale and purchase of alcohol. Indeed, companies that
deal with the sale of alcohol may not find the use of AI systems to
manage and analyze information not very useful in such countries.
Perhaps the most prominent political policies that may hinder the
penetration and use of AI tools in business are those concerning the
penetration of the internet, especially social media. In the current
world, many companies have taken advantage of the internet, and
social media, in particular, to advertise their products, monitor
consumer trends, and predict their purchase trends. However, some
oppressive regimes prohibit the use of certain technologies. A good
example is a country such as North Korea that does not allow the
public to use the internet or to get connected to networks that have a
global reach. Therefore, such countries present an impediment to
access to information and the use of AI technologies to analyze
information..
The proper political aspect that favors the use of AI tools in business
is the rapid pace at which many countries are embracing technology.
Currently, most developing countries in Africa, Asia, and South
America have social media networks, and various leaders do not feel
much threatened with people interacting on these sites. On the same
note, countries are also investing heavily in the development and
proliferation of technology. The objective of such a massive
investment is that technology will create efficiency and improve
people’s access to critical information. A continent like Africa, which
for a long time, has been perceived to be backward currently is
involved in efforts to increase internet penetration. According to a
study, there are more than 525 million internet users in Africa
(Ngesah, 2005, p.11). Such statistics represent crucial information to
companies that seek to expand their operations to Africa, for instance..
Through the use of AI data analysis tools, business organizations can
analyze the demographic composition of these users, the amount of
time they take on the internet, as well as the kind of information these
people search on the internet. These people could search for
information related to various products. AI tools in business are
designed to gather such information (the type of products people such,
as well as their preferences). The most important issue here is that as
governments throughout the world continue to allow internet
penetration and other innovations related to technology spread, AI
systems gain much prominence because companies get access to more
information as a consequence of the large number of people accessing
the internet..
Economic factors
One of the factors that affect the use of AI tools in any country relates
to the economic system in operation. For instance, a monopolistic
economic system may discourage the use of AI tools in business
information management and strategy development. A country like
North Korea has the state running almost all businesses. One of the
industries most affected is the media industry because the state
controls all information that people receive. A company using AI tools
in such an industry would have analyzed information such as the
number of viewers, as well as, their demographics. Consequently, that
information would have been used to innovate and develop a strategy
aimed at appealing to the target market. However, in industries that
have monopolies, it is challenging to use AI tools to analyze
information because entry into the industry is restricted..
Nevertheless, most markets in the current world are liberal, and
virtually in almost every venture, there is competition. Competition
makes the use of AI tools very necessary because businesses will
inevitably try to analyze the market and become innovative to outdo
one another. Therefore, the growth of AI tools will be exacerbated by
a challenge; stiff competition (Kok et al., 2009 p.1). Businesses will
need to analyze important information about consumers in order to
take them customer-specific adverts or make products that are tailored
towards solving their needs. Additionally, an essential economic
factor relates to the GDP of a country, and the measures the economic
development of a country. While AI tools seem to be more suitable in
developed countries such as the United States, and a majority of those
in Europe, developing countries in Africa, Asia, and South America
are also expanding their economies, and with the improvement in
people’s standards of living, their purchase power also rises.
Therefore, AI tools in business will focus on diverse markets
throughout the whole world, and the data generated will help decide
where to invest and what to invest..
Social factors
According to Noonan and Piatt (2015), the demographics of a
population, which means the respective genders and ages of a
population, primarily affects the decision whether a product may be
marketed to the population. For example, makeup products are mostly
targeted to women, and that means people using AI tools to project
purchase trends for such products will mainly focus on women.
Secondly, the class distribution among a certain population will also
be important in developing AI tools that generate information and
foster innovation of products, which are directed at the different
classes. For example, in the United States, Wal-Mart mainly focuses
on the low-income earners, while a retail store such as Costco focuses
on the affluent (Marcilla, 2014 p.6). Therefore, in terms of targeting,
these two retail stores collect different information using various AI
tools. The last crucial social factor is the education level of various
consumers. Most educated people have embraced technology and
could prefer convenience over other hustles. For example, most
educated people live in urban centers, are likely to use Uber car
services, may order products online, and have them delivered to their
doorsteps..
Looking at the opportunities of the various social factors, it is
important to start with a demographic factor such as age. Young
people seem to have embraced technology more compared to adults,
and for developing countries, especially in Africa, young people form
the majority of the population. Since young people are more
technology-savvy, this shows the potential of the use of AI tools to
analyze this market in the form of consumption trends, attitudes,
preferences, and styles (Al-Zahrani and Marghalani, 2018 p.2).
Secondly, most people continue to be educated even in the poorest
countries, and subsequently, there is a general trend of rural-urban
migration. Most people migrate from rural areas to search for better
opportunities (education, employment, social amenities) in urban
areas. Since people in urban areas are likely to embrace technology, it
means that the population using technology is increasing rapidly.
These people will need to travel within the urban centers, eat-in cafes
or restaurants, purchase home items, and even clothes. Evidently,
continued urbanization, and embrace of technology is going to
increase the use of AI tools to analyze information about consumers..
Technological factors
It is possible to argue that AI has developed and continues to gain
prominence because the rapid advancement of technology. Firstly, it is
already mentioned that big data has necessitated businesses or
companies to develop AI tools to analyze, interpret, and make certain
inferences from the massive chunk of information. Big data has
emerged because most information is converted from analog forms to
a form that can be stored and interpreted by machines. With the
emergence of smartphones, people access a variety of information
about products, places, people, among other things. Mobile phone
manufacturing companies such as Apple and Microsoft are competing
incessantly to make superior models to woe their target customers.
Young people are mostly targeted because they are more technology-
savvy..
Far from computers and mobile phones, social media companies such
as Facebook, YouTube, Twitter, and Instagram have grown, and all
these sites have taken advantage of the enormous social media
subscriptions to advertise various products. According to Noonan and
Piatt (2015), there are more than 3.8 billion social media users in the
world. Consequently, many companies continue to explore these
channels to advertise their products. These companies not only focus
on selling their products but also by developing AI tools, which
analyze the number of people that visit their social media pages, the
kind of products they search, as well as how long they last on those
pages. The analysis of this information is not meant for storage; the
companies use it to innovate and develop a strategy. The most
important thing is that with increasing population and the penetration
of technology across communities all over the world, the number of
social media users will increase, and apart from using the sites for
advertising, companies will need to develop strategies using analysis
of various AI tools..
Environmental factors
Climate change currently is a significant concern throughout the
world. The media has become more vocal on the issue, and
consequently, more people are becoming conscious about their
environment. The increased awareness poses a significant challenge,
especially to businesses that do not observe various environmental
conservation measures. Even when such businesses use AI tools to try
and appeal to the target market, consumers may be influenced by
activists to boycott the products of companies that do not adhere to the
stipulated measures. A company such as Volkswagen was forced to
withdraw thousands of cars from the global market because of
excessive emission of fumes, and that resulted in the loss of millions
of dollars (Glikson et al., 2019 p.223). Various environmental
conservation organizations have toughened regulations on production
processes, and such stringent policies may affect how organizations
conduct business, and subsequently use various AI tools..
The various environmental concerns and regulations imply that
businesses, which adhere to the stipulated measures and are conscious
of their production and operations may witness high customer traffic,
which will consequently necessitate the use of AI tools to gather
important information and develop strategies that address their needs.
However, there is also competition among companies to try and meet
various environmental conservation obligations to get access to this
environmentally conscious market. To be able to develop various
strategies of adhering to the environmental conservation stipulations,
businesses need to collect information about various environmental
trends using AI tools, and that means that with increased awareness,
businesses will have to change their strategies continuously..
Legal factors
The first legal aspect that continues to shape the use of AI tools in
business is the creation and enforcement of intellectual property laws.
Various companies develop various AI tools, and business
organizations need to purchase them or seek permission before using
them. On the other hand, various business organizations need to hire
individuals with the necessary knowledge and skills to develop the AI
tools needed to manage information and develop a strategy. Therefore,
it is evident that the breach of the stipulated laws concerning patents,
copyrights, and other forms of intellectual property can be very costly
for businesses in terms of financial penalties, as well as the time lost
in legal battles. Most of the time, businesses involved in the
technology sector have been having legal tussles over copyright
issues, especially companies such as Microsoft and Apple..
The legal environment can also be viewed in a positive light,
especially concerning intellectual property. The stringent measures
that are meant to protect individuals, businesses, and organizations
from third-party unauthorized use of their AI tools for information
management ensure that these businesses benefit from their
innovations. Therefore, the legal environment has and continues to
help the growth of AI systems through the protection of people’s ideas
through punishing individuals who steal these ideas and use them for
personal gain. With robust legal systems, there is immense
opportunity in the development and use of AI tools in business in the
management of big data and the development of essential inferences
from it..
However, there may also be legal restrictions on the type of data or
information business entities collect about their target customers. The
United States Congress has variously summoned the management of
Facebook over allegations of data breaches. The biggest issue was
about the 2016 presidential elections, where Facebook was accused of
letting third parties have access to confidential information on their
users. The information collected was used to develop targeted
campaign messages that were designed to give a particular candidate
some leverage in the elections (Fuller, 2019, p.14). Although the
sending of targeted messages shows the potential of AI tools in
business information management and strategy developed, several
ethical issues are also raised. The most prominent ethical issue is that
some individuals may use personal information for other intentions far
from the business objectives. Some individuals within the business
organizations may be malicious and sometimes may collude with third
parties to intrude on the privacy of their customers. Therefore, most
countries have developed strict laws surrounding the protection of
sensitive customer information, and when any breaches occur,
business organizations may have to incur high financial penalties.
Therefore, it is essential for business organizations to be very cautious
on who accesses the information, and what measures they need to put
in place to protect the sensitive information..
Recommendations
Amazon was one of the first companies to use AI tools to drive its
product recommendations. Therefore, Amazon serves as a model
company in analyzing the potential of AI tools, especially in the
management of information, and how that information can be used to
boost business growth. Firstly, Amazon started purely as a bookselling
business but has rapidly grown to include many products, and at the
moment, it rivals large retail stores such as Wal-Mart. One interesting
thing about Amazon is that its business model is purely online.
Customers order various products online, and through the superior
delivery system, the company delivers the products to the doorsteps of
the customers. Amazon enjoys about 49 percent of the United States’
e-commerce market (Donici et al., 2012, p.1)). Such a share shows
that Amazon is the leading online retailer in the United States..
The success of Amazon’s e-commerce sector is mainly because of
how the company manages information using various AI tools.
According to Donici et al., (2012), Amazon takes data analysis of their
customers seriously. For instance, whenever a customer clicks on a
product but does not purchase it, such information is collected to
establish the reason it was not purchased. Based on such information,
the company develops a strategy to make the products more appealing
to the customers, and consequently influence them to purchase the
products (Donici et al., 2012 p.2). Artificial intelligence tools are also
used at Amazon to predict customer behavior and patterns. Whenever
a customer clicks on the Amazon application, they are likely to see a
list of suggestions of items. This list is usually compiled by the
various AI tools based on their previous purchase behaviors, and that
makes it easy for the customers to spot products and for the company
to influence the customers to purchase their products..
Based on Amazon’s success, various recommendations can be made.
Firstly, owing to the potential of AI tools in the business currently and
in the future, it is important for business organizations to adopt AI
tools that focus on analyzing information and increasing their sales.
Crucial information to be collected by such tools should be about
consumer preferences and habits. Once these aspects are known, the
AI tools can synthesize the information and suggest products to
customers that are commensurate with their preferences. Secondly, AI
tools in business should be developed with the analysis of
demographics in mind. Demographics are essential in understanding
population trends and composition. In such a case, the AI tools should
be able to generate data about the emerging markets, as well as those
which could probably be on the decline. That means AI tools need to
help a business avoid certain risks and, at the same time, explore
potential markets..
Thirdly, business organizations need to embrace technology more to
be able to enjoy the use of various AI tools. Businesses that still have
not digitized are missing out on the potential of AI tools in
synthesizing information and helping them to develop a strategy.
When businesses digitize, they get access to a lot of information. For
instance, potential customers will start visiting their sites. When AI
tools are embedded in these sites, businesses will learn about the
habits of consumers, and consequently, develop products that suit
them. Fourthly, it is important for businesses to operate within the
existing legal framework to enjoy the benefits of AI tools. While AI
tools offer limitless potential in innovation and strategy development,
wrong use can also put a business into trouble. It is necessary to avoid
confidential data breaches, and that calls for strict data protection
measures. The last recommendation is that businesses need to focus
on emerging markets with huge populations and high technology
penetration. These populations represent potential markets, and since
the penetration of technology means that people have acquired various
devices such as computers and smartphones, and can access the
internet, these are attractive markets for AI tools. The AI tools will
analyze various factors, and make certain inferences that will help the
specific businesses to develop strategy, innovate, and gain leverage in
their respective industries.
One of the opportunities most business organizations are missing from
is that this huge volume of data can be put to good use in the aspects
of analysis, prediction, and, ultimately, the development of essential
solutions. The maxim that information is power needs to apply to the
use of big data. For a long time, most business organizations have
relied on humans to analyze data, interpret it, and make crucial
decisions. Companies have also incurred large sums of money to train
employees or even hire employees with the necessary skills to gather
information in order for businesses to develop strategies. On the same
note, some businesses or companies send their employees overseas to
learn about the trends of consumers or potential clients in the foreign
countries, and it is quite common currently to hear about the
importance of understanding the diverse cultures around the globe, as
well as buying habits of people from the diverse cultures. However,
most of these aspects can be learned using computer algorithms,
developed and interpreted by Artificial Intelligence (AI) systems. To
be precise, the AI systems can make various inferences from the big
data, which most business organizations are ignoring or depending on
third parties to manage..
AI is a novel concept that refers to automated technological systems,
which are used in diverse aspects to make operations easier, as well as
to improve the outcomes of various processes. In this context, the
analysis will only focus on the use of AI systems in the management
of the massive volume of information generated currently in the
business environment to foster innovation and develop a strategy.
Although human beings are still important in the operation of
businesses, and it is also not expected that AI systems will replace
humans entirely, the volume of information generated in the modern
business environment cannot be managed and interpreted by human
beings easily (Soni et al., 2019 p.11). Therefore, the use of AI systems
will make the interpretation of this information easier, and
consequently facilitate the innovation and strategy development
process..
Analysis
Definition
According to De Mauro (2015), artificial intelligence refers to “the
ability of a machine to learn from experience and perform tasks
normally attributed to human intelligence, for example, problem-
solving, reasoning, and understanding natural language” (98). In the
context of business information, the application of AI would refer to
the ability of these machines to perceive the big data, analyze this
data, and make specific inferences from it..
PESTEL Analysis
This section mainly describes the various factors that may affect the
adoption of artificial intelligence in the management of information
and the development of strategy in business by a business.
Conventionally, PESTEL illuminates political, Economic, Social,
Technological, Environmental, and Legal factors that may affect the
operation of a business. In this context, these factors focus on how AI
technologies may be affected in business..
Political factors
The political factors that may affect the adoption of AI systems are
quite diverse. The first factor concerns the level of political stability.
Before a company decides to invest in a particular country, they need
to ensure that the environment is conducive for business operations. If
a company cannot operate or set up business in a particular region of
the globe, it means that the development of AI systems will not be
realized. Since this essay focuses on the opportunities offered by the
development and use of various AI tools in business, an unstable
political environment implies that the tools could not be used
altogether. A politically unstable market or country also affects the
collection of information. When people are displaced or do not have
predictive buying patterns, then such a group of people forms an
unreliable market, and it is a waste of time for a business to focus its
resources on such a market. Closely related to political stability is the
integrity of politicians, and their likelihood to engage in acts of
corruption. The consequences could be possible impeachments or
resignations of high-level government employees who may be quite
skillful. If such employees resign and could be knowledgeable in the
implementation of various AI systems, then their penetration could be
derailed..
Another political factor relates to the various policies that the
government creates in relation to business operations. For example,
most countries in the Arab world, or precisely, Muslim countries have
policies on the sale and purchase of alcohol. Indeed, companies that
deal with the sale of alcohol may not find the use of AI systems to
manage and analyze information not very useful in such countries.
Perhaps the most prominent political policies that may hinder the
penetration and use of AI tools in business are those concerning the
penetration of the internet, especially social media. In the current
world, many companies have taken advantage of the internet, and
social media, in particular, to advertise their products, monitor
consumer trends, and predict their purchase trends. However, some
oppressive regimes prohibit the use of certain technologies. A good
example is a country such as North Korea that does not allow the
public to use the internet or to get connected to networks that have a
global reach. Therefore, such countries present an impediment to
access to information and the use of AI technologies to analyze
information..
The proper political aspect that favors the use of AI tools in business
is the rapid pace at which many countries are embracing technology.
Currently, most developing countries in Africa, Asia, and South
America have social media networks, and various leaders do not feel
much threatened with people interacting on these sites. On the same
note, countries are also investing heavily in the development and
proliferation of technology. The objective of such a massive
investment is that technology will create efficiency and improve
people’s access to critical information. A continent like Africa, which
for a long time, has been perceived to be backward currently is
involved in efforts to increase internet penetration. According to a
study, there are more than 525 million internet users in Africa
(Ngesah, 2005, p.11). Such statistics represent crucial information to
companies that seek to expand their operations to Africa, for instance..
Through the use of AI data analysis tools, business organizations can
analyze the demographic composition of these users, the amount of
time they take on the internet, as well as the kind of information these
people search on the internet. These people could search for
information related to various products. AI tools in business are
designed to gather such information (the type of products people such,
as well as their preferences). The most important issue here is that as
governments throughout the world continue to allow internet
penetration and other innovations related to technology spread, AI
systems gain much prominence because companies get access to more
information as a consequence of the large number of people accessing
the internet..
Economic factors
One of the factors that affect the use of AI tools in any country relates
to the economic system in operation. For instance, a monopolistic
economic system may discourage the use of AI tools in business
information management and strategy development. A country like
North Korea has the state running almost all businesses. One of the
industries most affected is the media industry because the state
controls all information that people receive. A company using AI tools
in such an industry would have analyzed information such as the
number of viewers, as well as, their demographics. Consequently, that
information would have been used to innovate and develop a strategy
aimed at appealing to the target market. However, in industries that
have monopolies, it is challenging to use AI tools to analyze
information because entry into the industry is restricted..
Nevertheless, most markets in the current world are liberal, and
virtually in almost every venture, there is competition. Competition
makes the use of AI tools very necessary because businesses will
inevitably try to analyze the market and become innovative to outdo
one another. Therefore, the growth of AI tools will be exacerbated by
a challenge; stiff competition (Kok et al., 2009 p.1). Businesses will
need to analyze important information about consumers in order to
take them customer-specific adverts or make products that are tailored
towards solving their needs. Additionally, an essential economic
factor relates to the GDP of a country, and the measures the economic
development of a country. While AI tools seem to be more suitable in
developed countries such as the United States, and a majority of those
in Europe, developing countries in Africa, Asia, and South America
are also expanding their economies, and with the improvement in
people’s standards of living, their purchase power also rises.
Therefore, AI tools in business will focus on diverse markets
throughout the whole world, and the data generated will help decide
where to invest and what to invest..
Social factors
According to Noonan and Piatt (2015), the demographics of a
population, which means the respective genders and ages of a
population, primarily affects the decision whether a product may be
marketed to the population. For example, makeup products are mostly
targeted to women, and that means people using AI tools to project
purchase trends for such products will mainly focus on women.
Secondly, the class distribution among a certain population will also
be important in developing AI tools that generate information and
foster innovation of products, which are directed at the different
classes. For example, in the United States, Wal-Mart mainly focuses
on the low-income earners, while a retail store such as Costco focuses
on the affluent (Marcilla, 2014 p.6). Therefore, in terms of targeting,
these two retail stores collect different information using various AI
tools. The last crucial social factor is the education level of various
consumers. Most educated people have embraced technology and
could prefer convenience over other hustles. For example, most
educated people live in urban centers, are likely to use Uber car
services, may order products online, and have them delivered to their
doorsteps..
Looking at the opportunities of the various social factors, it is
important to start with a demographic factor such as age. Young
people seem to have embraced technology more compared to adults,
and for developing countries, especially in Africa, young people form
the majority of the population. Since young people are more
technology-savvy, this shows the potential of the use of AI tools to
analyze this market in the form of consumption trends, attitudes,
preferences, and styles (Al-Zahrani and Marghalani, 2018 p.2).
Secondly, most people continue to be educated even in the poorest
countries, and subsequently, there is a general trend of rural-urban
migration. Most people migrate from rural areas to search for better
opportunities (education, employment, social amenities) in urban
areas. Since people in urban areas are likely to embrace technology, it
means that the population using technology is increasing rapidly.
These people will need to travel within the urban centers, eat-in cafes
or restaurants, purchase home items, and even clothes. Evidently,
continued urbanization, and embrace of technology is going to
increase the use of AI tools to analyze information about consumers..
Technological factors
It is possible to argue that AI has developed and continues to gain
prominence because the rapid advancement of technology. Firstly, it is
already mentioned that big data has necessitated businesses or
companies to develop AI tools to analyze, interpret, and make certain
inferences from the massive chunk of information. Big data has
emerged because most information is converted from analog forms to
a form that can be stored and interpreted by machines. With the
emergence of smartphones, people access a variety of information
about products, places, people, among other things. Mobile phone
manufacturing companies such as Apple and Microsoft are competing
incessantly to make superior models to woe their target customers.
Young people are mostly targeted because they are more technology-
savvy..
Far from computers and mobile phones, social media companies such
as Facebook, YouTube, Twitter, and Instagram have grown, and all
these sites have taken advantage of the enormous social media
subscriptions to advertise various products. According to Noonan and
Piatt (2015), there are more than 3.8 billion social media users in the
world. Consequently, many companies continue to explore these
channels to advertise their products. These companies not only focus
on selling their products but also by developing AI tools, which
analyze the number of people that visit their social media pages, the
kind of products they search, as well as how long they last on those
pages. The analysis of this information is not meant for storage; the
companies use it to innovate and develop a strategy. The most
important thing is that with increasing population and the penetration
of technology across communities all over the world, the number of
social media users will increase, and apart from using the sites for
advertising, companies will need to develop strategies using analysis
of various AI tools..
Environmental factors
Climate change currently is a significant concern throughout the
world. The media has become more vocal on the issue, and
consequently, more people are becoming conscious about their
environment. The increased awareness poses a significant challenge,
especially to businesses that do not observe various environmental
conservation measures. Even when such businesses use AI tools to try
and appeal to the target market, consumers may be influenced by
activists to boycott the products of companies that do not adhere to the
stipulated measures. A company such as Volkswagen was forced to
withdraw thousands of cars from the global market because of
excessive emission of fumes, and that resulted in the loss of millions
of dollars (Glikson et al., 2019 p.223). Various environmental
conservation organizations have toughened regulations on production
processes, and such stringent policies may affect how organizations
conduct business, and subsequently use various AI tools..
The various environmental concerns and regulations imply that
businesses, which adhere to the stipulated measures and are conscious
of their production and operations may witness high customer traffic,
which will consequently necessitate the use of AI tools to gather
important information and develop strategies that address their needs.
However, there is also competition among companies to try and meet
various environmental conservation obligations to get access to this
environmentally conscious market. To be able to develop various
strategies of adhering to the environmental conservation stipulations,
businesses need to collect information about various environmental
trends using AI tools, and that means that with increased awareness,
businesses will have to change their strategies continuously..
Legal factors
The first legal aspect that continues to shape the use of AI tools in
business is the creation and enforcement of intellectual property laws.
Various companies develop various AI tools, and business
organizations need to purchase them or seek permission before using
them. On the other hand, various business organizations need to hire
individuals with the necessary knowledge and skills to develop the AI
tools needed to manage information and develop a strategy. Therefore,
it is evident that the breach of the stipulated laws concerning patents,
copyrights, and other forms of intellectual property can be very costly
for businesses in terms of financial penalties, as well as the time lost
in legal battles. Most of the time, businesses involved in the
technology sector have been having legal tussles over copyright
issues, especially companies such as Microsoft and Apple..
The legal environment can also be viewed in a positive light,
especially concerning intellectual property. The stringent measures
that are meant to protect individuals, businesses, and organizations
from third-party unauthorized use of their AI tools for information
management ensure that these businesses benefit from their
innovations. Therefore, the legal environment has and continues to
help the growth of AI systems through the protection of people’s ideas
through punishing individuals who steal these ideas and use them for
personal gain. With robust legal systems, there is immense
opportunity in the development and use of AI tools in business in the
management of big data and the development of essential inferences
from it..
However, there may also be legal restrictions on the type of data or
information business entities collect about their target customers. The
United States Congress has variously summoned the management of
Facebook over allegations of data breaches. The biggest issue was
about the 2016 presidential elections, where Facebook was accused of
letting third parties have access to confidential information on their
users. The information collected was used to develop targeted
campaign messages that were designed to give a particular candidate
some leverage in the elections (Fuller, 2019, p.14). Although the
sending of targeted messages shows the potential of AI tools in
business information management and strategy developed, several
ethical issues are also raised. The most prominent ethical issue is that
some individuals may use personal information for other intentions far
from the business objectives. Some individuals within the business
organizations may be malicious and sometimes may collude with third
parties to intrude on the privacy of their customers. Therefore, most
countries have developed strict laws surrounding the protection of
sensitive customer information, and when any breaches occur,
business organizations may have to incur high financial penalties.
Therefore, it is essential for business organizations to be very cautious
on who accesses the information, and what measures they need to put
in place to protect the sensitive information..
Recommendations
Amazon was one of the first companies to use AI tools to drive its
product recommendations. Therefore, Amazon serves as a model
company in analyzing the potential of AI tools, especially in the
management of information, and how that information can be used to
boost business growth. Firstly, Amazon started purely as a bookselling
business but has rapidly grown to include many products, and at the
moment, it rivals large retail stores such as Wal-Mart. One interesting
thing about Amazon is that its business model is purely online.
Customers order various products online, and through the superior
delivery system, the company delivers the products to the doorsteps of
the customers. Amazon enjoys about 49 percent of the United States’
e-commerce market (Donici et al., 2012, p.1)). Such a share shows
that Amazon is the leading online retailer in the United States..
The success of Amazon’s e-commerce sector is mainly because of
how the company manages information using various AI tools.
According to Donici et al., (2012), Amazon takes data analysis of their
customers seriously. For instance, whenever a customer clicks on a
product but does not purchase it, such information is collected to
establish the reason it was not purchased. Based on such information,
the company develops a strategy to make the products more appealing
to the customers, and consequently influence them to purchase the
products (Donici et al., 2012 p.2). Artificial intelligence tools are also
used at Amazon to predict customer behavior and patterns. Whenever
a customer clicks on the Amazon application, they are likely to see a
list of suggestions of items. This list is usually compiled by the
various AI tools based on their previous purchase behaviors, and that
makes it easy for the customers to spot products and for the company
to influence the customers to purchase their products..
Based on Amazon’s success, various recommendations can be made.
Firstly, owing to the potential of AI tools in the business currently and
in the future, it is important for business organizations to adopt AI
tools that focus on analyzing information and increasing their sales.
Crucial information to be collected by such tools should be about
consumer preferences and habits. Once these aspects are known, the
AI tools can synthesize the information and suggest products to
customers that are commensurate with their preferences. Secondly, AI
tools in business should be developed with the analysis of
demographics in mind. Demographics are essential in understanding
population trends and composition. In such a case, the AI tools should
be able to generate data about the emerging markets, as well as those
which could probably be on the decline. That means AI tools need to
help a business avoid certain risks and, at the same time, explore
potential markets..
Thirdly, business organizations need to embrace technology more to
be able to enjoy the use of various AI tools. Businesses that still have
not digitized are missing out on the potential of AI tools in
synthesizing information and helping them to develop a strategy.
When businesses digitize, they get access to a lot of information. For
instance, potential customers will start visiting their sites. When AI
tools are embedded in these sites, businesses will learn about the
habits of consumers, and consequently, develop products that suit
them. Fourthly, it is important for businesses to operate within the
existing legal framework to enjoy the benefits of AI tools. While AI
tools offer limitless potential in innovation and strategy development,
wrong use can also put a business into trouble. It is necessary to avoid
confidential data breaches, and that calls for strict data protection
measures. The last recommendation is that businesses need to focus
on emerging markets with huge populations and high technology
penetration. These populations represent potential markets, and since
the penetration of technology means that people have acquired various
devices such as computers and smartphones, and can access the
internet, these are attractive markets for AI tools. The AI tools will
analyze various factors, and make certain inferences that will help the
specific businesses to develop strategy, innovate, and gain leverage in
their respective industries.
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