Google is one of the most used search engine throughout the world and has the answer to almost everything one needs to know. This is how the people as a brand recognize Google. It is famous for its internet search. With thirteen years of operation, the company has evolved drastically with a huge brand name and recognition among its users. The company presently owns about seventy percent of the total search-taking place in the internet. Such a success of the company is due to their effort and utilization of the competencies of the business. In the financial performances, as well the Google has proved itself the most profitable company in the world. This has helped the company to increase its competencies even more. The competencies of the company also depend on the innovation and advantage that it takes of its resources. The company has maintained a strong organizational structure throughout these thirteen years and this has helped the company to grow successfully (Google, 2017). The paper discusses about the external and internal environment of Google that effects its growth and development. Further, it analyses the strategy that the company has used in their corporate, business level to achieve all its goals to become a competitive company.
The industry in which Google is involved is an Information Technology industry that offers all types of information to the viewers visiting the site. Google has been one of the most preferred search engines in the world. Information technology is one of the fastest growing industries globally making it possible for Google to grow at the same pace as the industry. This is because the growing nature of the industry has led to an increase in competition in the industry.
United States is politically a well stable economy in the world, which makes it a suitable place for any business to operate. It is highly dominate both republic and Democratic Party (FocusEconomics, 2017).
Economically United States is one of the most developed countries in the world with the GDP of around $18.46 trillion in 2016. The country also has very high standard of living and is considered as the seventh highest per capita GDP in the world (FocusEconomics, 2017).
Socially and culturally, the country is well developed and modern. The country maintains the independency of the individuals living there and is highly competitive in every aspect (Country Comparison – Hofstede Insights, 2017).
United States is considered as one of the most technologically advanced nation. This is due to increasing industrialization in the country with high capital availability and increase usage of information technology.
The country offers a huge labor freedom and business freedom to help any industry to start its business easily in the country without much restriction (Bargain et al., 2015).
Threats from the environment are increasing in the country due to growing industrialization. The country has thus taken various environmental policies to guide the business to use environmental friendly technologies.
United States is considered as the third populous country in the world with most of the population residing the urban region and are educated. They have equal proportion of male and female in the country (Coale & Zelnik, 2015).
The above analysis it can be seen that the external environment of United States in which Google operates offers a huge number of threat as well as opportunities for the business. Threat that the company owns from its external environment is the strict environmental laws in the country, which require them to design their technology carefully. The country offers a huge opportunity to the business because of it high GDP growth and high technological development.
Threat from new entrants
Information technology industry offers low threat from new entrant as new companies cannot easily enter the industry. This is because it requires a lot of expertise and capital investment initially to enter the IT market (Aithal, 2016).
Threat of substitutes
Threat from substitutes for an IT industry is moderate due to constraints in finding information from physical library. This is because customers prefer internet search more than searching in the library.
Rivalry among firms in information technology is high even though Google offers tough competition to other companies such as Bing, Apple, Microsoft and Yahoo. Every company try to take continuous innovation in order to survive the tough competition.
Bargaining power of supplier
Bargaining power of the supplier in the information technology industry is low. This is because the suppliers do not want to lose business from such big clients such as Google.
Bargaining power of buyers
Bargaining power of buyers are moderately high because the customers can easily change from one company to other for their search and other needs. Moreover, the customers do not have any switching cost to choose other company than the other.
From the above analysis, it can be seen that Google has the opportunity of increasing their market share in the industry due to low threat from new entrant. However, it might face threat from customers due to availability of competitors (Dobbs, 2014).
Google face competition in the information technology market from Bing and Yahoo. Google holds 63.8 percent of the market share in United States and the other two competitors holds only 33.5 percent. Even though the company experiences low threat from its two credible competitors, yet it faces tough competition in other spheres. Recently, the company has come up with a new competitor such as Amazon. Bing and Yahoo are similar search engines like yahoo. However, Amazon offers threat to Google by taking away the market of product search. The competition Yahoo offers Google is by offering a meaningful internet search o the customers in few years. Yahoo allows the user to turn their portal into their personal online search engine by saving the pages they want to view. Other competitors are Microsoft and Apple that offers software services for businesses. This offers threat to Google by taking away its market share in the search engine market as well as in other services it offers (Google, 2017).
The resources of the firm are mainly intangible assets such as app development. Software services, web search, mobile technology are some of the services and intangible assets that the company offers. The company also own tangible assets in the form of human resource such as the CEO and other board directors of the company that looks after most of the management activities of Google. The company uses high technology in advertising and app development activity. The company held total sales of $23,651 million in 2009 from various services. It holds about seventy percent of the total internet search of the world (Google, 2017). On the other hand the sale of the company according to the geographic coverage is the same as the sales in the operating segment. Google too takes various research and development in various fields to fight competition in the industry. Thus for the company innovation is a key both for the success and survival of it in the industry. The company invested $2,843 million in research and development in 2009. This has helped the company to maintain good reputation in the information technology industry (Google, 2017).
The company gathered various types of capabilities by acquiring various sites such as Blogger, Picasa, Keyhole and others from the day it started in the business. This has helped the company to gain a lot of capabilities over the years of its operation. The main capabilities that the company has acquired are in various fields such as web search, app development and mobile computing. The web search that Google offer to the visitors is an indispensable feature that has taken over the internet. Through Google apps the company offer cloud computing tools that comprise various apps, which are company acquired, and they personally develop some. Some of the example of apps that comes under Google’s capabilities is Gmail, Google Docs, Google calendar and some social networking sites such as Orkut, Reader and Talk. Lastly, mobile computing is developed by Google, which is regarded as the future of internet and mobile technology (Google, 2017).
The core competencies that the company holds in the market are the internet search facility that it offers. From the other capabilities such as mobile computing, app computing, Google holds it is in the search engine business that it run. Google is considered as one of the most important service that it offers. Thus, the company hires highly capable engineers and programmers for making the research result and ranking of the page relevant. Thus, the company devotes more resources and time to the web search activity then the other products. The search that Google offers can be done in 130 languages, which makes it very convenient for people from any origin to find their desired result (Google, 2017). This is a rare service of Google that has helped them offer different service then other companies. The company holds a core competency in owning domains of 160 countries and regions all around the world. it is valuable because it has helped the company to attract customers through the search engine service. The search service that it offers is costly to obtain and thus it is not easily substitutable by any other company (Zeenews, 2017).
|
Inbound logistic |
Outbound Logistic |
Operations |
Marketing & Sales |
Services |
|
• Investors that offers fund to the company • Employees that help in production in the business • Advertising investors that assist in marketing the product of the company • The senior management team that manages the task of the company • Acquisitions by the business such as Bloggers and Picasa |
· Enable we search for the viewers from all type of fields · Displaying advertisements of companies and business · Launching new apps known as Google apps from time to time · Offering Google Smartphone developed with the help of OHA |
· Google search functionality is the initial operation of Google by creating search results and ranking of the pages · Try to balance the revenue coming from the advertisements from various consumers · Formulate cloud computing tools through Google Apps · Mobile computing activities |
· Does marketing through Google Ad words and AdSense · Advertise banner ads for their Google map app |
· Offers mailing services · Storage services through cloud computing technology · Google maps to help give direction to people · Search services through Google web search |
Table 1: Value Chain Analysis
Source: (Olson, 2014).
|
Firm Infrastructure |
Human Resource Management |
Procurement |
Technology |
|
· Cloud Computing infrastructure · Networking infrastructure of Google · Hardware and software products |
· Employees of the company that help in offering services and products · The management team that manages the activities · Engineers and programmers that design the programs |
· Acquired companies such as Blogger and Picasa to help develop their own apps · Procured Open Handset Alliance for helping them launch android mobile phones |
· Cloud computing technology · Networking technology · Server hardware such as with Dell, HP and others · Bandwidth technology for transferring data |
Table 2: Value Chain Analysis
Source: (Gereffi & Fernandez-Stark, 2016)
From the above analysis, the strength and weaknesses of the company can be concluded. Thus, refer to appendix one for further details about strength and weaknesses of Google.
The company takes various strategies from time to time to fulfill its goals and to become a successful organization. The company to meet with the challenges that occurs from time to time also does it. Business level strategy that the company takes includes the internal structure of the organization, the management activities, the leadership styles and others. This is done to maintain professionalism in the organization and for successful management of various operations (Rothaermel, 2015). Company holds a good and efficient management team at the higher level. This is because the success of the company has been largely dependent on its leaders. The CEO of the company has always been critical for Google from the tie it has started. The company has always focused at innovation and great ideas to enter the market in order to offer rare services. The company has always wanted to become the most important and useful search engine. This goal of the company has helped it to become one of them in recent times. Moreover, the company has also targeted other markets such as the android market, the apps market and the software market. It has always aimed to enter the life cycle market by bringing diversities in their operations and delivery. The company has always operated with the strategy of taking investments from huge investors. The first investment that the company received while starting its operation was of $100,000 and some of the investment came from the advertising revenues. Thus, Google has always used the strategy of utilizing the revenue that it receives from the advertising from its AdWords and AdSense. The company has also adopted the most specialized and expertise programmers from all over the world to develop its products and services (Google, 2017).
Corporate level strategies include the strategies that the company uses for its external partners and external environment to facilitate the operation and other activities of the business in their internal environment (Hill, Jones & Schilling, 2014). The first corporate level strategy it took was to form acquisition with other companies and websites to help them assist in the development of the apps. In order to deal with the competitive environment that Google faced it was necessary for the company to design such a corporate level strategy. In the search engines, the company has adopted various key areas that are comprehensive and relevant. The company has always focused on continuous advancement in the search engines such as making it easier, easy to access and others. In its advertising activity, the company has always strategized its activity by offering cost effective, relevant and targeted ads. For the purpose, the company has formed AdWords and AdSense that facilitating its advertising work and has been one of the best products of Google. For improving its information technology offering that is the main activity of the company, it has introduced various apps from time to time (Google, 2017). The company has also drawn strategy in the mobile market as well in which it forms the android handsets that proved to be a remarkable success (Arasti, Khaleghi & Noori, 2017). In this field, as well the company distributes free operating system to the manufacturers of the handsets. Further, the company has always involved itself and used its profit in research and development to allow innovation in the industry. These are the strategies used by the company at the corporate level so that it can be successful in the industry and fight out competition effectively. Google has offered a tough competition in its online search market that has put back other companies like Microsoft, Apple and others (Google, 2017).
Acquisition is yet another strategy the company has followed since beginning that has led to their success and proper implementation of ideas in the software market. The first acquisition that the company took was while implementing and formulating the application. The acquisition happened when Goggles took over companies like Blogger, Picasa, Keyhole, Writely to help them design various application that the company wanted to introduced. These acquisitions helped in various activities such as Picasa helped in developing Photoshop apps, Blogger helped the company to develop web blogging software. Other acquisitions are YouTube and Writely that helps in forming videos and document editing respectively. Such acquisition has facilitated the company to be successful in four major areas such as web search, advertising and app development (Greve & Zhang, 2017). Other acquisition was the codes that the company took such as North American Industry Classification and Standard Industrial Classification. These codes helped the company to deliver all type of facilities and products. In the age of internet, such technology advancement and acquisition strategy adopted by the company has helped them to develop in a better way and enter the new market sphere every now and then. Information technology industry is growing at a faster rate and such acquisition is important for the company to take the success of other companies and use it for the betterment of Google. In total Goggle has been able to acquire over hundred companies such as Motorola, YouTube and others for spreading and increasing its services (Google, 2017).
Along with acquisition, the company has also used cooperative and merger strategy to cope up with their challenges and enter the market that it has not entered initially. Such strategy has helped the company to take up various activities in which it was not efficient. One of the cooperative strategies that the company took was forming cooperation with Open Handset Alliance (OHA) that develops android, which is a mobile operating system. This enabled Google to form an open and free platform for the mobile users. The company to compete with Apple and other mobile companies like Microsoft did this by enabling formation of apps that the consumers can purchase from the third party. Other companies such as Motorola, HTC and others also joined in the merger with OHA to form the mobile system called Android (Google, 2017). The Android feature of Google has enabled them to introduce the flash feature in their mobile which is not even offered by Apple. Android made sure in their next launch they introduce flash as well as the other advanced Microsoft features. Along with this the companies cooperates with other companies that involves in various research and development activities on behalf of Google (Ferris, Jayaraman & Sabherwal, 2013). This has helped the company to carry out successful research and innovation by estimating their weakness and areas that are lacking. Cooperative strategy has thus been beneficial for the company in many ground s along with being cost effective (The Economic Times, 2017).
The company that exists worldwide and runs its business in almost all the countries has initially taken various international strategies as well in order to make its existence at every possible region. Even though the company is still expanding its market yet the brand value and recognition that it has created is due to the initial international strategy the company took for expansion (Verbeke, 2013). One of the international strategies that the company used to expand globally is the strategy of entering the Android market. Android market has been increasing initially with a large number of companies coming up with Smartphone all over the world. Thus, Google decided to enter the international market with its new Smartphone product that is in great demand nowadays. However, the company proved to be very successful in this strategy by conquering the market with its Android phones. Other strategies are the browser and web search formulated by the company such as Google Chrome, Gmail ad others are made available in 130 different languages. Thus, it will help everyone around the world to browse and search any information that the viewers want easily in their own language. This shows that the company wants to expand globally by aiming all the potential countries sin the world. The company has also been able to own the domains of more than 160 localized nation and regions of the world (Google, 2017). The cloud computing system of Google has also help the company to collect a store data from any place of the world making the globe a smaller place to deal with. Its web search facility is the most important way to join the world where the viewers can learn about anything they want from all around the globe. Google took some of these strategies in order to expand internationally and take up the overseas market with its cooperation and acquisition (The Economic Times, 2017).
Conclusion
From the above discussion, a conclusion can be stated that Google has been successful in everything that it has done such as strategies, expansion, value acquisition and others. The company has emerged from a small software developing company by acquiring some company to facilitate its app development to a big giant n the information technology industry. The company has used a lot of strategies in its business as well as corporate level such as formulating internal organizational structure and external partnership. The company has also followed continuous acquisition and merger with other companies in their software development, Android development and other activities. This has helped the company to enter the domestic as well as international market with the most valuable strategies. It has enabled the company to take the advantage of other company’s strength and utilize it for their own weaknesses. The company also maintains a strong management and leadership team in the organization to look after every task that the company is doing. This has helped the company to grow continuously over thirteen year. These strategies of the company have helped Google to survive and give tough competition in this tough competitive environment of Information Technology industry. This can be seen from the strength and opportunities that the company has achieved over the past few years. Further, it was seen that the external environment of United States has helped the company to develop the software and product it wanted to because of the technology development of the country.
References
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