Strategic Analysis Of Google Inc.: PESTEL & Five Forces Analysis

Introduction

The organization, Google Inc. is an American multinational organization, which specializes in internet related services, like development of online advertising technologies, cloud computing and software creation. The organization was set up in the year 1998 and since then the growth of the organization was based on the continuous improvements and innovations in the processes and the service offerings of the business (Choi  & Varian,  2012). On the other hand, the rapid growth of the organization is based on the diverse chain of products as per the needs of the customers and different acquisitions that are made by the organization. The different offerings  like  Google Docs, Sheets, Slides, email, scheduling and time management, cloud storage and social networking has helped in maintaining the uniqueness of the organization in the market (Verma et al., 2015). The operations that are undertaken by the business have helped in establishing the same as a technology giant.

PESTEL analysis of the organization

Political	· Rapid globalization has helped in enhancing the position of the organization. The utilization of different technologies by other organizations is supported through the product and service offerings of Google. Therefore, the growth of globalization has helped in the continuous growth of Google based on the change in professional needs of other enterprises (Kohlhoff et al., 2014). Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper · Stable political climate in most of the markets in which Google operates has helped in the unrestricted growth of the business and its expansion. · The state- sponsored online companies pose a serious threat to the market entry policies that are undertaken by Google. In different countries like China, the state governs the utilization of the online companies (Lazer et al., 2014). It thereby restricts the market entry strategy that might be undertaken by Google.
Economic	· The global economic stability has helped in the wide growth of Google while operating in the international markets. It has helped the organization in undertaking the processes more dynamically in the different national outsets. · Rapid growth of the developing economies has helped Google in spreading their venture dynamically.
Social	· The growth of the social media has posed a serious threat to the operations of the business as it facilitates companies like Facebook, which offers online advertising services (Choi  & Varian,  2012). · The rising diversity of the users has helped the organization in proposing diverse services and products.
Technological	· The growth of the internet access in the developing economies will be helping Google in spreading their services widely. It has helped in creating new marketing scopes for the business.
Environmental	· The growing interest of the sustainable businesses has helped Google in proposing their products and operations for undertaking the smart act objective of the emerging businesses (Kohlhoff et al., 2014).
Legal	· The different policies on the online privacy will be helping Google to safeguard the interests of the stakeholders. On the other hand, the adherence to the different privacy policies will be helping the organization in undertaking an ethical business.

Conclusion

Therefore, from the above analysis it might be stated that Google faces different opportunities of market growth while operating in the different market considerations. However, the growth of the social media platforms posed a serious threat to the growth of the organization. Moreover, the state owned online organizations also affected the market entry channels of Google in the diverse economies.

Porter’s Five Force Analysis of Google

Competitive rivalry	· Large number of firms in the market (Strong) The presence of large number of competitors in the market has enhanced the market competitiveness for Google. The innovations that are undertaken by Google has helped the business to sustain in highly competitive market structure (Dua, 2014).    · Lower switching costs (Strong) The lower switching costs for the users posed a serious threat for the organization. It has enabled the organization to undertake a strong quality management team for retaining the loyalty of the customers of the business (Dua, 2014).
Bargaining power of the buyers	· Small size of individual buyers (Weak) A small portion of the individual buyers contributes to the customer base of Google while operating in the diversely competitive market structures. Therefore, it is considered to be a weak force for ascertaining the company’s revenue system. · Quality of information is moderate (Moderate) The moderate quality of information that is delivered to the users has helped the business in maintaining a competitive advantage over the other companies (Dul?i?, Gnjidi? & Alfirevi?,  2012). Very less data on the processing and activities of the organization is delivered to the clients, which has created a situation of semi- lockage of information.
Bargaining power of suppliers	· Large population of suppliers (Weak) The large population of the suppliers denotes the diversity of products and the services that are developed by Google.  The large population of buyers has helped the organization in selecting and switching from one supplier to another based on the needs of the organizational growth.
Threat of substitutes	· Moderate to high availability of substitutes in the market (Moderate) The different moderate options that is available to consumers for switching from Google to other online service providing organizations has posed a serious threat to the organizational functioning.
Threat of new entrants	· Higher costs of brand development (Weak) The higher cost of brand development will be affecting the market entry rate of the new entrants. The significant growth of the organizations in the competitive businesses is based on the higher rates of investments that are required to be undertaken by the businesses in order to startup a venture (Fitzpatrick, Nguyen  & Cayan,  2015). · Regulatory requirements (Strong) The emergence of the regulatory requirements has affected the growth of the network providing organizations   while operating in the international markets.

Conclusion

Therefore, from the analysis it might be stated that Google Inc. faces a strong competition in the market through the emergence of different companies offering the same services.  On the other hand, the weaker bargaining power of the buyers is due to smaller size of the individual buyers in the market. The weak bargaining power of the suppliers is characterized by the larger amount of suppliers in the market and heightened competition of the same. It has helped in maintaining different changes in the processes of the business while operating in the international markets. The threat of substitutes is characterized by the lower switching costs which poses a serious threat to the performance of Google. On the other hand, the threat of new entrants in the market is negated through the higher costs of creating brand recognition. The porter’s five force analysis is undertaken with the view of identifying the prospects of Google while operating in the diverse markets.

SWOT analysis of Google

Strengths · Dominance of search engines · Reputed brand name of the organization · Creation of revenue from online advertisements · Innovation in the android and mobile technologies	Weaknesses · Falling rates of advertisements due to emergence of social media platforms like Facebook, Twitter (Brooks,   Heffner & Henderson,  2014). · Lack of proper compatibility with next generation devices
Opportunities · Promotion of non-Ad business models for the growth of the organization · Creation of  cloud computing technologies · Innovation in the android technologies	Threats · Rising competition from the emergence and growth of the social networking platforms like Facebook, Twitter

The strengths of the organization is based on the technological innovations that are undertaken by the organization to optimize their search engine. The continuous innovation has helped the business in maintaining superiority in the international markets. On the other hand, the success of the androids through continuous innovation and widely accepted in the cell phones market (Verma et al., 2015). The creation of revenue from the online advertisements has helped the organization in promoting diversity in the services and the products proposed by the same. However, there are weaknesses that are faced by the organization relating to the emergence of social media platforms, which also supports online advertising for the organizations. It has brought about competition in the markets. The lack of proper compatibility within the next generation devices has affected the market consideration of Google. However, the organization has different opportunities, which will be based on the innovation of the new processes. On the other hand, the growth of the social media platforms has affected the business due to the competition in the online advertisement markets. Google undertakes the PPC (Pay Per Click) advertisements, which are now  featured in Facebook thereby creating a competitive market situation for the concerned company. It has affected the proper functioning of the business undertakings (Salar  & Salar,  2014).

PESTEL Analysis

Conclusion

Therefore, from the above analysis it can be stated that the processing of the systems of the business operations are based on the continuous innovations in the androids and non -Ad models. It will be creating lucid prospects for the growth of the business. On the other hand, the introduction of diverse lines of [products and services by the organization has helped in maintaining the different modifications in the situation of Google in the market.

Value chain analysis of Google

Google’s inbound logistics- The organization generates the greatest value as per the inbound logistics of the firm is concerned. The core business of the organization is based on the effectiveness of the search engine as the list of results that are provided to the users while undertaking a search can be counted as the product offering of Google. The organization utilizes different technological innovations in order to support the systems of the business.

Google operations- The introduction of algorithm and the different advancements in the technological aspects has helped to undertake the different changes (Berg  & Kilambi,  2014). The infrastructural growth of the organization and the processes that are undertaken by the same has helped in optimizing the outputs of the organization relating to the needs of the product up gradation process.

Google Outbound logistics- The integration of the core product and service offerings of the organization is based on the optimization of the search engines and advertisements. However, there are no outbound logistics of the organization as such. The organization also offer physical technological products, namely – Smartwatches, Nexus Phones, Chromecast, Chromebooks and the like. It has helped the organization in maintaining the diversity of the products that are framed by the businesses while operating in the competitive markets (Liu  & Cho,  2012).

Google Marketing and Sales- The organization’s marketing strategy is based on the online and offline integration of communication mediums. Particulate elements of the marketing mix like advertisements, events and experiences have helped the organization in making the most of being an online service provider. It has helped the business in gaining significant grounds in the marketing and sales through the creation of a marketing platform.

Google Service- The wide range of products that are proposed by the organization has helped in assisting the customers in resolving the technological issues that might emerge out of a professional field of work (Abraham,  2013). The emergence of the Google based technologies has helped in bringing forth significant changes in communication and marketing for the other organizations. On the other hand, the different customer service based phone numbers has helped the organization in integrating with the consumers and thereby identify the technological issues that are faced by the same while developing a new service or product. Continuous innovation is one of the criteria for growth of the organization, which has helped in undertaking changes in the processes of the business.

Porter’s Five Forces Model Analysis

Conclusion

Therefore, from the above analysis of the organization it might be stated that the proper functioning of the systems of the business is dependent on the different products and services offered by Google. On the other hand, the continuous innovation in the fields of technology has helped the business in maintaining a competitive advantage in the markets. However, the emergence of different social media platforms has affected the organization through a steady growth of competition in the online advertisement sector. There are different scopes of growth of the organization through innovation in the android systems and the development of OS through collaborations that might be undertaken by the business in later years.  

References

Abraham, S. (2013). Will business model innovation replace strategic analysis?. Strategy & Leadership, 41(2), 31-38.

Berg, E., & Kilambi, K. (2014). U.S. Patent No. 8,639,542. Washington, DC: U.S. Patent and Trademark Office.

Liu, Z., & Cho, S. (2012, September). Characterizing machines and workloads on a Google cluster. In Parallel Processing Workshops (ICPPW), 2012 41st International Conference on (pp. 397-403). IEEE

Abraham, S. (2013). Will business model innovation replace strategic analysis?. Strategy & Leadership, 41(2), 31-38.

Berg, E., & Kilambi, K. (2014). U.S. Patent No. 8,639,542. Washington, DC: U.S. Patent and Trademark Office.

Brooks, G., Heffner, A., & Henderson, D. (2014). A SWOT analysis of competitive knowledge from social media for a small start-up business. The Review of Business Information Systems (Online), 18(1), 23.

Choi, H., & Varian, H. (2012). Predicting the present with Google Trends. Economic Record, 88, 2-9.

Dua, R. (2014). U.S. Patent No. 8,700,729. Washington, DC: U.S. Patent and Trademark Office.

Dul?i?, Ž., Gnjidi?, V., & Alfirevi?, N. (2012). From five competitive forces to five collaborative forces: revised view on industry structure-firm interrelationship. Procedia-Social and Behavioral Sciences, 58, 1077-1084.

Fitzpatrick, B. D., Nguyen, Q. Q. A., & Cayan, Z. (2015). An Upgrade To Competitive Corporate Analysis: Creation Of A” Personal Finance Platform” To Strengthen Porter’s Five Competitive Forces Model In Utilizing. Journal of Business & Economics Research (Online), 13(1), 54.

Kohlhoff, K. J., Shukla, D., Lawrenz, M., Bowman, G. R., Konerding, D. E., Belov, D., … & Pande, V. S. (2014). Cloud-based simulations on Google Exacycle reveal ligand modulation of GPCR activation pathways. Nature chemistry, 6(1), 15.

Lazer, D., Kennedy, R., King, G., & Vespignani, A. (2014). The parable of Google Flu: traps in big data analysis. Science, 343(6176), 1203-1205.

Liu, Z., & Cho, S. (2012, September). Characterizing machines and workloads on a Google cluster. In Parallel Processing Workshops (ICPPW), 2012 41st International Conference on (pp. 397-403). IEEE.

Salar, M., & Salar, O. (2014). Determining pros and cons of franchising by using swot analysis. Procedia-Social and Behavioral Sciences, 122, 515-519.

Verma, A., Pedrosa, L., Korupolu, M., Oppenheimer, D., Tune, E., & Wilkes, J. (2015, April). Large-scale cluster management at Google with Borg. In Proceedings of the Tenth European Conference on Computer Systems (p. 18). ACM.

Choi, H., & Varian, H. (2012). Predicting the present with Google Trends. Economic Record, 88, 2-9.

Kohlhoff, K. J., Shukla, D., Lawrenz, M., Bowman, G. R., Konerding, D. E., Belov, D., … & Pande, V. S. (2014). Cloud-based simulations on Google Exacycle reveal ligand modulation of GPCR activation pathways. Nature chemistry, 6(1), 15.

Lazer, D., Kennedy, R., King, G., & Vespignani, A. (2014). The parable of Google Flu: traps in big data analysis. Science, 343(6176), 1203-1205.