Why Facebook and Google succeeded ?
Google is an American Company; it was founded in the year 1996. The founder of the Google is Larry Page and Sergey Brin; they were Ph.D. students. In the initial stage, the name of Google was Black Rub. Google is a search engine, and it is an internet and software based industry. The products of the Google can be classified in various ways, for example: Search tools (Google search, Encrypted search, Google Alerts, Google books, etc.), Advertising Services (AdMob, Ad Words Express, Google grants etc.), apart from that there are many more products like developmental tools, statistical tools, Desktop application, etc. The study will discuss, the decision of Google about the outsourcing of the products that will added value to the customers using the five performance objectives. The study will also discuss the risks that are involved in the decision making and the will recommendation to overcome with that risk. With the changing demands of the customers, Google also wants to introduce new products I order to satisfy the needs of the customers.
The decision of outsourcing of the products or services may help the Google to satisfy or fulfill the needs of the customers. In this competitive world, the needs or the requirement of customers change very frequently, so the decision of outsourcing can help the company. For outsourcing the products or service, it is very important for the Google to understand the demands of the customers (Pritchett, 2014). Understanding the requirements of the customers will help the operation manager to make the decision regarding outsourcing of the products and services. Once the operation manager understands the requirements, then it will be easy for him to make the proper decision about outsourcing. Outsourcing of the products and service can also help the company to retain the customers and for added value to the customers. It may be possible for the operation manager to take the decision about outsourcing because it will be directly related to the profit of the company (Jain and Khurana, 2015).
Outsourcing the products or services can help the company for the value added to the customers if the outsourcing products satisfy the customers. The customers want the valuable products that will satisfy the requirement of the customers. If the company knows about the requirements of the customers, then it will be easy for the company to deliver the product accordingly, and it will also added value to the customers. The value addition may be in the forms of giving psychological satisfaction or the monetary value to the customers. The value addition of the products or services will also discriminate the products from one another. For the operation manager of the Google, it is important to know about the market condition and the strategies of the competitors in the market. Outsourcing can be done from various sources, so it is important to know that what can be the best source for outsourcing of the products or services (Kutlu, 2012).
Outsourcing of the products may help the company to complete the products within a short period. The main motive of behind outsourcing is that the company to introduce new products very frequently so that the company can satisfy the changing demands of the customers (Bohannon, 2015).
If the company outsource the products and deliver the best quality of products to the customers, then it is possible to increase and gain the trust of the customers..
Another important reason for outsourcing is getting the cost benefits. The outsourcing of products can help Google to get the work done at the lower cost that will also save the time as well
Faster and better service can be done through outsourcing of the products or services (Taifi and Passiante, 2012).
Complexity and Dynamic Process
|
HIGH |
Out source |
Kept in House |
|
LOW |
Automated Outsource |
Not Outsources |
|
LOW |
HIGH |
In the above diagram, we have seen that High process with Low strategic importance:
Outsourcing of the products and at the same time retention of the products is also important for the Google (Jain and Thietart, 2013).
The cost of the products will increase and as well as the cost of training the employees will be the increase if the company retains the products.
Satisfying the customers need may not be possible for the changing in the demands of the customers, if the automated adoption is there for the Google.
Motivation should be there for retaining of the products in house. The employees of the organization should get motivated for producing the best quality of products.
The Google is focusing on the innovation of the new products, so the employees require training for adapting the new technologies (Harada, 2013).
Outsourcing of the products will be valuable if there is a high demand in the market.
The transportation while outsourcing of the products may create difficulties for the organization.
Competition is very high in the present market, so outsourcing in lower cost may be beneficial for the Google.
The Automated adaptation will not create any difficulties if the cost of the products is low in outsourcing
The products that are valuable from the company’s point of view should be kept in the house that will increase the number of customers and also the profit of the company. The Products like; Google search, Encrypted search, Desktop application products which include Google Chrome. These are the common products that are very important for day to day life or the commercial purpose (Portnoy, 2015).
The product from that the company is not earning enough profit can be outsourced. The products like; Motorola Mobility, AdMob, Ad Words Express, Google grants, etc. These products are not required for the common uses.
The five performance objective includes Quality, Cost, Speed, Dependability, and Flexibility.
Quality: Quality is the most important factor, as it reflects the image of the company. By maintaining the quality of the products, the Google can retain the customers. This will also help the company to make error-free products and service for the customers. The quality of the products also attracts the customers towards the products. The specification will also be there in the best quality of products. It is also important to measure the quality of the products so that it can satisfy the customer needs (CAMPBELL, 2012).
Cost: The cost of the products plays an important role in the business organization. For outsourcing the products, the company should also consider the cost factor. In the present market, all the business organization is competing with the cost factors. The Goggle has to find the way in which the company can produce lots of products with low cost. This will help the company to gain the competitive advantage in the market and also earn a good margin of profit from the customers. The reducing of the unnecessary cost will be helpful for the Google. For reducing the operation cost the proper planning and monitoring is important.
Speed: In this context, speed can refers to the time of delivery of the products to the ultimate customers. The time that is taken by the Google for producing new products of making the modification should less. The customers are very busy now a day’s; they want their products quickly. So the company should take less time to deliver the products to the customers. The more time to produce the products the more time it will take to deliver the products, so the first thing is complete the producing of products in less time. It will also create a trust between the company and the customers (Otto, 2015).
Dependability: Sometimes it has been seen that the customer’s order for the different products and get different products. It is very important for the Google to deliver the products that are ordered by the customers. This will help the company to build the strong relationship with the customers and to gain the trust of the customers. On-time delivery is also one of the aspects of dependability. The dependability can also save time and money for the organization and the customers as well. By doing the work on time, the employees of the organization can also be stable in the company.
Flexibility: Again Flexibility in the organization is very important, as it covers the flexible timing of work for the employees of the organization. The Google needs to be very flexible in their operations that will lead the company to grow in the market. Flexibility also gives many options to the company for introducing new types product in the market (Jiao, 2012). Suppose the Google is producing same types of products for a long time, now flexibility will help the company to produce new products and gain the advantage to capture the market.
These are the five performance objective that will help the operation manager to take the decision about the outsourcing or remain the products in house. If the operation manager, use five performance objectives in the operation management of the Google, then it will be easy for the company to grow in the market and gain the competitive advantages (Leigh, 2015).
The risks that are involved in the decision making process for outsourcing of the products and which may create difficulties for the organization:
Cost: The outsourcing of the products and services may increase the cost of the products for the Google, as it may include several taxes. If the cost of outsourcing increases, then it will increase the overall cost of the products and the profit margin will be low for the Google (Marle and Gidel, 2012).
Reliability: In outsourcing of products and service, the company may not be reliable as the company is unknown about the procedures for producing the products.
Vendor: The searching of good vendors is necessary for outsourcing the products and services. The unreliable vendors may create problems while outsourcing of products and services.
Information leaks: It is possible, that the confidential information of the company may be leaked in the time of outsourcing. This will create many difficulties for the organization.
Supply Chain: The improper supply chain may also create the problem for outsourcing of products and services (Shen and Li, 2015).
The implementation of risk management strategies can help the operation manager to reduce the risk in the outsourcing process (Boyd, 2014). Some of the points of risk management strategies are as follows:
Identifying the risk: To reduce the risk, at first it is important to identify the risk that can occur in the outsourcing process. Identifying the risk will help the manager to make the preparation for handling the risk.
Monitoring: The operation manager should properly monitor the outsourcing process to smoothly run the supply chain (Tate and Ellram, 2012).
Planning: The risk can be reduced in outsourcing by making the proper planning and execute the plan accordingly.
Communication: Communication between the workers and the operation managers can also solve some of the minor issues that may arise in the outsourcing process.
The decision of outsourcing of the products and services in the Google Company can be the vital decision for the operation manager. In this study, we discussed the steps that are taken by the operation managers for outsourcing the products and services in the Google. The factors that involve for the outsourcing of products and services are analyzed by using five performance objectives that can help the company to take the decision about outsourcing. We also discussed the risk that may occur in the decision making process, but the risk management strategies can help to reduce the risks.
References
Bohannon, J. (2015). Why Facebook and Google succeeded. Science.
Boyd, N. (2014). Market making and risk management in options markets. Review of Derivatives Research, 18(1), pp.1-27.
CAMPBELL, D. (2012). Discussion of The Use of Management Control Mechanisms to Mitigate Moral Hazard in the Decision to Outsource. Journal of Accounting Research, 50(2), pp.593-604.
Harada, T. (2013). Focusing device as innovation mechanism and cluster growth. Economics of Innovation and New Technology, 23(1), pp.49-62.
Jain, A. and Thietart, R. (2013). Capabilities as shift parameters for the outsourcing decision. Strat. Mgmt. J., 35(12), pp.1881-1890.
Jain, D. and Khurana, R. (2015). Impact of pricing and outsourcing models on Indian information technology service outsourcing. Benchmarking: An International Journal, 22(4), pp.610-623.
Jiao, J. (2012). Product platform flexibility planning by hybrid real options analysis. IIE Transactions, 44(6), pp.431-445.
Kutlu, A. (2012). Outsourcing Contracting Strategies from Supplier’s Side: A Real Options Approach Based on Transaction Costs. Procedia – Social and Behavioral Sciences, 58, pp.1601-1610.
Leigh, H. (2015). Intervention Selection: An Examination of Evidence and Changes in Belief During the Decision-Making Process. Performance Improvement Quarterly, 28(2), pp.27-52.
Marle, F. and Gidel, T. (2012). A multi-criteria decision-making process for project risk management method selection. IJMCDM, 2(2), p.189.
Otto, M. (2015). Less-Than-Severe Sepsis Not Recognized in Time. Caring for the Ages, 16(1), p.11.
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