Strategic Groups - Essay Example

?Strategic Groups Introduction Strategic groups may be defined as a group of companies or corporations that employs similarities in their various processes of production (Hunt, 1972). The company’s performance and behavior in the market are similar hence the term strategic groups. This paper aims at discussing the rivalry that strategic groups face and how they aim at neutralizing the competition. The paper discusses the rivalry between Google Incorporation and other rivalry groups that offer similar services and products. Google and Microsoft have been on market command wars while Samsung and Apple have also been battling it on the mobile phone productions. Google in particular has several strategic advantages that have enabled it to emerge the strongest internet provider in the world. Google has been able to employ strategies such as product and service diversity that has provides the company with greater sales. Google also possess one of the largest geographic coverage in the world. In addition to this, Google has several numbers of market segments that it is serving. Apart from internet production, the company also provides image and graphic production software. The company also provides mobile phone applications in addition to mobile phone production. The company also enjoys good distribution channels that provide it with the best strategic advantages. The extent at which Google brands its product cannot be compared to other rival companies. This is because the company is bale to brand and market its products cheaply and efficiently through the internet that the company owns. The degree of vertical market integration in Google Company is also very efficient. Product and pricing policies for the company has also been superb enabling the company to enjoy wider markets and retain most of their loyal companies (Porter, 1980). On the other hand, Microsoft Incorporation enjoys the best PC software producer in the World. It is estimated that almost 90% of the PC’s in the world uses Microsoft Software. Analysts argue that without Microsoft, Google would find no base for their supplies since the internet utilizes Microsoft applications in computers. Yahoo Incorporation is also another strategic group of company that offers similar services like Google. The rivalry has led to the attempt of Google trying to purchase Yahoo. Background Information and Strategic Benefits Larry Page and Sergey Brin studied at Stanford University and own 16% of the total company’s shares formed Google Inc. they are the founders of Google Inc. The company came into existence in 1998 as a private company but later went public in 2004 when the company invited other shareholders into the company. The two friends invited their fellow student Craig Silverstein who also studied computer science as their first employee. The company runs on a vision of organizing all the information in the world and making it readily available for all the users in the world. The company also runs on a slogan “don’t be evil” which has helped it in its growth (Why is Google so great 2007). The Company’s history dates back in 1998 when Larry and Sergey decided to upgrade Backrub a search engine that was operating on Stanford severs for almost more than one year. The two friends decided to change the name from Backrub to Google which is a mathematical term that is used in referring 1 then the digit is followed by 100 zero digits. Their decision to land on the term was later used in forming the vision. The number of zeros signifies infinity, which means looking for all the world information, which is almost impossible. The same year the company received a donation of $100,000 from Andy Bechtolsheim who is now the co-founder of the company. In December, the same year the company was recognized as one of the best 100 websites in the world and it had an efficient way of providing feedback to its users. In 1999, the company improved its employees to eight and therefore had to shift into a larger working place. The following year in May the company made a huge progress by releasing 10 languages used with the company’s search engines. It was also during this time that the company won its first Webby award. Through ambitions, the company’s directors attempted to purchase Yahoo in the year 2000. However, after the collapse of the merger, the company extended its geographical location by offering search engines to the world most populous countries like Japan, china and Korea building their language offer to fifteen. This is one of the strategic benefits that Google Incorporation enjoys, the ability to diversify and command a greater market in a wide geographical area. In July in 2000, the company was able to offer 250 million images to its web users. The ability of Google to have a wider market command gives the company the strategic benefit. In February 2002, the company was able to provide a search appliance that enabled business people to search for their documents on their computers. The company later announced partnership with AOL, which enabled it to expand its database to 32 million customer services accessing their website. In April 2004, the company announced their plans to extend their search capacity into space specifically in the moon. By 2005, the company had reached 1.1 billion images in text on their website. During this year, the company was able to introduce G-talk software that enabled people to communicate and chat with their friends both on phone and on the computers. In 2007, the company was able to announce a partnership with a Chinese mobile company, which is the largest in the country and has been able to provide internet and mobile services in the populous country. Google’s ability to diversify and command a wider market in addition to having wider channels of distribution of its products to its customers also provides it with a greater strategic advantage that has propelled it to the top of the market for so many years hence enabling it to beat other rival competitors like Yahoo. In 2007, the company was able to collaborate with Apple Company and made Google chrome the default search engine on Apple smart phones (Samson 2010). In October 2007, the company was able to collaborate with IBM for an initiative to sponsor students to learn how to use and search information on the computers. In July 2010, the company signed a partnership with ITA a company that organizes airline prices, data, and travel schedule in order to provide these services to its users. From the above examples, we can conclude on Google’s ability to engage in vertical integration, which has also helped the company in having strategic advantages over other companies such as Yahoo. Google’s product and pricing policy is also superb that has enabled it to receive several rewards. This year, the company received ISO Certification for helping improve the environment and making it paper free. The product and service quality has also helped the company to retain most of its loyal customers hence command greater market share. The year 2011, the company developed android, which has been actively used software in applications in phone with the main aim of competing effectively with Apple Company. As already mentioned earlier, the company’s mission statement is to organize all the info in the universe and make it readily available to the user in the world. However, it is amazing to note that the company operates on a motto “do no evil” .Other companies have struggled to create ethical mottos but Google’s is simply do no evil. The company’s introduction of Picasa software that enables people to download and post pictures on the website has enabled the company to attract many users. This is just one way through which Google has been able to diversify its productions in market. It is also an example of the number of market segment that Google enjoys. The customers who are mainly youths who are engaged in social site interaction and socialization are the target group for this company. Any other person cannot confuse the use of Google’s colors and trademark as default pictures on their home pages. The company has been able to use its identity in many ways as it tries to capture the market. The company uses most of its applications on the phone to capture the market. The introduction of G-talk was enough to glue people on their phones. The introduction of such services prompted many mobile companies to venture into smart phone production, which has since faced rapid competition. The incorporation of Google Chrome on apples’ smartphone was also a unique structure that aimed at ensuring people continued to use Google. Google Company has its strength lying mostly on their search engines. The company’s search engine is one of the widely used in the world. It is the strongest and the most competitive (Laundon, 2007) . The company relies on cloud computing in order to compete with other companies such as Apple and Microsoft. It is important to notice that all these companies are strongly competing to control cloud computing which allows users to access internet applications on their phones. Apple has been more successful and controls 30% of mobile phone applications in the world. However, many analysts predict that cloud computing is likely to overtake desktop computing with the recent introduction of smartphones. Google enjoys a worlds 85 % share in its search engines (Pepitone, 2012). The introduction of Android phones enabled the company to overtake Apple in the last quarter as Google Inc. took whopping 68% sales on their android phones. The company works on good cultural value cultivated within the company vision and mission. On the other hand, Apple managed only 17% market share on the sales of their IPhones. Despite the recent success in mobile phone applications and success, many still believe that the field of mobile phone belongs to the Apple and other mobile phone companies such as Nokia, Samsung, and Motorola. As mentioned earlier Google is far much stronger when it comes to search engine and website establishment. The company should continue concentrating most of its efforts in these areas as it is likely to experience a lot of success. Good business culture and good customer care service has pulled the company against challenges in the past (Lombriser R., 2005). The company has good culture in terms of customer care service. The company is very efficient and very fast in giving feedback to its users. The company has also been greatly involved with many innovative associates with the community. The company is well known for April’s fool day where most of the jokes are shared. This creates good working relationship with the users and customers in general. The company is also famous for collaborating with other big companies in order to improve the technological development in the world. Such collaborations include the ones with IBM, ITA, Apple, and many others. The company uses the site for communicating with its users and customers worldwide. The company successfully organized an orchestra concert online, which was the first in the world. The company has also constantly participated in community services including organizing a match that contributed $100 million to jump start the economy when the US and the whole world was undergoing major economic recession recently. Starting from the motto the company has unique working culture. In contrast to other serious companies in the world, the company allows its workers to work in casual dress code. The workers dress in capes and t -shirts with the company’s logo. It is believed that he nature of the work requires the staff to be very social free open and very happy always hence its continued success in offering its services to the world (Towers 2005). The company also enjoys the strongest advertising package in the world because of its ability to reach the whole world. The success behind the success of Android phones gross sales are mainly due to its strength in advertisement. Their products brands well with the company’s logo, which is already famous and cannot be confused even with the children. The attitude of the staff is superb due to good working conditions that are very flexible. Frequent meetings are always held to motivate the workers. An innovation in the company is always embraced with 5 minutes of clapping and the next 50 minutes in accessing its continuous viability strengths and challenges (G. & C, 2005). Google will continue to dominate the world of search engines due to its strong network in the world. The company enjoys this status since it has been able to translate the language to what is required by the customers and therefore fulfilling the mission statement. Importance of Strategic group Analysis in Google Incorporation Strategic group analysis has helped Google Incorporation to identify some o its most stiff competitors in the market industry. The process of strategic group analysis has also helped Google to plan on how it can move from one strategic group to another. This has helped the company to form mergers with other companies. Google has continued to identify its opportunities by employing the use of strategic group mapping. Through this strategy, the company enjoys a wider share of market in the world. Companies conducting strategic group analysis can easily solve and can identify problems and challenges that may arise through strategic grouping. Other companies however have been abl to employ six path framework in order to try and avoid competition in the market. The companies have been able to diversify and look for alternative industries instead of focusing and continue to struggle with the competing industries. Other companies have also tried and joined other strategic groups in order to enhance their success in the industry and the market as well. Some of the companies have also changed their focus on the chain of buyers and suppliers instead of concentrating on the same who offer competition due to their similarity and nature of their businesses in the industry. In addition to this, some companies and organizations have sought to seek complimentary services and goods that can help reduce competition leading to interdependency amongst the companies. Other companies have embraced a notion of appealing to their customers emotionally and have done away with the industry’s notion and appeal. This form of diversification has helped to reduce competition. Conclusion Strategic groups have attempted to strategically to preserve the imperfect conditions and stability in the market by increasing the cost of investment (Schmalzer T., 2008). The company has continued to expand its geographical market distribution all over the world. The company has also ensured that their service reach their customers in the most preferred language hence not causing language barrier. The company has strategically tried to reduce competition in its line of business by integrating with other business organization offering similar services. This has led to Google’s better performance and has consequently led to reduction of uncertainty in the today’s competitive environment. All this is aimed at building isolating mechanisms that will prevent or deter other entrants in the market thereby causing competition (Hodgkinson, 1997). Bibliography G., M.-S., & C, L. (2005). Strategisches Management 3rd edition. Stuttgart: Schaffer-Poeschel. Hodgkinson, G. (1997). The Cognitive Analysis of Competitive Structures. A Review and Critique", in: Human Relations, 50 (6), 625-654. Hunt, M. (1972). Competition in the Major Home Appliance Industry. New York: Harvard University. Laundon, K. a. (2007). Management-Information Systems: Managing the Digital Firm” 11th edition. Upper Saddle River, New Jersey 07458: Pearson Education,. Lombriser R., A. P. (2005). Strategisches Management 5th edition. Zurich: Versus. Pepitone, J. (2012, August 9). Android races past Apple in smartphone market share. Retrieved 2012, from CNNmoney: www.momey.cnn.com Porter, M. (1980). Competitive Strategy. New York: Free Press. Schmalzer T., S. C. (2008). Business Excellence for Start-ups: Leitfaden zum Aufbau von Fuhrungsstrukturen in Wachstumsunternehmen. Graz: FH JOANNEUM. Hunt, M. (1972). Competition in the Major Home Appliance Industry. New York: Harvard University. Laundon, K. a. (2007). Management-Information Systems: Managing the Digital Firm” 11th edition. Upper Saddle River, New Jersey 07458: Pearson Education,. Pepitone, J. (2012, August 9). Android races past Apple in smartphone market share. Retrieved 2012, from CNNmoney: www.momey.cnn.com Porter, M. (1980). Competitive Strategy. New York: Free Press. Why is Google so great 2007, Great Place to Work Institute Incorporation, viewed 4 April 2013. Read More