Business Strategy of Google Inc - Essay Example

Google Inc. Contents.. Google Inc. SWOT Analysis: Google as a brand has an overbearing presence over the internet and prevails in different verticals of service and product on the internet. Though a very strong brand with an equally stronger business, yet a SWOT analysis can only provide us focused analysis of its actual position. On analyzing the situation, it becomes clear that in this era of innovation & technological prowess, it is not safe to seat on past or present laurels. A company like Google will always have to think ahead in terms of future trends and if it wants to maintain its strong position, it would have to give shape to the future of technology by introducing path breaking innovations at regular intervals. Though Google started as a search engine, it later on moved onto many other services and in most of the cases it has been able to garner a big market share for itself. Strength: Google is one the strongest brands in the world and has gained the No.1 spot in a survey of top- 100 brands of the world (Broache A., April 2008). It covers a wide array of services starting offcours4e from 'search' going up to 'email'. Google offers: Email (Gmail), Browser (Chrome), Advertising platform (AdSense, AdWords), Maps (Google maps), Video (Google Video), Blogging (Blogger), Google Scholar & Books and many more. In the glaobal 'Search' market Google has a market share of 79.90 % (Kim P., et al., October 2008). Google has been cleverly using this very high search traffic and leveraging the same customer base by offering new services to them. Weakness: In spite of offering so many services or products, Google is still synonymous with 'search'. This over dependence on search might become a weakness. It's a behemoth in the world of internet; therefore its flexibility of decision making might ebb with its growing size. It does not have a powerful worldwide presence in the 'Social networking' area. Though it has taken over the social networking site 'orkut', yet orkut doesn't have a worldwide following like Facebook, Myspace or Twitter. Experts are pointing out that social networking is the next big thing in the world of internet. Opportunity: Opportunities are galore in the ever changing world of internet. The area of social networking can be exploited on a worldwide basis by launching a new offering. In the present age, internet is moving from laptops and PCs to handheld devices or Mobiles. Here lies the next opportunity. Google has developed 'Android'. "Android is a software stack for mobile devices that includes an operating system, middleware and key applications" (Android - An Open Handset Alliance Project).Based on this operating system (android) Google has launched its first mobile phone known as 'G1' (Beaumont C., September 2008). Keeping an eye the future trends, Google is doing the right thing. Threat: In the world of internet, intellectual capability & innovations are the keystones for success. Some startup company might come up with some innovative offering & pose a threat to the company at least in one of its primary verticals. Google has become a powerful brand in the world of technology through its wide array of offerings; it has almost got monopolistic presence in some of its business areas. This monopolistic bent could be exploited in future by 'anti multinational' groups through challenges in the court of law also. Threat could also emanate from pact between Microsoft & Yahoo, two of Google's biggest competitors. Baidu.com is such a phenomenon in China; it is the Number.1 search engine of China where Google trails behind at the 2nd place.Baidu.com has got a share of 62% of the Chinese market (Roberts D., March 2009).Threat could come in the form of political opponents in geographies such as china or Iran, where the Government censors Google and is not very comfortable with its core competencies of free search (China, Iran censor web: rights group, March 2009). 5 Forces Analysis: If we consider the following 5 forces to be shaping the form of an industry and analyze each of them in context of Google & technology industry we get: Supplier Power: Google can exploit its positional strength of being the No.1 search engine. It has also got very strong positions in all the other verticals it functions in. But the threat from a new innovation from an innovative startup cannot be ruled out. In area like Mobile search, Nokia which is a big brand could pose threat for Goggle, through its own innovative R&D and Offerings. Buyer Power: Though there are a considerable number of players providing search engines & other services on the net, yet the number of prominent and reliable service providers boil down to a few like; Google, Yahoo, MSN, AOL, etc. Therefore the consumers do not have much choice in terms of offerings (of a certain standard).Reliable substitute is not available easily. More over since most of these services are free of cost, price sensitivity doesn't even exist. Barriers to entry: Barriers to entry in this field are considerably lower in comparison with manufacturing industry. Here the primary component for success is innovative service offering. The amount of initial investment needed for a technology startup is lower in comparison to manufacturing, etc. But it is not easy for a newcomer to be successful in front of competition from strong existing brands. Moreover Google controls a huge section of the online AD market and even Yahoo has not been able to take away market share from it in this sector. Threat of Substitutes: Yahoo, MSN, AOL, etc are formidable competitors & over the years they have always tried to dislodge Google form its top position but haven't been successful. There are probabilities of yahoo & MSN coming together but it hasn't matured yet. But chances of a brilliant innovation changing the game suddenly are still there. Degree of Rivalry: In the initial stage, exit barriers are not high. But after a certain scale & magnitude, one can't usually stop the operations as consumers expect service. Internet is growing every day in terms of number of people using it. Search is one of the primary areas of using the net and Google has been the no.1 in this area for a long time. It has extended its strong brand identity through diversification of services to different areas. It has become a behemoth on the net and is able to face up to challenges from lower ranked competitors like Yahoo, MSN, etc. But Google should stay alert about new technology opportunities and also about threat which may emanate from relatively smaller startups. PESTEL Analysis: Political: In September 2005 Google announced its plans of forming a 'political action committee' which would speak in favour of the company in the political world. Named NetPAC, Google claims that it has been launched to speak in favour of keeping the internet a free and open platform (Lewis J., October 2006). Economic: Google strides over a wide variety of products and services. Therefore the source of competition is also equally varied. It might be a small startup or big corporation like MSN or Yahoo. The technological environment is always changing and any organisation which is unable to visualize the future trends, is always left behind. Google has been a huge success primarily because of its 'search engine; capabilities which it later on leveraged to gain market share for its numerous other products and services. Almost every day we see small startup firms innovating and posing challenge to Google's offerings. For example Pixta.com (London) is an image search engine which searches images by analyzing then pixel wise and not by matching only their headings or subheadings, which Google does. ENDECA is a search engine but it is not a free one. It specializes in providing Government & Multinational Organisations with its technology, so that they can search their huge internal databases. Again, Technorati.com is a service which keeps track of more than 115 million Blogs and other media and puts them into categories such as Business, economy, politics, lifestyle, etc. Blogs have become a very popular mode of expression and almost 175,000 new ones are created every day. Technorati ranks these Blogs based on the number of times each blog gets linked by fellow bloggers i.e. how popular each they are (Google: Seven potential threats to its dominance, June 2008). Besides these new ventures, market giants like Yahoo, MSN are always in the lookout for new offerings to take on Google. Talks of a merger between yahoo and MSN had been going on, to take on the might of Google (Monica La. R. P., May 2004). Social: People today are dependent heavily on the internet for their work, entertainment, etc. Google being one of the most powerful brands on the net, customers use Google services from searching to sending email or even reading books or finding direction. Google is omnipresent in their lives. And social patterns have changed due to this over reliance on the net and especially on Google. For them it is difficult to imagine a life without the internet or without Google. But some users have apprehensions about using the internet. Human beings cherish their privacy. In the 21st century much of our work and pleasure time is spent o the net. Information is continually being sent over the web and users would like to keep them private and to be read by the recipient only. But in reality that is not the case, as many ISPs (Internet service providers) track users through technology about their internet usage pattern. Also many websites drop tracking cookies in the user's computer to track his surfing pattern for future reference in context of advertising and promotion. Many civil organizations have taken on this issue but the menace of customer profiling has not stopped. Google also recently has come up with a behavioural tracking network for profiling customer's net behavior. Customers are unhappy with this and recently the European Commission has given ultimatum to these companies on this matter. If these internet firms do not take care of the customer's concerns then the commission has threatened to take regulatory action itself. (Williams C., March 2009). Technological: Google deals with technology and innovation on a daily basis and has launched many path breaking services and products over a period of time. Some of the most famous products are Google search- Search engine. In 1993 Google started with its search engine and gradually came up with country specific search engines, www.google.co.uk (UK), www.google.ca (Canada), www.google.co.sg (Singapore), etc for better and locally focused search results. Google has also launched specific search options for books, blogs, scholars (for research work), etc. Google desktop- It is a free application which can be downloaded onto PCs or laptops for searching them. Many other gadget or widgets (which play music, world clocks, calendars, etc) can be attached to it, which are also available for free from Google. Google Earth: Free software which is a virtual earth and provides satellite images of addresses typed in. Gmail: Google's Email service which has an inbuilt chat option (with Video and Voice). Chrome: Google's browser for net surfing; famous for its clutter less design. Google News: For news from different parts of the world from reliable sources like agencies, newspaper sites, magazines, etc segregated under topical heads. (Google products). Legal: Google has been functioning in various countries and it had to go through various legal issues under different circumstances. From copyright infringement lawsuits (Google books, Google Scholar) to security & privacy issues, it had to go through all. Environmental: On the environmental front Google has initiated many programs on its own with the view of a better and cleaner earth of tomorrow. They use biodiesel in shuttles of employees in the bay area and also are proponents of using bikes within their campus. Their building at Mountain View is built out of environment friendly materials. Their chefs mostly use local and organic ingredients for cooking. They subsidize employee home solar electrical panel systems. Google has taken a pledge of being carbon neutral. They have also come up with own designed data centers which consume less electricity in comparison to normal ones. They have plans for efficient server management and data centers along with proper water management. Under the 'RE Read More